Sri Jayanta Saha, Kolkata V. DCIT, Circle - 25, Kolkata , Kolkata

ITA 106/KOL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0456 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 18-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Principle of natural justice; Bonafide belief; Question of law; Condonation of delay
• Section: 69

Judgement Text

1 ITA NO. 106/KOL/2018 JAYANTA SAHA., AY 2010-11 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) BEFORE . . , /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] I.T.A. NO. 106/KOL/2018 ASSESSMENT YEAR: 2010-11 SHRI JAYANTA SAHA (PAN: AKKPS1951N) VS. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-25, KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 09.07.2018 DATE OF PRONOUNCEMENT 19.09.2018 FOR THE APPELLANT SHRI SUBASH AGARWAL, ADVOCATE FOR THE ASSESSEE/CROSS OBJECTOR SHRI SALLONG YADEN, ADDL. CIT, SR. DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE LD. CIT(A)-XIV, KOLKATA DATED 19.02.2014 FOR AY 2010-11 WHEREIN THE LD. CIT(A) CONFIRMED THE PENALTY IMPOSED BY THE AO U/S. 271(1)(C) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. AT THE OUTSET ITSELF, THE LD. DR BROUGHT TO OUR NOTICE THAT THERE IS A DELAY OF 1178 DAYS IN FILING ASSESSEES APPEAL AND, THEREFORE, TH E APPEAL SHOULD BE DISMISSED FOR THE DELAY IN FILING THE APPEAL BEFORE THIS TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE CONDONATION PETITION WHEREIN THE A SSESSEE HAS STATED THAT THE PENALTY ORDER U/S. 271(1)(C) OF THE ACT WHEREIN THE AO IMPOSED PE NALTY OF RS.1,04,125/- WAS CHALLENGED BY THE ASSESSEE BEFORE THE LD. CIT(A), WHO WAS PLEA SED TO DISMISS THE SAME ON 19.02.2014. HOWEVER, THE SAID ORDER WAS INFACT RECEIVED BY THE ASSESSEE ONLY ON 29.03.2014. THE LD. AR SUBMITTED THAT LAST DATE FOR FILING THE APPEAL B EFORE THE TRIBUNAL WAS ON 28.05.2014, HOWEVER, SINCE THE ASSESSEE FILED THIS APPEAL ONLY ON 18.01.2018 THERE IS A DELAY OF AROUND 2 ITA NO. 106/KOL/2018 JAYANTA SAHA., AY 2010-11 1330 DAYS IN FILING THE APPEAL. THE LD. AR BROUGHT TO OUR NOTICE THE BACK-GROUND FOR CAUSING THE DELAY AND SUBMITTED THAT AFTER RECEIPT OF THE ORDER OF LD. CIT(A) DATED 19.02.2014 ON 29.08.2014 THE ASSESSEE HANDED OVER T HE SAME ORDER TO SHRI V. K. TIWARI, FCA TO TAKE STEPS AS PER LAW. HOWEVER, THE SAID LD . AR FILED A FRESH APPEAL AGAIN BEFORE THE LD. CIT(A) SINCE GROUND NO. 2 OF THE ORIGINAL A PPEAL WAS NOT ADJUDICATED BY THE LD. CIT(A) IN THE ORDER PASSED ON 19.02.2014 AND THE S AID LD. AR SHRI TIWARI WAS OF THE BONAFIDE BELIEF THAT SUCH AN ERROR CAN BE RECTIFIED ONLY BY FILING FRESH APPEAL. HOWEVER, THE LD. CIT(A) TREATED THE FRESH APPEAL FILED BY THE AS SESSEE AS A RECTIFICATION/REVISION APPLICATION AND PASSED RECTIFICATION ORDER DATED 13 .05.2016 DISMISSING THE APPEAL/REVISION/RECTIFICATION APPLICATION. AFTER R ECEIPT OF THIS ORDER DATED 13.05.2016 THE ASSESSEE WAS ADVISED/DISSUADED BY THE VERY SAME AR SHRI TIWARI THAT THERE IS NO POINT IN FURTHER PURSUING THE APPEAL AND SO ASSESSEE DROPPED THE IDEAL OF FILING AN APPEAL BEFORE THE TRIBUNAL. THEREAFTER IT WAS BROUGHT TO OUR NOTICE THAT THE ASSESSEE WHO WAS EMPLOYED WITH M/S. UNIQUE WIRELESS (TAMILNADU) PVT. LTD. HAD LEFT THE JOB ON 30.04.2013 AND JOINED THE NEW ASSIGNMENT WITH M/S. KHADIM (INDIA) LTD. W.E.F. 15.04.2016 (COPY OF THE APPOINTMENT LETTER IS SEEN ANNEXED WHICH IS MARKED AS ANNEXURE- A). THEREAFTER THE ASSESSEE CONSULTED WITH SHRI SUBASH AGARWAL, ADVOCATE ON 12.01.2018 WH EN HE WENT TO HIM TO DISCUSS THE TAX ISSUES OF SHRI DIDDHARTHA ROY BURMAN, M.D OF M/S. KHADIM (INDIA) LTD. AND SOUGHT AN OPINION ON THE LEGALITY OF PENALTY IMPOSED U/S. 271 (1)(C) OF THE ACT UPON THE ASSESSEE. THEN SHRI SUBASH AGARWAL, ADVOCATE SUGGESTED THE AS SESSEE TO FILE AN APPEAL IMMEDIATELY BEFORE THE TRIBUNAL AND THE ASSESSEE IMMEDIATELY PR EFERRED THE PRESENT APPEAL AND AFTER THE APPEAL WAS PREPARED AND SIGNED ON 16.01.2018 BY THE ASSESSEE AND THEREAFTER, THE APPEAL WAS FILED ON 18.01.2018. IN THE AFORESAID FACTS AN D CIRCUMSTANCES OF THE CASE, THE LD. COUNSEL PLEADED BEFORE THIS TRIBUNAL THAT DUE TO TH E WRONG ADVICE GIVEN BY THE ERSTWHILE AR SHRI TIWARI THE ASSESSEE SHOULD NOT BE PENALIZED EVEN THOUGH THERE IS A DELAY OF 1178 DAYS. LD. DR OPPOSED FOR CONDONING THE DELAY AND V EHEMENTLY OPPOSED ADMITTING THE APPEAL. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE REASONS GIVEN FOR THE DELAY WHICH IS N OT REPEATED FOR THE SAKE OF BREVITY. WE 3 ITA NO. 106/KOL/2018 JAYANTA SAHA., AY 2010-11 NOTE THAT THE HONBLE SUPREME COURT IN THE CASE OF COLLECTOR OF LAND ACQUISITION VS MST KATIJI & OTHERS 167 ITR 471 (SC) HAS EXPLAINED THE PRINCIPLE THAT NEED TO BE KEPT IN MIND WHILE CONSIDERING THE APPLICATION FOR CONDONATION O F DELAY. THE HONBLE APEX COURT HAS EMPHASIZED THAT SUBSTANTIAL JUSTICE SHOULD PREVAIL OVER TECHNICAL CONSIDERATION. THE HONBLE APEX COURT HAS ALSO OBSERVED THAT A LITIGAN T DOES NOT STAND TO BENEFIT BY LODGING THE APPEAL LATE. THE HONBLE APEX COURT HAS ALSO O BSERVED THAT EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROACH SH OULD BE TAKEN. THE DOCTRINE MUST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC M ANNER. IN THE CASE OF VEDABAI ALIAS VAIJAYANTABAI BABURAO PATIL VS. SHANTARAM BABURAO P ATIL & ORS. 253 ITR 798(SC), THE HONBLE SUPREME COURT IN THE MATTER OF CONDONATION OF DELAY OBSERVED THAT SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE. SIMILAR WERE THE R ULING OF THE HONBLE SUPREME COURT IN THE CASE OF N. BALAKRISHNAN VS. M. KRISHNAMURTHY 1998 ( 7) SCC 123 (SC) AND SHANKARRAO VS. CHANDRASENKUNWAR (1987) SUPPL. SCC 338 (SC). IN TH E LIGHT OF THE AFORESAID JUDICIAL PRECEDENT AND TAKING INTO CONSIDERATION THE FACT TH AT BECAUSE OF THE WRONG ADVICE GIVEN BY THE LD. AR SHRI TIWARI CAUSED THE ASSESSEE IN NOT P REFERRING AN APPEAL BEFORE THIS TRIBUNAL. THEREFORE, THE ASSESSEE CANNOT BE FAULTED FOR NOT P REFERRING AN APPEAL ON TIME. TAKING INTO CONSIDERATION THE AFORESAID FACTS GIVEN FOR CAUSING THE DELAY, WE ARE OF THE OPINION THAT THE DELAY SHOULD BE CONDONED AND WE DO SO AND ADMIT THE APPEAL FOR ADJUDICATION. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSESSEE DREW O UR ATTENTION TO THE NOTICE ISSUED BY AO U/S. 274 R.W.S. 271 OF THE ACT DATED 29.11.2012 FOR THE AY 2010-11 WHICH IS PLACED AT PAGE 1 OF THE PAPER BOOK WHEREIN WE NOTICE THAT THE NOTI CE HAS BEEN ISSUED BEFORE IMPOSING PENALTY DOES NOT CONTAIN THE SPECIFIC CHARGE AGAINS T THE ASSESSEE NAMELY AS TO WHETHER THE ASSESSEE WAS AT FAULT FOR HAVING CONCEALED PARTICUL ARS OF INCOME OR HAVING FURNISHED INACCURATE PARTICULARS OF INCOME. A COPY OF THE SHO W CAUSE NOTICE U/S 274 OF THE ACT WAS FILED BEFORE US AND PERUSAL OF THE SAME REVEALS THA T AO HAS NOT STRUCK OUT THE IRRELEVANT PORTION IN THE SHOW CAUSE NOTICE AND, THEREFORE, TH E SHOW CAUSE NOTICE DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER THE CHARG E IS OF CONCEALMENT OF PARTICULARS OF 4 ITA NO. 106/KOL/2018 JAYANTA SAHA., AY 2010-11 INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THE SAME IS REPRODUCED FOR THE PURPOSE OF READY REFERENCE: WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2010-11 IT APPEARS THAT YOU HAVE CONCEALED THE PARTICULARS OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 5. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTE NTION TO THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS E MERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN THE HONBLE KARNATAKA HIGH COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTON AN D GINNING FACTORY (2013) 359 ITR 565 TOOK A VIEW THAT IMPOSING OF PENALTY U/S 271(1)(C) OF THE ACT IS BAD IN LAW AND INVALID FOR THE REASON THAT THE SHOW CAUSE NOTICE U/S 274 OF TH E ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD. COUNSEL F URTHER BROUGHT TO OUR NOTICE THAT AS AGAINST THE DECISION OF THE HONBLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEAL IN SLP IN CC NO.11485 OF 2016 AND THE HONBLE SUPRE ME COURT BY ITS ORDER DATED 05.08.2016 DISMISSED THE SLP PREFERRED BY THE DEPAR TMENT. THE LD. COUNSEL ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 DATED 05.0 1.2017 WHEREIN THE HONBLE BOMBAY HIGH COURT FOLLOWING THE DECISION OF THE HON BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTOR Y (SUPRA) CAME TO THE CONCLUSION THAT IMPOSITION OF PENALTY ON DEFECTIVE SHOW CAUSE NOTIC E WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT BE SUSTAINED. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS. ACIT IN I TA NO.1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS BEEN F OLLOWED BY THE TRIBUNAL. OUR ATTENTION WAS ALSO DRAWN TO A RECENT JUDGMENT OF HONBLE CALC UTTA HIGH COURT IN THE CASE OF PR. CIT- 19 VS. DR. MURARI MOHAN KOLEY, ITAT NO. 306 OF 2017 , GA NO.2968 OF 2017 DATED 18.07.2018 WHEREIN ALSO THE HONBLE HIGH COURT HAS UPHELD THE ABOVE PROPOSITION OF LAW AND DISMISSED THE APPEAL OF THE REVENUE. 5 ITA NO. 106/KOL/2018 JAYANTA SAHA., AY 2010-11 6. LD. DR VEHEMENTLY OPPOSED THE SUBMISSION OF THE LD. AR AND HAS CITED VARIOUS CASE LAWS TO OPPOSE THE CASE LAWS SUGGESTED BY THE LD. AR. WE NOTE THAT ALL THE CASE LAWS CITED BEFORE US BY THE LD. DR HAS BEEN DEALT WITH E LABORATELY BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF JEETMAL CHORARIA VS. A CIT, ITA NO. 956/KOL/2016 FOR AY 2010-11 DATED 01.12.2017, WHEREIN THE TRIBUNAL HAS NOTED AS UNDER: 7. THE LEARNED DR SUBMITTED THAT THE HONBLE CA LCUTTA HIGH COURT IN THE CASE OF DR.SYAMAL BARAN MONDAL VS. CIT (2011) 244 CTR 631 ( CAL) HAS TAKEN A VIEW THAT SEC.271 DOES NOT MANDATE THAT THE RECORDING OF SATISFACTION ABOUT CONCEALMENT OF INCOME MUST BE IN SPECIFIC TERMS AND WORDS AND THAT SATISFACTION OF A O MUST REFLECT FROM THE ORDER EITHER WITH EXPRESSED WORDS RECORDED BY THE AO OR BY HIS OVERT ACT AND ACTION. IN OUR VIEW THIS DECISION IS ON THE QUESTION OF RECORDING SATISFACTION AND NO T IN THE CONTEXT OF SPECIFIC CHARGE IN THE MANDATORY SHOW CAUSE NOTICE U/S.274 OF THE ACT. TH EREFORE REFERENCE TO THIS DECISION, IN OUR VIEW IS NOT OF ANY HELP TO THE PLEA OF THE REVENUE BEFORE US. 8. THE LEARNED DR RELIED ON THREE DECISIONS OF MU MBAI ITAT VIZ., (I) DHANRAJ MILLS PVT. LTD. VS. ACIT ITA NO.3830 & 3833/MUM/2009 DATED 21.3.201 7; (II) EARTHMOVING EQUIPMENT SERVICE CORPORATION VS. DCIT 22(2), MUMBAI, (2017) 84 TAXMANN.COM 51 (III) MAHESH M.GANDHI VS. ACIT VS. ACIT ITA NO.2976/MUM/2016 DAT ED 27.2.2017. RELIANCE WAS PLACED ON TWO DECISIONS OF THE HONBLE BOMBAY HIGH COURT V IZ., (I) CIT VS. KAUSHALYA 216 ITR 660(BOM) AND (II) M/S.MAHARAJ GARAGE & CO. VS. CIT DATED 22.8.2017. THIS DECISION WAS REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LEARNE D DR. THIS IS AN UNREPORTED DECISION AND A COPY OF THE SAME WAS NOT FURNISHED. HOWEVER A GIST OF THE RATIO LAID DOWN IN THE DECISION HAS BEEN GIVEN IN THE WRITTEN NOTE FILED BEFORE US. 9. IN THE CASE OF CIT VS. KAUSHALYA (SUPRA), THE H ONBLE BOMBAY HIGH COURT HELD THAT SECTION 274 OR ANY OTHER PROVISION IN THE ACT OR THE RULES, DO ES NOT EITHER MANDATE THE GIVING OF NOTICE OR ITS ISSUANCE IN A PARTICULAR FO RM. PENALTY PROCEEDINGS ARE QUASI-CRIMINAL IN NATURE. SECTION 274 CONTAINS THE PRINCIPLE OF NATURAL JUSTICE OF THE A SSESSEE BEING HEARD BEFORE LEVYING PENALTY. RULES OF NATURAL JUSTICE CANNOT BE IMPRISONED IN ANY STRAIGHT-JACKET FORMULA. FOR SUSTAINING A COMPLAINT OF FAILURE OF THE PRINCI PLES OF NATURAL JUSTICE ON THE GROUND OF ABSENCE OF OPPORTUNITY, IT HAS TO BE ESTABLISHED TH AT PREJUDICE IS CAUSED TO THE CONCERNED PERSON BY THE PROCEDURE FOLLOWED. THE ISSUANCE OF N OTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY P ENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE L ANGUAGE USED OR MERE NON-STRIKING OF THE INACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE ITAT MUMBAI BENCH IN THE CASE OF DHANRAJ MILLS PVT.LTD. (SUPRA) FOLLOWED THE DECI SION RENDERED BY THE JURISDICTIONAL HONBLE BOMBAY HIGH COURT IN THE CASE OF KAUSHALYA (SUPRA) AND CHOSE NOT TO FOLLOW DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNA THA COTTON & GINNING FACTORY (SUPRA). RELIANCE WAS ALSO PLACED BY THE ITAT MUMBAI IN THIS DECISION ON THE DECISION OF HONBLE PATNA HIGH COURT IN THE CASE OF CIT V. MITHILA MOTOR 'S (P.) LTD. [1984] 149 ITR 751 (PATNA) WHEREIN IT WAS HELD THAT UNDER SECTION 274 OF THE INCOME-TAX ACT, 1961, ALL THAT IS REQUIRED IS THAT THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY TO SHOW CAUSE. NO STATUTORY NOTICE HAS BEEN PRESCRIBED IN THIS BEHALF. HENCE, IT IS SUFFICIENT IF THE ASSESSEE WAS AWARE OF THE CHARGES HE HAD TO MEET AND WAS GIVEN AN OPPORTUNITY OF BEING H EARD. A MISTAKE IN THE NOTICE WOULD NOT INVALIDATE PENALTY PROCEEDINGS. 10. IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE CO RPORATION (SUPRA), THE ITAT MUMBAI DID NOT FOLLOW THE DECISION RENDERED IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY 6 ITA NO. 106/KOL/2018 JAYANTA SAHA., AY 2010-11 (SUPRA) FOR THE REASON THAT PENALTY IN THAT CASE WA S DELETED FOR SO MANY REASONS AND NOT SOLELY ON THE BASIS OF DEFECT IN SHOW CAUSE NOTICE U/S.274 OF THE ACT. THIS IS NOT FACTUALLY CORRECT. ONE OF THE PARTIES BEFORE THE GROUP OF ASSESSEES BE FORE THE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) WAS AN ASSES SEE BY NAME M/S.VEERABHADRAPPA SANGAPPA & CO., IN ITA NO.5020 OF 2009 WHICH WAS A N APPEAL BY THE REVENUE. THE TRIBUNAL HELD THAT ON PERUSAL OF THE NOTICE ISSUED UNDER SECTION 271(1)(C) OF THE ACT, IT IS CLEAR THAT IT IS A STANDARD PROFORMA USED BY THE ASSESSIN G AUTHORITY. BEFORE ISSUING THE NOTICE THE INAPPROPRIATE WORDS AND PARAGRAPHS WERE NEITHER STR UCK OFF NOR DELETED. THE ASSESSING AUTHORITY WAS NOT SURE AS TO WHETHER SHE HAD PROCEE DED ON THE BASIS THAT THE ASSESSEE HAD EITHER CONCEALED ITS INCOME OR HAS FURNISHED INACCU RATE DETAILS. THE NOTICE IS NOT IN COMPLIANCE WITH THE REQUIREMENT OF THE PARTICULAR S ECTION AND THEREFORE IT IS A VAGUE NOTICE, WHICH IS ATTRIBUTABLE TO A PATENT NON APPLICATION O F MIND ON THE PART OF THE ASSESSING AUTHORITY. FURTHER, IT HELD THAT THE ASSESSING OFFI CER HAD MADE ADDITIONS UNDER SECTION 69 OF THE ACT BEING UNDISCLOSED INVESTMENT. IN THE APPEAL , THE SAID FINDING WAS SET-ASIDE. BUT ADDITION WAS SUSTAINED ON A NEW GROUND, THAT IS UND ER VALUATION OF CLOSING STOCK. SINCE THE ASSESSING AUTHORITY HAD INITIATED PENALTY PROCEEDIN GS BASED ON THE ADDITIONS MADE UNDER SECTION 69 OF THE ACT, WHICH WAS STRUCK DOWN BY THE APPELLATE AUTHORITY, THE INITIATED PENAL PROCEEDINGS, NO LONGER EXISTS. IF THE APPELLATE AUT HORITY HAD INITIATED PENAL PROCEEDINGS ON THE BASIS OF THE ADDITION SUSTAINED UNDER A NEW GRO UND IT HAS A LEGAL SANCTUM. THIS WAS NOT SO IN THIS CASE AND THEREFORE, ON BOTH THE GROUNDS THE IMPUGNED ORDER PASSED BY THE APPELLATE AUTHORITY AS WELL AS THE ASSESSING AUTHORITY WAS SE T-ASIDE BY ITS ORDER DATED 9TH APRIL, 2009. AGGRIEVED BY THE SAID ORDER, THE REVENUE FILED APPE AL BEFORE HIGH COURT. THE HONBLE HIGH COURT FRAMED THE FOLLOWING QUESTION OF LAW IN THE S AID APPEAL VIZ., 1. WHETHER THE NOTICE ISSUED UNDER SECTION 271(1)(C) IN THE PRINTED FORM WITHOUT SPECIFICALLY MENTIONING WHETHER THE PROCEEDINGS ARE INITIATED ON THE GROUND OF CONCEALM ENT OF INCOME OR ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS IS VALID AND LEGAL? 2. WH ETHER THE PROCEEDINGS INITIATED BY THE ASSESSING AUTHORITY WAS LEGAL AND VALID? THE HONB LE KARNATAKA HIGH COURT HELD IN THE NEGATIVE AND AGAINST THE REVENUE ON BOTH THE QUESTI ONS. THEREFORE THE DECISION RENDERED BY THE ITAT MUMBAI IN THE CASE OF EARTHMOVING EQUIPMEN T SERVICE CORPORATION (SUPRA) IS OF NO ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US. 11. IN THE CASE OF M/S.MAHARAJ GARAGE & CO. VS. CI T DATED 22.8.2017 REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LEARNED DR, WHICH IS AN UNREPORTED DECISION AND A COPY OF THE SAME WAS NOT FURNISHED, THE SAME PROPOSITION AS WAS LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUPRA) APPEARS TO HAVE BEEN REITERATED, AS IS EVIDENT FROM THE EXTRACTS FURNISHED IN THE WRITTEN NOTE FURNISHE D BY THE LEARNED DR BEFORE US. 12. IN THE CASE OF TRISHUL ENTERPRISES ITA NO.384 & 385/MUM/2014, THE MUMBAI BENCH OF ITAT FOLLOWED THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUPRA). 13. IN THE CASE OF MAHESH M. GANDHI (SUPRA) THE MU MBAI ITAT THE ITAT HELD THAT THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE MANJUNATHA COTTON & GINNING (SUPRA) WILL NOT BE APPLICABLE TO THE FACTS OF THAT CASE BECAUSE THE AO IN THE ASSESSMENT ORDER WHILE INITIATING PENALTY PROCEEDINGS HAS HELD THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME AND MERELY BECAUSE IN THE SHOW CAUSE NOTICE U/S.274 OF THE ACT, THERE IS NO MENTION WHETHER THE PROCEEDINGS ARE FOR FURNISHING INACCURA TE PARTICULARS OR CONCEALING PARTICULARS OF INCOME, THAT WILL NOT VITIATE THE PENALTY PROCEEDIN GS. IN THE PRESENT CASE THERE IS NO WHISPER IN THE ORDER OF ASSESSMENT ON THIS ASPECT. WE HAVE PO INTED OUT THIS ASPECT IN THE EARLIER PART OF THIS ORDER. HENCE, THIS DECISION WILL NOT BE OF AN Y ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US. EVEN OTHERWISE THIS DECISION DOES NOT FOLLOW TH E RATIO LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNI NG (SUPRA) IN AS MUCH AS THE RATIO LAID DOWN IN THE SAID CASE WAS ONLY WITH REFERENCE TO SH OW CAUSE NOTICE U/S.274 OF THE ACT. THE 7 ITA NO. 106/KOL/2018 JAYANTA SAHA., AY 2010-11 HONBLE COURT DID NOT LAY DOWN A PROPOSITION THAT T HE DEFECT IN THE SHOW CAUSE NOTICE WILL STAND CURED IF THE INTENTION OF THE CHARGE U/S.271( 1) (C ) IS DISCERNIBLE FROM A READING OF THE ASSESSMENT ORDER IN WHICH THE PENALTY WAS INITIATED . 14. FROM THE AFORESAID DISCUSSION IT CAN BE SEEN T HAT THE LINE OF REASONING OF THE HONBLE BOMBAY HIGH COURT AND THE HONBLE PATNA HIGH COURT IS THAT ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE AB OUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DO NE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING OF THE INACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUNAL BENCHES AT MUMBAI AND PATNA BEING SUBORDIN ATE TO THE HONBLE BOMBAY HIGH COURT AND PATNA HIGH COURT ARE BOUND TO FOLLOW THE AFORES AID VIEW. THE TRIBUNAL BENCHS AT BANGALORE HAVE TO FOLLOW THE DECISION OF THE HONBL E KARNATAKA HIGH COURT. AS FAR AS BENCHES OF TRIBUNAL IN OTHER JURISDICTIONS ARE CONC ERNED, THERE ARE TWO VIEWS ON THE ISSUE, ONE IN FAVOUR OF THE ASSESSEE RENDERED BY THE HONBLE K ARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) AND OTHER OF TH E HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA. IT IS SETTLED LEGAL POSITI ON THAT WHERE TWO VIEWS ARE AVAILABLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO B E FOLLOWED. WE THEREFORE PREFER TO FOLLOW THE VIEW EXPRESSED BY THE HONBLE KARNATAKA HIGH CO URT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA). 15. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE N OTICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASS ESSEE AS TO WHETHER IT IS FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIKE OUT THE INAPPROP RIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY CANNOT BE SU STAINED. THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED T O IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE THEREFORE HOLD THAT IMPOSITION OF PENA LTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE CANCELLED. 7. RESPECTFULLY FOLLOWING THE AFORESAID ORDER OF TH E HONBLE CALCUTTA HIGH COURT IN THE CASE OF DR. MURARI MOHAN KOLEY, SUPRA AND COORDINAT E BENCH OF THIS TRIBUNAL, WE, THEREFORE, HOLD THAT PENALTY IMPOSED BY THE AO AND CONFIRMED BY THE LD. CIT(A) U/S. 271(1)(C) OF THE ACT IN THE PRESENT CASE IS NOT SUS TAINABLE AND HENCE, WE DELETE THE SAME. THE APPEAL OF ASSESSEE IS ALLOWED. 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 19/09/201 8 SD/- SD/- (M. BALAGANESH) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19TH SEPTEMBER, 2018 JD.(SR.P.S.) 8 ITA NO. 106/KOL/2018 JAYANTA SAHA., AY 2010-11 COPY OF THE ORDER FORWARDED TO: 1 APPELLANT SHRI JAYANTA SAHA, C/O SUBASH AGARWAL & ASSOCIATES, SIDDHA GIBSON, 1, GIBSON LANE, SUITE-213, 2 ND FLOOR, KOLKATA-700 069. . 2 RESPONDENT DCIT, CIRCLE-25, KOLKATA. 3 4 5 CIT(A)-XIV, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY