DCIT CC 3(4) CEN RG 3, MUMBAI V. LAXMICHAND D. ROHIRA, MUMBAI

ITA 1178/MUM/2016

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 9847 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2002-2003
• Appeal Filed On: 07-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Gift; Search and seizure; Opportunity of being heard; Principle of natural justice; Initiation of penalty proceedings; Reasonable cause; Assessment record
• Section: 142(1); 133A; 27; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI R.C. SHARMA , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO S . 1178 TO 1184 / MUM/ 2016 ( / ASSESSMENT YEA R S : 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07, 2008 - 09 & 2007 - 0 8 ) DY. CIT CC - 3(4) CENTRAL RANGE - 3 ROOM NO. 1915, 19 TH FLOOR, AIR INDIA BLDG, NARIMAN POINT, MUMBAI - 400021. / VS. SHRI LAKHMICHAND D. ROHIRA, 2301, DHEERAJ HEIGH GAURAV, NEW LINK RD, ANDHERI (W), MUMBAI - 400053. CO . NO S . 250 TO 256 /MUM/201 7 (ARISING OUT OF ITA. NO S . 1183, 1178, 1179, 1180, 1181 1182 & 1184/M/2016 ) ( / ASSESSMENT YEAR S : 2008 - 09, 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07& 2007 - 08 ) SHRI LAKHMICHAND D. ROHIRA, 2301, DHEERAJ HEIGH GAURAV, NEW LIN K RD, ANDHERI (W), MUMBAI - 400053. / VS. DY. CIT CC - 3(4) CENTRAL RANGE - 3 ROOM NO. 1915, 19 TH FLOOR, AIR INDIA BLDG, NARIMAN POINT, MUMBAI - 400021. ./ ./ PAN/GIR NO. : ADNPR 6420 M ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 05 .0 9 .201 8 / DATE OF PRONOUNCEMENT : 24.09 .2018 REVENUE BY: SHRI CHAITANYA ANJARIA (DR) ASSESSEE BY : SHRI VIMAL PUNMIYA (AR) ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 2 / O R D E R PER BENCH : THE REVENUE AS WELL AS ASSESSEE HAVE FILED THE ABOVE MENTIONED APPEAL S /CROSS - OBJECTION AGAINST THE ORDER DATED 18 .1 2 .2015 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 51 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A) ] RELEVANT TO THE A.Y. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07, 2008 - 09 & 2007 - 08 IN WHICH THE PENALTY LEVIED BY THE AO HAS BEEN ORDERED TO BE DELETED . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) MUMBAI ERRED IN DELETING THE PENALTY ON CLUB INCOME STATING THAT THE SAME IS ESTIMATED BY AO WITHOUT APPRECIATING THAT STATEMENTS OF HIS EMPLOYEES HAVE CLEARLY DISCLOSED CONCEALMENT OF THE ACTUAL INCOME OF THE CLUB. 2. THE A PPELLANT CRAVES TO LEAVE, TO ADD, TO AMEND AND/ OR TO ALTER ANY OF THE GROUNDS OF APPEAL IF NEED BE. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE A SSESSEE RUNS A CLUB IN THE NAME OF SHREERAM SOCIAL CLUB AND NAVRANG SOCIAL CLUB. DURING THE SEARCH ACTION U/ S 132 OF THE ACT, IT WAS FOUND THAT THE GAMBLING ACTIVITIES WA S BEING CARRIED OUT IN THE CLUB . O N THE BASIS OF THE STATEMENTS OF THE ASSESSEE EMPLOYEES, THE CLUBS DAILY INCOME WAS ESTIMATED TO THE TUNE OF RS.1,00,000/ - . THEREAFTER, THE ASSESSEE FILED AN A PPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ADDITION TO THE EXTENT OF 13,750/ - IN THE HANDS OF THE ASSESSEE. BESIDES THE ADDITION ON ACCOUNT OF CLUB INCOME , SOME MORE ADDITIONS WAS ALSO RAISED IN THE ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 3 ABOVE SAID ASSESSMENT YEARS. ALL THE ADDITIONS FINALLY SUS TAINED BY THE CIT(A) AND ASSESSMENT YEARS WISE ADDITION ARE BEING MENTIONED BELOW .: - A.Y. CLUB INCOME OTHER ADDITIONS 2002 - 03 50,18,750 1,30,731/ - (INCOME FROM UNACCOUNTED SOURCE) 2003 - 04 50,18,750 2,00,000/ - (GIFTS) 2004 - 05 50,18,750 3,36,065/ - (GIFT S) 2006 - 07 50,18,750 - 2007 - 08 50,18,750 - 2008 - 09 50,18,750 9,71,220/ - (RENOVATION& ELECTRONIC ITEMS PURCHASED) SUBSEQUENTLY, THE PENALTY PROCEEDING WAS INITIATED AND THE PENALTY WAS LEVIED. THE ASSESSEE CHALLENGED THE PENALTY BEFORE THE CIT(A) AND TH E CIT(A) RESTRICTED TO LEVY THE PENALTY UPON THE AMOUNT OF RS.1,30,731/ - FOR THE A.Y. 2002 - 03 AND FOR THE REMAINING YEARS, T HE PENALTY WAS ORDERED TO BE DELETED. 4 . WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED TH E RECORD. THE CONTENTION OF THE LD. REPRESENTATIVE OF THE REVENUE IS THAT THE CIT(A) HAS ERRED I N DELETING THE PENALTY SPECIFICALLY IN THE CIRCUMSTANCES, WHEN THE EMPLOYEES OF THE CLUB DISCLOSED ABOUT THE CONCEALMENT OF ACTUAL INCOME OF THE CLUB. ON THE OT HER HAND, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT A SEARCH AND SEIZURE ACTION WAS CARRIED OUT IN THE RESIDENCE AND OFFICE PREMISES OF THE BINDRA GROUP U/S 132 OF THE ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 4 I.T. ACT, 1961 ON 08.05.2007. THE ASSESSEE WAS ALSO COVERED UNDER THE SAID SEARCH OPERATIONS. IT IS ARGUED THAT THE ASSESSEE WAS 50% OF THE SHARE - HOLDER IN THE SHRI RAM SOCIAL CLUB AND NAVRANG SOCIAL CLUB AND THE 50% WAS BELONGING TO SHRI DHANVINDER SINGH BINDRA AND IN THE CASE OF DHANVINDER SINGH BINDRA , T HE PENALTY HAS BEEN ORD ERED TO BE DELETED BY THE CIT(A) AND CONFIRMED BY THE HONBLE ITAT IN ITA. NO. 5694 TO 5699/M/2015, THEREFORE, IN THE SAID CIRCUMSTANCES, THE CASE OF THE ASSESSEE IS ALSO FULLY COVERED BY THE ORDER DATED 01.11.2017 HENCE THE APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. IT IS ALSO ARGUED BY THE ASSESSEE HAS RAISED THE CROSS - OBJECTION WITH REGARD TO DEFAULT OF NOTICE TO LEVY THE PENALTY WHICH HAS ALSO BEEN DISCUSSED AND DECIDED IN FAVOUR OF THE SHRI DHANVINDER SINGH BINDRA BY HONBLE ITAT IN THE ABOVE SAID CASE (SUPRA) DATED 01.11.2017, THEREFORE, IN THE SAID CIRCUMSTANCES, THE APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED AND THE CROSS - OBJECTION IS LIABLE TO BE ALLOWED. ON APPRAISAL OF THE ORDER PASSED BY THE CIT(A) IN THE PRESENT CASE AND ON APPRAISAL O F THE ORDER OF THE HONBLE ITAT PASSED IN ITA. NOS. 5694 TO 5699/M/2015 FOR THE A.YS. 2002 - 03 TO 2007 - 08 DATED 01.11.2017, WE NOTICED THAT THE SEARCH AND SEIZURE ACTION WAS CARRIED OUT U/S 132 OF THE I.T. ACT, 1961 ON 08.05.2007 AT THE RESIDENCE AND OFFICE PREMISES OF BINDRA GROUP . THE ASSESSEE WAS ALSO COVERED UNDER THE SAID SEARCH OPERATIONS . THE ASSESSEE WAS HAVING 50% SHARE IN SHREE RAM SOCIAL CLUB AND THE REMAINING SHARE TO THE EXTENT OF 50% WAS WITH THE DHANVINDER SINGH BINDRA . THE CIT(A) HAS SET ASID E THE ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 5 PENALTY BY VIRTUE OF ORDER DATED 09.09.2015 FOR THE A.Y. 2002 - 03 TO 2007 - 08. SUBSEQUENTLY, THE REVENUE HAS FILED AN APPEAL BEFORE THE ITAT IN ITA. NO. 5694 TO 5699/M/2015 FOR THE A.YS. 2002 - 03 TO 2007 - 08 ORDER DATED 01.11.2017 IN WHICH THE APPEAL OF THE REVENUE HAS BEEN ORDERED TO BE DISMISSED AND THE ORDER OF THE LD. CIT(A) DATED 09.09.2015 HAS BEEN ORDERED TO BE SUS TAINED. THE FACTUAL SITUATION IN THE PRESENT CASE IS ALSO THE SAME. THE INCOME WHICH HAS BEEN DISCUSSED IN THE CASE OF DHANVINDER SINGH BINDRA HAS ALSO BEEN DISCUSSED IN THE PRESENT CASE ALSO. HOWEVER, THE INCOME HAS DIVIDED INTO 50% SHARE EACH WITH THE DHANVINDER SINGH BINDRA AND THE LAKHMICHAND D ROHIRA. BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE HONBLE I TAT ON RECORD .: - 9 . WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. THE FACTS INVOLVED IN ALL THESE APPEALS ARE UNDISPUTED. IN ALL THESE CASES THIS IS A FACT THAT IN EACH OF THE ASSESSM ENT YEARS, THE RETURN OF INCOME IN PURSUANT TO NOTICE UNDER SECTION 133A WAS FILED BY THE ASSESSEE ON 15.10.2008 DISCLOSING FOLLOWING INCOME: - A.Y. INCOME (D`) 2002 - 03 2,40,638/ - 2003 - 04 17,83,423/ - 2004 - 05 9,25,135/ - 2005 - 06 7,09,592/ - SHRI DHANVINDER B INDRA 2006 - 07 8,65,115/ - 2007 - 08 16,63,833/ - ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 6 2008 - 09 77,91,704/ - AGAINST THESE INCOMES THE AO COMPUTED THE ADDITION AT `1,82,50,000/ - ASSUMING A DAILY INCOME `50,000/ - FROM SHRI RAM SOCIAL CLUB, 50% SHARE OF WHICH WAS ADDED IN THE CASE OF MR. LAXMICHAND RO HIRA AND BALANCE IN THE HANDS OF THE ASSESSEE BUT IN A.Y. 2008 - 09 THE ADDITION WAS MADE 50% OF `19,43,050/ - . WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) HAS REDUCED THE DAILY INCOME FROM `50,000/ - TO `13,750/ - IN A.Y. 2002 - 03 AND IN THE SUBSEQUENT A SSESSMENT YEAR ALSO AND ULTIMATELY GAVE PARTIAL RELIEF IN EACH OF THE ASSESSMENT YEAR. WHEN THE MATTER TRAVELLED TO THE TRIBUNAL, THE TRIBUNAL FURTHER DELETED THE ADDITIONS: - A.Y. ADDITION DELETED (`D`) 2002 - 03 - 26,93,350/ - 2003 - 04 - 24,35,050/ - 2004 - 05 - 2 1,48,050/ - 2005 - 06 - 18,29,200/ - 2006 - 07 - 14,75,000/ - 2007 - 08 - 10,81,250/ - 2008 - 09 - 1,94,300/ - AGAINST THESE INCOMES THE AO COMPUTED THE ADDITION AT `1,82,50,000/ - ASSUMING A DAILY INCOME `50,000/ - FROM SHRI RAM SOCIAL CLUB, 50% SHARE OF WHICH WAS ADDED IN THE CASE OF MR. LAXMICHAND ROHIRA AND BALANCE IN THE HANDS OF THE ASSESSEE BUT IN A.Y. 2008 - 09 THE ADDITION WAS MADE 50% OF `19,43,050/ - . WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) HAS REDUCED THE DAILY INCOME FROM `50,000/ - TO `13,750/ - IN A.Y. 2 002 - 03 AND IN THE SUBSEQUENT ASSESSMENT YEAR ALSO AND ULTIMATELY GAVE PARTIAL RELIEF IN EACH OF THE ASSESSMENT YEAR. WHEN THE MATTER TRAVELLED TO THE TRIBUNAL, THE TRIBUNAL FURTHER DELETED THE ADDITIONS: - A.Y. `) ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 7 ADDITION DELETED (` 2002 - 03 26,93,350/ - 2003 - 04 24,35,050/ - 2004 - 05 21,48,050/ - 2005 - 06 18,29,200/ - 2006 - 07 14,75,000/ - 2007 - 08 10,81,250/ - 2008 - 09 1,94,300/ - 10. THUS IT IS NOT DENIED THAT ULTIMATELY THE ADDITION SUSTAINED IN THE HANDS OF THE ASSESSEE ARE BASED ON ESTIMATE. WE NOTED FURTHER THAT IN EACH OF THE CASES, THE AO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) DURING THE COURSE OF ASSESSMENT BY OBSERVING IN THE A SSESSMENT ORDER 'PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE INITIATED SEPARATELY'. SUBSEQUENTLY NOTICE UNDER SECTION 271(1)(C) WAS ISSUED 23.12.2 009 BY OBSERVING AS UNDER: - 'WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2002 - 03 IT APPEARS TO ME THAT YOU: - HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH ME RETURN OF INCOME WHICH YOU WERE REQUIRED TO FURNISH BY A NOTICE GIVE N UNDER SECTION 139 (2)/148 OF THE INCOME TAX ACT , 1961 NO. ...... DATED ................ OR HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH IT WITHIN THE TIME SHRI DHANVINDER BINDRA ALLOWED AND THE MANNER REQUIRED BY THE SAID SECTION 139(1) OR BY SUCH NOTICE. * HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE UNDER SECTION 22(4) / 23(2) OF THE INDIAN INCOME - TAX ACT, 1922 OR UNDER SECTION 142(1) / 143(2) OF THE INCOME - TAX ACT, 1961. NO .................. DATED ................................... * HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR ......... FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 8 YOU ARE HEREBY REQUESTED TO A PPEAR BEFORE ME WITHIN 7 DAYS FROM RECEIPT OF THIS NOTICE AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE UNDER SECTION 271 OF THE INCOME - TAX ACT, 1961 . IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE, YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECTION 271(1)(C) . SD/ - (PRASOON KABRA) ACIT CC 24 & 26' 11. AFTER CONSIDERING THE REPLY OF THE ASSESSEE THE AO LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT BY OBSERVING AS UNDER: - '8. IN VIEW OF THE FACT AND CIRCUMSTANCES MENTION HERE - IN - ABOVE, IT IS BEING CONCLUDED THAT ASSESSEE HAS KNOWINGLY FURNISHED INACCURATE PARTICULARS AND CONCEALED ITS INCOME WITHIN THE MEANING OF SEC.271(1)(C) OF THE I.T. ACT TO THE TUNE OF RS.50,18,750/ - (ADDITION IS PARTLY ALLOWED BY THE LD.CIT(A) IN RESPECT OF CLUB INCOME) AND HENCE IT IS A FIT CASE WHERE PENALTY UNDER SECTION 271(1) (C) IS REQUIRED TO B E IMPOSED. ACCORDINGLY, THE UNDERSIGNED IS PROPOSED TO LEVY PENALTY UNDER SECTION 271(1) (C) IN THIS CASE WHICH IS WORKED OUT AS UNDER: TAX SOUGHT TO BE EVADED RS.15,37,173/ - MINIMUM PENALTY LEVIABLE U/S. 271(1)(C) OF RS.5,37, 173/ - T HE I T ACT @ 100% OF THE TAX SOUGHT TO BE EVADED COMES TO MAXIMUM PENALTY LEVIABLE U/S. 271(1)(C) OF RS.46,11,51 THE I T ACT @ 300% OF THE TAX SOUGHT TO BE EVADED COMES TO 9. TAKING A BALANCED VI EW ON A WELL SETTLED PRINCIPLE, I LEVY MINIMUM PENALTY @100% WHICH WORKS OUT TO RS. 15,37,173/ - U/S.271(1)(C) OF THE INCOME TAX ACT , 1961.' ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 9 12. SIMILARLY PENALTY HAS BEEN LEVIED IN EACH OF THE ASSESSMENT YEARS. WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) DELETED THE PENALTY IN SHRI DHANVINDER BINDRA EACH OF THE ASSESSMENT YEARS ON THE BASIS THAT THE AO HAS NOT BROUGHT OUT ANY SPECIFIC CHARGE WHILE LEVYING PENALTY. 13. THE LEARNED D.R. BEFORE US VEH EMENTLY CONTENDED BY REFERRING TO VARIOUS CASE LAWS WHICH WE WILL DISCUSS WHY THE ORDER OF THE CIT(A) SHOULD BE REVERSED. FIRSTLY HE RELIED ON THE ORDER OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SUSHIL KUMAR SHARAD KUMAR VS. CIT 232 ITR 588. IN THAT CASE WE NOTED THAT THE PENALTY HAS BEEN LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME. THE HON'BLE HIGH COURT CONFIRMED THE LEVY OF PENALTY AS THERE IS EVIDENCE OF HIGHER EXPENDITURE INCURRED BY THE ASSESSEE AND DURING THE PENALTY PROCEEDINGS THE ASSESSEE DID NOT LEAD ANY EVIDENCE TO PROVE THAT THE EXPENDITURE INCURRED BY HIM FOR HOUSEHOLD WERE LOW. THEREFORE UNDER THESE FACTS THE HON'BLE HIGH COURT CONFIRMED THE PENALTY. THIS DECISION, IN OUR OPINIO N, IS NOT APPLICABLE TO THE FACTS OF THE CASE BEFORE US. IN THE CASE OF THE ASSESSEE, WE NOTED, THE AO HAD NOT LEVIED PENALTY FOR CONCEALMENT OF PARTICULARS OF INCOME. 14. IN THIS REGARD WE MAY REFER TO THE PROVISIONS OF SECTION 271(1)(C) . THIS SECTION EMPOWERS THE AO TO LEVY PENALTY UNDER THESE PROVISIONS IF THE AO IS SATISFIED ANY PERSON HAD CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THIS MEANS PENALTY CAN BE IMPOSED ON THE ASSESSEE UNDER TWO CIRCUMSTANCES; ONE THE AO FINDS THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME OR THE OTHER CIRCUMSTANCE IS THAT THE AO FINDS THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE WORD UNDER SECTION 271(1)(C) BETWEEN CONCEALED THE PARTICULARS OF HIS INCOME AND FURNISHED INACCURATE PARTICULARS OF SUCH INCOME IS 'OR' NOT 'AND'. THIS DENOTES IF THE ASSESSEE HAS COMMITTED ANY OF THESE TWO DEFAULTS PENALTY UNDER SECTION 271(1)(C) HAS TO BE IMPOSED BY THE AO. BOTH THESE DEFAULTS, AS THE PROVISION OF 271(1)(C) DENOTES, ARE DIFFERENT FROM EACH OTHER ALTHOUGH THE CONSEQUENCE OF BOTH THE DEFAULTS MAY B E THAT THE ASSESSEE HAS CONCEALED INCOME. HOWEVER, WE NOTED THAT THERE IS EXPLANATION 1 GIVEN UNDER SECTION 271(1)(C) WHICH IS APPLICABLE IN THE CASE OF CONCEALMENT OF PARTICULARS OF INCOME. IF THE CONTE NTIONS ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 10 STIPULATED UNDER EXPLANATION 1 ARE SATISFIED IT IS DEEMED THAT SHRI DHANVINDER BINDRA PARTICULARS OF INCOME HAVE BEEN CONCEALED BY THE ASSESSEE. EXPLANATION 1, NO DOUBT, IS REBUTTABLE AND THE ASSESSEE CAN ALWAYS ADDUCE THE EVIDENCE OR PUT THE EXPLAN ATION TO COME OUT OF THE APPLICABILITY OF EXPLANATION 1. IN VIEW OF THIS DEEMING PROVISION THE ONUS IS ON THE ASSESSEE TO PROVE THAT HE HAS NOT CONCEALED THE PARTICULARS OF INCOME. SO FAR THE OTHER DEFAULT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME IS CONCERNED, THERE IS NO DEEMING PROVISION AND THE ONUS, IN OUR VIEW, LIES ON THE REVENUE TO PROVE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND FOR THAT THE REVENUE IS BOUND TO BRING NECESSARY EVIDENCE ON RECORD AND PUT THIS EVIDEN CE BEFORE THE ASSESSEE SO THAT THE ASSESSEE CAN COUNTER THEM AND RULE OF NATURAL JUSTICE IS NOT VIOLATED. SINCE BOTH THE DEFAULTS ARE DIFFERENT, THEREFORE, THE LEGISLATURE, IN OUR OPINION, HAS USED THE WORD BETWEEN BOTH THE DEFAULTS 'OR' INSTEAD OF 'AND'. WE CANNOT TAKE THE VIEW THAT THE ASSESSEE HAS COMMITTED BOTH THE DEFAULTS TOGETHER ALTHOUGH THE NATURE OF CONSEQUENCE OF BOTH THE DEFAULTS IS ONE, I.E. CONCEALMENT OF INCOME. THE ONLY COMMON ATTRIBUTE BETWEEN BOTH THE DEFAULTS IS THE PARTICULARS. 15. WE HA VE ALSO GONE THROUGH THE DECISION OF THE 'I' BENCH OF THIS TRIBUNAL IN THE CASE OF SHRI MAHESH M. GANDHI VS. ACIT, ITA NO . 2976/MUM/2016. WE NOTED THAT IN THIS DECISION THE TRIBUNAL HAS 'CONFIRMED THE PENALTY AS NOTICE HAS NOT BEEN ISSUED IN STANDARD PRINTED FORMAT, RATHER THE SAME HAS BEEN SPECIFICALLY BEEN DRAFTED BY THE AO BEFORE SENDING NOTICE TO THE ASSESSEE AND THEREFORE THE TRIBUNAL WAS OF THE VIEW THAT BEFORE INITIATING THE PENALTY THE AO HAS AP PLIED HIS MIND. THE TRIBUNAL WAS ALSO AWARE THAT IN THE CASE WHERE THE AO HAS FRAMED CHARGE UNDER ONE LIMB OF SECTION 271(1)(C) BUT LEVIED PENALTY UNDER THE OTHER LIMB OF SECTION 271(1)(C) . THIS FACT IS CLEAR FROM THE FINDINGS OF THE TRIBUNAL WHICH ARE REPRODUCED AS UNDER: - 'WE DO NOT FIND ANY INFIRMITY IN THE NOTICE DATED 20 - 02 - 2014 ISSUED BY THE A.O. U/S 271(1)(C) R.W.S. 274 OF THE ACT WHEREIN THE AO HAS CLEARLY FRAMED AN ALTERNATE CHARGES FOR LEVYING PENALTY U/S 271(1)(C) OF THE ACT AT THE STAGE OF ISSUE OF NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT. MORE - SO IT IS NOT A STANDARD PRINTED FORMAT WHICH IS SENT TO THE SHRI DHANVINDER BINDRA ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 11 ASSESSEE RATHE R THE SAME IS SPECIFICALLY DRAFTED BY THE AO BEFORE SENDING TO THE ASSESSEE WHICH SHOWED APPLICATION OF MIND BY THE AO. IT IS ALSO NOT THE CASE THAT THE AO HAS FRAMED CHARGE UNDER ONE LIMB OF SECTION 271( 1)(C) OF THE ACT AND LEVIED THE PENALTY UNDER THE SECOND LIMB OF SECTION 271(1)(C) OF THE ACT. THE ASSESSMENT ORDER DATED 20 - 02 - 2014 ALSO CLEARLY SHOWED APPLICATION OF MIND BY THE AO BEFORE INITIATING PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT.' 16. IN THAT CASE, WE NOTED, THE TRIBUNAL ALSO FOUND THAT THE AO BEFORE INITIATING PENALTY PROCEEDINGS DURING THE COURSE OF ASSESSMENT RECORDED HIS SATISFACTION IN DETAIL AND THAT WAS NOT THE CASE WHERE NO SATI SFACTION HAS BEEN RECORDED WITH REFERENCE TO THE CHARGE TO BE LEVIED ON THE ASSESSEE. EVEN WE NOTED THAT THE TRIBUNAL IN THAT DECISION DID NOT APPRECIATE THE NOTICE ISSUED BY THE AO EVEN THOUGH IT WAS SPECIFICALLY BEEN DRAFTED BY THE AO. THE AO HAS NOT BRO UGHT OUT ANY SPECIFIC CHARGE BUT CONFIRMED THE PENALTY LEVIED ON THE ASSESSEE. WE NOTED THAT IN THAT CASE THE TRIBUNAL MAINLY REFERRED TO THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565. IN THAT DECISION, WE NOTED, THE HON'BLE HIGH COURT UNDER PARA 50 HAS CLEARLY MENTIONED AS UNDER: - 50. A READING OF SECTION CLEARLY INDICATES THAT THE ASSESSMENT ORDER SHOULD CONTAIN A DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS. THE MEANING OF THE WORD D IRECTION IS OF IMPORTANCE. MERELY SAYING THAT PENALTY PROCEEDINGS ARE BEING INITIATED WILL NOT SATISFY THE REQUIREMENT. THE DIRECTION TO INITIATE PROCEEDINGS SHOULD BE CLEAR AND NOT BE AMBIGUOUS. IT IS WELL SETTLED LAW THAT FISCAL STATUTES ARE TO BE CONSTR UED STRICTLY AND MORE SO THE DEEMING PROVISIONS BY WAY OF LEGAL FICTION ARE TO BE CONSTRUED MORE STRICTLY. THEY HAVE TO BE INTERPRETED ONLY FOR THE SAID ISSUE FOR WHICH IT HAS DEEMED AND THE MANNER IN WHICH THE DEEMING HAS BEEN CONTEMPLATED TO BE RESTRICTE D IN THE MANNER SOUGHT TO BE DEEMED. AS THE WORDS USED IN THE LEGAL FICTION OR THE DEEMING PROVISIONS OF SECTION 271(1B) IS DIRECTION, IT IS IMPERATIVE THAT THE ASSESSMENT ORDER CONTAINS A DIRECTION. USE OF THE PHRASES LIKE (A) PENALTY PROCEEDINGS ARE BEING INITIATED SEPARATELY AND (B) PENALTY PROCEEDINGS UNDER SECTION 271(L)(C) ARE INITIATED SEPARATELY, DO NOT COMPLY ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 12 WITH THE MEANING OF THE WORD DIRECT ION AS CONTEMPLATED EVEN IN THE AMENDED PROVISIONS OF LAW. THE DIRECTION SHOULD BE CLEAR AND WITHOUT ANY AMBIGUITY. THE WORD 'DIRECTION' HAS BEEN INTERPRETED BY THE DECISION OF THE APEX COURT IN THE CASE OF RAJENDRANATH 120 ITR PG.14,WHERE IT HAS BEEN HELD THAT IN ANY EVENT WHATEVER ELSE IT MAY AMOUNT TO, ON ITS VERY TERMS THE OBSERVATION THAT THE ITO IS FREE TO TAKE ACTION, TO ASSESS THE EXCESS IN THE HAND OF THE CO - OWNERS CANNOT SHRI DHANVINDER BINDRA BE DESCRIBED AS A DIRECTION. A DIRECTION BY A STATUTOR Y AUTHORITY IS IN THE NATURE OF AN ORDER REQUIRING POSITIVE COMPLIANCE. WHEN IT IS LEFT TO THE OPTION AND DISCRETION OF THE ITO WHETHER OR NOT TAKE ACTION, IT CANNOT BE DESCRIBED AS A DIRECTION. 51. THEREFORE, IT IS SETTLED LAW THAT IN THE ABSENCE OF THE E XISTENCE OF THESE CONDITIONS IN THE ASSESSMENT ORDER PENALTY PROCEEDINGS COULD NOT BE PROCEEDED WITH. THE PROCEEDINGS WHICH ARE INITIATED CONTRARY TO THE SAID LEGAL POSITION ARE LIABLE TO BE SET ASIDE.' 17. IF THE FINDING GIVEN BY THE HON'BLE HIGH COURT WH ICH HAS BEEN REFERRED TO BY THE BENCH IN THAT CASE HEAVILY RELIED BY THE LEARNED D.R., ARE APPLICABLE TO THE IMPUGNED CASE OF THE ASSESSEE. WE FIND THAT IN THE CASE OF THE IMPUGNED ASSESSEE THE AO WHILE INITIATING PENALTY HAS SIMPLY OBSERVED 'PENALTY PROCE EDINGS UNDER SECTION 271(1)(C) ARE INITIATED SEPARATELY'. THE HON'BLE KARNATAKA HIGH COURT, AS HAS BEEN RELIED UPON BY THE 'I' BENCH, WHILE CONFIRMING THE PENALTY IN THE CASE OF MANJUNATHA COTTON AND GIN NING FACTORY (SUPRA) HAS CLEARLY HELD THAT MERELY SAYING THE PENALTY PROCEEDINGS ARE INITIATED WILL NOT SATISFY THE REQUIREMENT WITH REGARD TO THE DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS. NOT ONLY THIS, WE NOTED, IN THE DECISION THE HON'BLE MEMBER HAS NOT APPRECIATED THE FINDINGS GIVEN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY (SUPRA) . IN THAT CASE THE QUESTION BEFORE THE HON'BLE HIGH COURT WAS 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, TH E TRIBUNAL WAS JUSTIFIED IN DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961?' WHILE DECIDING THIS ISSUE THE HON'BLE HIGH COURT OBSERVED AS UNDER: - ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 13 '3 THE IMPUGNED ORDER O F THE TRIBUNAL DELETED THE PENALTY IMPOSED UPON THE RESPONDENT ASSESSEE. THIS BY HOLDING THAT THE INITIATION OF PENALTY UNDER SECTION 271 (1)(C) OF THE ACT BY ASSESSING OFFICER WAS FOR FURNISHING INACCUR ATE PARTICULARS OF INCOME WHILE THE ORDER IMPOSING PENALTY IS FOR CONCEALMENT OF INCOME. THE IMPUGNED ORDER HOLDS THAT THE CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THEREFORE, THE ASSESSING OFFICER SHOULD BE CLEAR AS TO WHICH OF THE TWO LIMBS UNDER WHICH PENALTY IS IMPOSABLE, HAS BEEN CONTRAVENED OR INDICATE THAT BOTH HAVE BEEN CONTRAVENED WHILE INITIATING PENALTY PROCEEDINGS. IT CANNOT BE THAT THE INITIATION WOULD BE ONLY ON ONE LIMB I.E. FOR FURNIS HING INACCURATE PARTICULARS OF INCOME WHILE IMPOSITION OF PENALTY ON THE OTHER LIMB I.E. CONCEALMENT OF INCOME. FURTHER, THE TRIBUNAL ALSO SHRI DHANVINDER BINDRA NOTED THAT NOTICE ISSUED UNDER SECTION 27 4 OF THE ACT IS IN A STANDARD PROFORMA, WITHOUT HAVING STRIKED OUT IRRELEVANT CLAUSES THEREIN. THIS INDICATES NON - APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER WHILE ISSUING THE PENALTY NOTICE. 4 THE IMPUGNED ORDER RELIED UPON THE FOLLOWING EXT RACT OF KARNATAKA HIGH COURT'S DECISION IN CIT V/S. MANJUNATH COTTON AND GINNING FACTORY 359 ITR 565 TO DELETE THE PENALTY: 'THE ASSESSING OFFICER IS EMPOWERED UNDER THE ACT TO INITIATE PENALTY PROCEEDINGS ONCE HE IS SATISFIED IN THE COURSE OF ANY PROCEEDI NGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF TOTAL INCOME UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICULARS OF INCOME ARE DIFFERENT. THUS, THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS TO COME TO THE CO NCLUSION THAT WHETHER IS IT A CASE OF CONCEALMENT OF INCOME OR IS IT AS CASE OF FURNISHING OF INACCURATE PARTICULARS. THE APEX COURT IN THE CASE OF ASHOK PAI REPORTED IN [2007] 292 ITR 11 (SC) AT PAGE 19 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING I NACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEERING REPORTED IN 122 ITR 306 AND THE DELHI HIGH COURT IN THE CASE OF VIRGO MARKETING P. LTD., REPORTED IN 171 TAXMN 156, HAS HELD THAT LEVY OF P ENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BEING UNCLEAR PENALTY IS NOT SUSTAINABLE. THEREFORE, WHEN THE ASSESSING OFFICER PROPOSES ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 14 TO INVOKE THE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATELY MARKE D. SIMILAR IS THE CASE FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE STANDARD PROFORMA WITHOUT STRIKING OF THE RELEVANT CLAUSES WILL LEAD TO AN INFERENCE AS TO NONAPPLICATION OF MIND.' 5. THE GRIEVANCE OF THE REVENUE BEFORE US IS THAT THERE IS NO DI FFERENCE BETWEEN FURNISHING OF INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. THUS, DISTINCTION DRAWN BY THE IMPUGNED ORDER IS BETWEEN TWEEDLEDUM AND TWEEDLEDEE. IN THE ABOVE VIEW, THE DELETION OF THE PENALTY, IS UNJUSTIFIED. 6. THE ABOVE SUBM ISSION ON THE PART OF THE REVENUE IS IN THE FACE OF THE DECISION OF THE SUPREME COURT IN ASHOK PAI V/S. CIT 292 ITR 11 [RELIED UPON IN MANJUNATH COTTON & GINNING FACTORY (SUPRA)] - WHEREIN IT IS OBSERVED THAT CONCEALMENT OF INCOME AND FURNISHING OF INACCUR ATE PARTICULARS OF INCOME IN SECTION 271(1)(C) OF THE ACT, CARRY DIFFERENT MEANINGS/ CONNOTATIONS. THEREFORE, THE SATISFACTION OF THE ASSESSING OFFICER WITH REGARD TO ONLY ONE OF THE TWO BREACHES MENTION ED UNDER SECTION 271(1)(C) OF THE ACT, FOR INITIATION OF PENALTY PROCEEDINGS WILL NOT WARRANT/ PERMIT PENALTY BEING IMPOSED FOR THE OTHER BREACH. THIS IS MORE SO, AS AN ASSESSEE WOULD RESPOND TO THE GROU ND ON WHICH THE PENALTY HAS BEEN INITIATED/NOTICE ISSUED. IT MUST, THEREFORE, FOLLOW THAT THE ORDER IMPOSING PENALTY HAS TO BE MADE ONLY ON THE GROUND OF SHRI DHANVINDER BINDRA WHICH THE PENALTY PROCEEDINGS HAS BEEN INITIATED, AND IT CANNOT BE ON A FRESH G ROUND OF WHICH THE ASSESSEE HAS NO NOTICE. 7 THEREFORE, THE ISSUE HEREIN STANDS CONCLUDED IN FAVOUR OF THE RESPONDENT ASSESSEE BY THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATH COTTON AND GINNING FACTORY (SUPRA). NOTHING HAS BEEN SHOWN T O US IN THE PRESENT FACTS WHICH WOULD WARRANT OUR TAKING A VIEW DIFFERENT FROM THE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATH COTTON AND GINNING FACTORY (SUPRA). ULTIMATELY IT WAS HELD THAT THE QUESTION AS FRAMED DO NOT GIVE RISE TO ANY SUBSTANTIAL QUES TION OF LAW. THEREFORE THE FINDING GIVEN BY THE TRIBUNAL THAT PENALTY MUST BE INITIATED FOR SPECIFIC CHARGE HAS BEEN CONFIRMED. EVEN THE FINDING OF THE TRIBUNAL THAT ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 15 THE NOTICE ISSUED UNDER SECTION 274 OF THE ACT IS IN A STANDARD PROFORMA, WITHOUT HAVING STRIKED OUT IRRELEVANT CLAUSES THEREIN REPRESENT NON - APPLICATION OF MIND ON THE PART OF THE AO WHILE ISSUING PENALTY NOTICE HAS NOT BEEN DISTURBED. 18. WE NOTED THAT HON'BLE 'C' BENCH IN ITA NOS. 1597 & 1597/MUM/ 2014 IN THE CASE OF M/S. ORBIT ENTERPRISES VS. INCOME TAX OFFICER 15(2)(2), MUMBAI HAD A CHANCE TO DECIDE WHETHER PENALTY CAN BE LEVIED WHEN PENALTY HAS NOT BEEN INITIATED FOR A SPECIFIC CHAR GE. THE COORDINATE BENCH VIDE ITS ORDER DATED 01.09.2017 IN THIS REGARD HELD AS UNDER: - 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. SEC. 271(1)(C) OF THE ACT POSTULATES THAT PENALTY PRESCRIBED THEREIN CAN BE LEVIED ON EXISTENCE OF ANY OF THE T WO SITUATIONS, NAMELY FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME. IT HAS BEEN JUDICIALLY WELL UNDERSTOOD BY NOW THAT 'CONCEALMENT OF PARTICULARS OF INCOME' AND 'FURNISHING OF INACCURATE PARTICULARS OF I NCOME' REFERRED TO IN SEC. 271(1)(C) OF THE ACT DENOTE TWO DIFFERENT CONNOTATIONS. AS A READY REFERENCE FOR THE AFORESAID PROPOSITION, WE MAY LOOK UPON THE JUDGMENTS OF THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF, 161 TAXMAN 218 (SC) AND ALSO T. ASHOK PAI, 292 ITR 11 (SC) TO APPRECIATE THAT THE AFORESAID TWO EXPRESSIONS CONVEY DIFFERENT CONNOTATIONS. HAVING UNDERSTOOD THAT THE TWO EXPRESSIONS HAVE DIFFERENT CONNOTATIONS, THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MEHERJEE CASSINATH HOLDING S PVT. LTD. (SUPRA), WHEREIN ONE OF US IS A PARTY, HELD THAT IT WAS IMPERATIVE FOR THE ASSESSING OFFICER TO MAKE THE ASSESSEE AWARE IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT AS TO WHICH OF THE TWO LIMBS ARE BEING PUT - UP AGAINST HIM FOR THE P URPOSES OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. OSTENSIBLY, UNLESS THE ASSESSEE IS MADE AWARE OF THE SPECIFIC CHARGE AGAINST HIM, IT WOULD BE VIOLATIVE SHRI DHANVINDER BINDRA OF THE PRINCIPLES OF NATURAL JUSTICE INASMUCH AS THE ASSESSEE WOULD NOT BE I N A POSITION TO PUT UP HIS DEFENCE APPROPRIATELY. IT IS IN THIS MANNER ONE HAS TO APPRECIATE THE POINT BEING CANVASSED BY THE ASSESSEE BEFORE US, WHICH IS BASED ON THE TONE AND TENOR OF THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 22.12.2008 , A COPY OF WHICH HAS BEEN PLACED ON ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 16 RECORD. NOTABLY, THE RELEVANT DISCUSSION MADE BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MEHERJEE CASSINATH HOLDINGS PVT. LTD. (SUPRA) IS AS UNDER : - '8. .............. IT IS ALSO A WELL ACCEPTED PROPOSITION THA T 'CONCEALMENT OF THE PARTICULARS OF INCOME' AND 'FURNISHING OF INACCURATE PARTICULARS OF INCOME' REFERRED TO IN SEC. 271(1)(C) OF THE ACT DENOTE DIFFERENT CONNOTATIONS. IN FACT, THIS DISTINCTION HAS BEEN APPRECIATED EVEN AT THE LEVEL OF HON'BLE SUPREME CO URT NOT ONLY IN THE CASE OF DILIP N. SHROFF (SUPRA) BUT ALSO IN THE CASE OF T.ASHOK PAI, 292 ITR 11 (SC). THEREFORE, IF THE TWO EXPRESSIONS, NAMELY 'CONCEALMENT OF THE PARTICULARS OF INCOME' AND 'FURNISHING OF INACCURATE PARTICULARS OF INCOME' HAVE DIFFERE NT CONNOTATIONS, IT IS IMPERATIVE FOR THE ASSESSEE TO BE MADE AWARE AS TO WHICH OF THE TWO IS BEING PUT AGAINST HIM FOR THE PURPOSE OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, SO THAT THE ASSESSEE CAN DEFEND ACCORDINGLY. IT IS IN THIS BACKGROUND THAT ONE HAS TO APPRECIATE THE PRELIMINARY PLEA OF ASSESSEE, WHICH IS BASED ON THE MANNER IN WHICH THE NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 10.12.2010 HAS BEEN ISSUED TO THE ASSESSEE - COMPANY. A COPY OF THE SAID NOTICE HAS BEEN PLACED ON RECORD AND THE L EARNED REPRESENTATIVE CANVASSED THAT THE SAME HAS BEEN ISSUED BY THE ASSESSING OFFICER IN A STANDARD PROFORMA, WITHOUT STRIKING OUT THE IRRELEVANT CLAUSE. IN OTHER WORDS, THE NOTICE REFERS TO BOTH THE LIMBS OF SEC. 271(1)(C) OF THE ACT, NAMELY CONCEALMENT OF THE PARTICULARS OF INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. QUITE CLEARLY, NON - STRIKING - OFF OF THE IRRELEVANT LIMB IN THE SAID NOTICE DOES NOT CONVEY TO THE ASSESSEE AS TO WHICH OF THE TWO CHARGES IT HAS TO RESPOND. THE AFORESAI D INFIRMITY IN THE NOTICE HAS BEEN SOUGHT TO BE DEMONSTRATED AS A REFLECTION OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER, AND IN SUPPORT, REFERENCE HAS BEEN MADE TO THE FOLLOWING SPECIFIC DISCUSSION IN THE ORDER OF HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA): - '83. IT IS OF SOME SIGNIFICANCE THAT IN THE STANDARD PROFORMA USED BY THE ASSESSING OFFICER IN ISSUING A NOTICE DESPITE THE FACT THAT THE SAME POSTULATES THAT INAPPROPRIATE WORDS AND PARAGRAPHS WERE TO BE DELETED, BUT THE SAME HAD NOT BEEN DONE. THUS, THE ASSESSING OFFICER HIMSELF WAS NOT SURE AS TO WHETHER HE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED HIS ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 17 INCOME OR HE HAD FURNISHED INACCURATE PARTICULARS. EVEN BEFORE US, THE LEARNED ADDITIONAL SOLICITOR SHRI DH ANVINDER BINDRA GENERAL WHILE PLACING THE ORDER OF ASSESSMENT LAID EMPHASIS THAT HE HAD DEALT WITH BOTH THE SITUATIONS. 84. THE IMPUGNED ORDER, THEREFORE, SUFFERS FROM NON - APPLICATION OF MIND. IT WAS ALSO BOUND TO COMPLY WITH THE PRINCIPLES OF NATURAL JUS TICE. ( SEE MALABAR INDUSTRIAL CO. LTD. V. CIT [2000] 2 SCC 718]' 9. FACTUALLY SPEAKING, THE AFORESAID PLEA OF ASSESSEE IS BORNE OUT OF RECORD AND HAVING REGARD TO THE PARITY OF REASONING LAID DOWN BY TH E HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA), THE NOTICE IN THE INSTANT CASE DOES SUFFER FROM THE VICE OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. IN FACT, A SIMILAR PROPOSITION WAS ALSO ENUNCIATED BY THE HON'BLE KARNATAKA HIGH C OURT IN THE CASE OF M/S. SSA'S EMERALD MEADOWS (SUPRA) AND AGAINST SUCH A JUDGMENT, THE SPECIAL LEAVE PETITION FILED BY THE REVENUE HAS SINCE BEEN DISMISSED BY THE HON'BLE SUPREME COURT VIDE ORDER DATED 5.8.2016, A COPY OF WHICH IS ALSO PLACED ON RECORD. 1 0. IN FACT, AT THE TIME OF HEARING, THE LD. CIT - DR HAS NOT DISPUTED THE FACTUAL MATRIX, BUT SOUGHT TO POINT OUT THAT THERE IS DUE APPLICATION OF MIND BY THE ASSESSING OFFICER WHICH CAN BE DEMONSTRATED FROM THE DISCUSSION IN THE ASSESSMENT ORDER, WHEREIN AF TER DISCUSSING THE REASONS FOR THE DISALLOWANCE, HE HAS RECORDED A SATISFACTION THAT PENALTY PROCEEDINGS ARE INITIATED U/S 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OUR CONSIDERED OPINION, THE ATTEMPT OF THE LD. CIT - DR TO DEMONSTRATE APPLICATION OF MIND BY THE ASSESSING OFFICER IS NO DEFENCE INASMUCH AS THE HON'BLE SUPREME COURT HAS APPROVED THE FACTUM OF NON - STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE AS REFLECTIVE OF NON - APPLICATION OF MIND BY THE ASSESSING OFFIC ER. SINCE THE FACTUAL MATRIX IN THE PRESENT CASE CONFORMS TO THE PROPOSITION LAID DOWN BY THE HON'BLE SUPREME COURT, WE PROCEED TO REJECT THE ARGUMENTS ADVANCED BY THE LD. CIT - DR BASED ON THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. F URTHER, IT IS ALSO NOTICEABLE THAT SUCH PROPOSITION HAS BEEN CONSIDERED BY THE HON'BLE BOMBAY HIGH COURT ALSO IN THE CASE OF SHRI SAMSON PERINCHERY, ITA NOS. ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 18 1154, 953, 1097 & 1126 OF 2014 DATED 5.1.2017 (SUPRA) AND THE DECISION OF THE TRIBUNAL HOLDING LEV Y OF PENALTY IN SUCH CIRCUMSTANCES BEING BAD, HAS BEEN APPROVED. 11. APART FROM THE AFORESAID, THE LD. CIT - DR MADE AN ARGUMENT BASED ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALYA & OTHERS, 216 ITR 660 (BOM.) TO CANVASS SUPP ORT FOR HIS PLEA THAT NON - STRIKING OFF OF THE IRRELEVANT PORTION OF NOTICE WOULD NOT INVALIDATE THE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. WE HAVE CAREFULLY SHRI DHANVINDER BINDRA CONSIDERED THE SAID ARGUMENT SET - UP BY THE LD. CIT - DR AND FIND THAT A SIMILAR ISSUE HAD COME UP BEFORE OUR COORDINATE BENCH IN THE CASE OF DR. SARITA MILIND DAVARE (SUPRA). OUR COORDINATE BENCH, AFTER CONSIDERING THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALYA & ORS., (SUPRA) AS ALSO THE JUDGME NTS OF THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) AND DHARMENDRA TEXTILE PROCESSORS, 306 ITR 277 (SC) DEDUCED AS UNDER : - '12. A COMBINED READING OF THE DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. B KAUSHALYA AN D OTHERS (SUPRA) AND THE DECISION RENDERED BY HON'BLE SUPREME COURT IN THE CASE OF DILIP N SHROFF (SUPRA) WOULD MAKE IT CLEAR THAT THERE SHOULD BE APPLICATION OF MIND ON THE PART OF THE AO AT THE TIME OF ISSUING NOTICE. IN THE CASE OF LAKHDIR LALJI (SUPRA) , THE AO ISSUED NOTICE U/S 274 FOR CONCEALMENT OF PARTICULARS OF INCOME BUT LEVIED PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE HON'BLE GUJARAT HIGH COURT QUASHED THE PENALTY SINCE THE BASIS FOR THE PENALTY PROCEEDINGS DISAPPEARED WHEN IT W AS HELD THAT THERE WAS NO SUPPRESSION OF INCOME. THE HON'BLE KERALA HIGH COURT HAS STRUCK DOWN THE PENALTY IMPOSED IN THE CASE OF N.N.SUBRAMANIA IYER VS. UNION OF INDIA (SUPRA), WHEN THERE IS NO INDICATION IN THE NOTICE FOR WHAT CONTRAVENTION THE PETITIONE R WAS CALLED UPON TO SHOW CAUSE WHY A PENALTY SHOULD NOT BE IMPOSED. IN THE INSTANT CASE, THE AO DID NOT SPECIFY THE CHARGE FOR WHICH PENALTY PROCEEDINGS WERE INITIATED AND FURTHER HE HAS ISSUED A NOTICE MEANT FOR CALLING THE ASSESSEE TO FURNISH THE RETURN OF INCOME. HENCE, IN THE INSTANT CASE, THE ASSESSING OFFICER DID NOT SPECIFY THE CHARGE FOR WHICH THE PENALTY PROCEEDINGS WERE INITIATED AND ALSO ISSUED AN INCORRECT NOTICE. ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 19 BOTH THE ACTS OF THE AO, IN OUR VIEW, CLEARLY SHOW THAT THE AO DID NOT APPLY HIS MIND WHEN HE ISSUED NOTICE TO THE ASSESSEE AND HE WAS NOT SURE AS TO WHAT PURPOSE THE NOTICE WAS ISSUED. THE HON'BLE BOMBAY HIGH COURT HAS DISCUSSED ABOUT NON - APPLICATION OF MIND IN THE CASE OF KAUSHALYA (SUPRA) AND OBSERVED AS UNDER: - '....THE NOTICE CLE ARLY DEMONSTRATED NON - APPLICATION OF MIND ON THE PART OF THE INSPECTING ASSISTANT COMMISSIONER. THE VAGUENESS AND AMBIGUITY IN THE NOTICE HAD ALSO PREJUDICED THE RIGHT OF REASONABLE OPPORTUNITY OF THE ASSESSEE SINCE HE DID NOT KNOW WHAT EXACT CHARGE HE HAD TO FACE. IN THIS BACK GROUND, QUASHING OF THE PENALTY PROCEEDINGS FOR THE ASSESSMENT YEAR 1967 - 68 SEEMS TO BE FULLY JUSTIFIED.' IN THE INSTANT CASE ALSO, WE ARE OF THE VIEW THAT THE AO HAS ISSUED A NOTICE, THAT TOO INCORRECT ONE, IN A ROUTINE MANNER. FURT HER THE NOTICE DID NOT SPECIFY THE CHARGE FOR WHICH THE PENALTY NOTICE WAS ISSUED. HENCE, IN OUR VIEW, THE AO HAS SHRI DHANVINDER BINDRA FAILED TO APPLY HIS MIND AT THE TIME OF ISSUING PENALTY NOTICE TO THE ASSESSEE.' 12. THE AFORESAID DISCUSSION CLEARLY B RINGS OUT AS TO THE REASONS WHY THE PARITY OF REASONING LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) IS TO PREVAIL. FOLLOWING THE DECISION OF OUR COORDINATE BENCH IN THE CASE OF DR. SARITA MILIND DAVARE (SUPRA), WE HEREBY R EJECT THE AFORESAID ARGUMENT OF THE LD. CIT - DR. 13. APART FROM THE AFORESAID DISCUSSION, WE MAY ALSO REFER TO THE ONE MORE SEMINAL FEATURE OF THIS CASE WHICH WOULD DEMONSTRATE THE IMPORTANCE OF NON - STRIKING OFF OF IRRELEVANT CLAUSE IN THE NOTICE BY THE ASS ESSING OFFICER. AS NOTED EARLIER, IN THE ASSESSMENT ORDER DATED 10.12.2010 THE ASSESSING OFFICER RECORDS THAT THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ARE TO BE INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. HOWEVER, IN THE NOTICE IS SUED U/S 274 R.W.S. 271(1)(C) OF THE ACT OF EVEN DATE, BOTH THE LIMBS OF SEC. 271(1)(C) OF THE ACT ARE REPRODUCED IN THE PROFORMA NOTICE AND THE IRRELEVANT CLAUSE HAS NOT BEEN STRUCK - OFF. QUITE CLEARLY, THE OBSERVATION OF THE ASSESSING OFFICER IN THE ASSES SMENT ORDER AND NON - STRIKING OFF ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 20 OF THE IRRELEVANT CLAUSE IN THE NOTICE CLEARLY BRINGS OUT THE DIFFIDENCE ON THE PART OF ASSESSING OFFICER AND THERE IS NO CLEAR AND CRYSTALLISED CHARGE BEING CONVEYED TO THE ASSESSEE U/S 271(1)(C), WHICH HAS TO BE MET BY HI M. AS NOTED BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA), THE QUASI - CRIMINAL PROCEEDINGS U/S 271(1)(C) OF THE ACT OUGHT TO COMPLY WITH THE PRINCIPLES OF NATURAL JUSTICE, AND IN THE PRESENT CASE, CONSIDERING THE OBSERVATIONS OF THE A SSESSING OFFICER IN THE ASSESSMENT ORDER ALONGSIDE HIS ACTION OF NON - STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE SHOWS THAT THE CHARGE BEING MADE AGAINST THE ASSESSEE QUA SEC. 271(1)(C) OF THE ACT IS NOT FIRM AND, THEREFORE, THE PROCEEDINGS SUFFER FROM NON - COMPLIANCE WITH PRINCIPLES OF NATURAL JUSTICE INASMUCH AS THE ASSESSING OFFICER IS HIMSELF UNSURE AND ASSESSEE IS NOT MADE AWARE AS TO WHICH OF THE TWO LIMBS OF SEC. 271(1)(C) OF THE ACT HE HAS TO RESPOND. 14. THEREFORE, IN VIEW OF THE AFORESAID D ISCUSSION, IN OUR VIEW, THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 10.12.2010 IS UNTENABLE AS IT SUFFERS FROM THE VICE OF NON - APPLICATION OF MIND HAVING REGARD TO THE RATIO OF THE JUDGMENT OF THE HON'BLE SUPREME CO URT IN THE CASE OF DILIP N. SHROFF (SUPRA) AS WELL AS THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHRI SAMSON PERINCHERY (SUPRA). THUS, ON THIS COUNT ITSELF THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT IS LIABLE TO BE DELETED. WE HOLD SO. SINCE THE SHRI DHANVINDER BINDRA PENALTY HAS BEEN DELETED ON THE PRELIMINARY POINT, THE OTHER ARGUMENTS RAISED BY THE APPELLANT ARE NOT BEING DEALT WITH.' THEREFORE, IN VIEW OF THE AFORESAID DISCUSSION, IN OUR VIEW, THE NOTICE ISSUED BY THE ASSESSING OFFIC ER U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 22.12.2008 IS UNTENABLE AND SUFFERS FROM THE INFIRMITY OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. ON THIS COUNT ITSELF, IN OUR VIEW, THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT DESERVES TO BE DELETED . 13. AT THIS POINT, WE MAY ALSO MAKE A REFERENCE TO THE JUDGMENT OF THE HON'BLE PATNA HIGH COURT RELIED BY THE LD. CIT - DR BEFORE US. THE ISSUE BEFORE THE HON'BLE PATNA HIGH COURT WAS RELATING TO LEVY OF PENALTY FOR SHORTFALL IN THE PAYMENT OF ADVANCE TAX PAID AS COMPARED WITH THE TAX FINALLY ASSESSED AS PAYABLE, BUT IN ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 21 THE NOTICE ISSUED U/S 274 R.W.S. 273(B) OF THE ACT IT WAS INCORRECTLY MENTIONED THAT ASSESSEE HAD FAILED TO FILE ITS ESTIMATE OF ADVANCE TAX. THE HON'BLE PATNA HIGH COURT HELD THAT MENTION O F SUCH INCORRECT CHARGE WOULD NOT RENDER THE PENALTY PROCEEDINGS VOID - AB - INITIO. THE AFORESAID PARITY OF REASONING HAS BEEN RELIED UPON BY THE LD. CIT - DR BEFORE US TO STATE THAT NON - STRIKING OFF OF THE IRRELEVANT PORTION OF THE NOTICE U/S 274 R.W.S. 271(1) (C) OF THE ACT DOES NOT RENDER THE PROCEEDINGS INVALID. IN OUR VIEW, THE SAID DECISION DOES NOT HELP THE CASE OF THE REVENUE QUA THE ISSUE BEFORE US. FIRSTLY, THE HON'BLE PATNA HIGH COURT ITSELF NOTED THAT IT WAS A CASE OF MERE 'WRONG LABELLING OF THE SECT ION OR SOME MISTAKE IN THE CHARGE FRAMED AGAINST THE ASSESSEE' WHICH DOES NOT PREJUDICE THE ASSESSEE. SECONDLY, NON - STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT HAS BEEN COMPLETELY DIFFERENTLY UNDERSTOOD BY THE VA RIOUS HIGH COURTS, INCLUDING THAT BY THE HON'BLE JURISDICTIONAL HIGH COURT OF BOMBAY. IN THE CASE OF SHRI SAMSON PERINCHERY (SUPRA), THE HON'BLE BOMBAY HIGH COURT NOTED THAT THE ORDER IMPOSING PENALTY U/S 271(1)(C) OF THE ACT HAS TO BE MADE ONLY ON THE GRO UND ON WHICH THE PENALTY PROCEEDINGS HAVE BEEN INITIATED. IN THE CASE OF SHRI SAMSON PERINCHERY (SUPRA), THE REVENUE HAD PUT UP AN ARGUMENT TO THE EFFECT THAT THERE IS NO DIFFERENCE BETWEEN FURNISHING OF INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. THE AFORESAID ARGUMENT HAS BEEN SPECIFICALLY REJECTED BY THE HON'BLE HIGH COURT BY REFERRING TO THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF T. ASHOK PAI, 292 ITR 11 (SC). IT WAS FURTHER NOTED THAT THE JUDGMENT IN THE CASE OF T. ASHOK P AI (SUPRA) HAS BEEN RELIED UPON BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY & ORS., 359 ITR 565 (KARN.). THE HON'BLE HIGH COURT APPROVED THE PROPOSITION THAT ONCE THE TWO LIMBS CONTAINED IN THE NOTICE U/S 274 R. W.S. 271(1)(C) OF THE ACT, NAMELY CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME ARE UNDERSTOOD TO BE CARRYING DIFFERENT MEANINGS/CONNOTATIONS, NON - STRIKING OFF OF THE IRRELEVANT CLAUSE OR STRIKING OFF ONE OF THE LIMBS AND IMPOSIN G PENALTY ON THE OTHER LIMB IS NOT AS PER LAW. THIRDLY, IT MAY BE NOTED THAT THE ISSUE BEFORE THE SHRI DHANVINDER BINDRA HON'BLE HIGH COURT WAS INCORRECT MENTIONING OF CHARGE IN THE SHOW CAUSE NOTICE, BUT THE CASE BEFORE US IS OF NON - MENTIONING OF THE CHAR GE AT ALL. ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 22 THEREFORE, FOR ALL THE ABOVE REASONS, NON - STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT CANNOT BE SAID TO BE A MERE WRONG LABELLING OF THE SECTION OR SOME MISTAKE OF THE NATURE THAT WAS BEFORE THE HON'BLE PATNA HIGH COURT IN THE CASE OF MITHILA MOTORS (P.) LIMITED (SUPRA). THEREFORE, THE JUDGMENT OF THE HON'BLE PATNA HIGH COURT DOES NOT HELP THE CASE OF THE REVENUE BEFORE US. 14. THE OTHER PLEA OF THE LD. CIT - DR BEFORE US WAS THAT THERE WAS NO AMBI GUITY INASMUCH AS THE ASSESSING OFFICER HAD MADE AWARE THE ASSESSEE ABOUT THE CHARGE BEING MADE AGAINST HIM, NAMELY CONCEALMENT OF INCOME, BY REFERRING TO THE ASSESSMENT ORDER AND ALSO THE REPLY OF THE ASSESSEE FILED AT THE TIME OF PENALTY PROCEEDINGS. IN OUR CONSIDERED OPINION, IF ONE WERE TO EXAMINE THE ENTIRE CONSPECTUS OF FACT - SITUATION STARTING FROM THE ASSESSMENT ORDER UPTO THE PASSING OF PENALTY ORDER, THE ERROR IN THE ARGUMENT SET - UP BY THE LD. CIT - DR WOULD BE CLEAR. IN THE ASSESSMENT ORDER DATED 22 .12.2008, THE ASSESSING OFFICER RECORDS THAT THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ARE INITIATED FOR CONCEALMENT OF INCOME WHILE IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT OF EVEN DATE, BOTH THE LIMBS OF SEC. 271(1)(C) OF THE ACT A RE LEFT INTACT IN THE STANDARD PRINTED NOTICE, AS THE IRRELEVANT CLAUSE HAS NOT BEEN STRUCK - OFF. THIS CONTRADICTION IN THE ASSESSMENT ORDER VIS - A - VIS THE PENALTY NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT ON THE SAME DATE CLEARLY BRINGS OUT A CONFUS ION ON THE PART OF THE ASSESSING OFFICER, AND APPARENTLY IT IS A SITUATION WHERE ASSESSEE IS NOT AWARE ABOUT THE CLEAR AND CRYSTALLISED CHARGE BEING MADE AGAINST HIM, THUS VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. THE PENALTY PROCEEDINGS BEING QUASI - CR IMINAL IN NATURE, AS NOTED BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA), THE SAME ARE NECESSARILY REQUIRED TO BE IN COMPLIANCE WITH THE PRINCIPLES OF NATURAL JUSTICE. IN THIS VIEW OF THE MATTER, IN OUR VIEW, THE LD. CIT - DR IS NOT COR RECT IN CONTENDING THAT NON - STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT IS NOT MATERIAL, AND THAT THE ASSESSEE HAD UNDERSTOOD THAT THE PROCEEDINGS WERE INITIATED FOR CONCEALMENT OF INCOME BASED ON THE OBSE RVATIONS IN THE ASSESSMENT ORDER ITSELF. BEFORE PARTING, WE MAY ALSO REFER TO A RECENT JUDGMENT OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF S. CHANDRASHEKAR, 396 ITR 538 (KARN.) WHEREIN A NOTICE ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 23 ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT IN PRINTED FORM WITHOUT SPECIFYING THE GROUNDS OF INITIATION OF PENALTY PROCEEDINGS WAS HELD TO BE INVALID AND UNTENABLE IN LAW. AS PER THE HON'BLE HIGH COURT, IN THE ABSENCE OF ANY SPECIFIC GROUND IN THE NOTICE SO ISSUED, THERE IS A BREACH OF PRINCIPLES OF NATURAL J USTICE AND ACCORDINGLY, THE ORDER IMPOSING PENALTY CANNOT BE SUSTAINED.' 19. THE SAID DECISION OF THE 'C' BENCH AS WELL AS THE JUDGEMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SAMSON PERINCHERY (SUPRA) ARE SHRI DHANVINDER BINDRA EQUALLY APPLICABLE IN THE CASE OF THE ASSESSEE, AS IN THE CASE OF THE ASSESSEE WE NOTED THAT THE AO WHILE INITIATING PENALTY PROCEEDINGS DURING THE COURSE OF ASSESSMENT DOES NOT SPECIFY ANY PARTICULAR GROUND FOR INITIATING PENALTY PROCEEDINGS. EVEN WHILE ISSUING NOTICE ALSO HE DID NOT SPECIFY FOR WHICH CHARGE THE ASSESSEE IS TO BE PENALISED AS BOTH THE CHARGES, CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME ARE DIFFERENT ALTHOUGH THE CONSEQUENCE OF BOTH THE CHARGES MAY BE CONCEALED INC OME. EVEN THE HON'BLE SUPREME COURT IN THE CASES OF DILLIP N. SHROF VS. JCIT 291 ITR 519 AND T. ASHOK PAI 292 ITR 11 HAS ALSO APPRECIATED THAT THESE TWO EXPRESSIONS CONVEY TWO DIFFERENT CONNOTATIONS. WHEN THE HON'BLE SUPREME COURT HAS CATEGORICALLY STATED IN THESE DECISIONS THAT BOTH THE CONNOTATIONS HAS DIFFERENT MEANINGS. PERHAPS THE 'I' BENCH IN THE CASE OF MAHESH M. GANDHI VS. ACIT WHILE CONFIRMING THE PENALTY, ON WHICH THE LEARNED D.R. HAS VEHEMENTL Y RELIED, HAS NOT APPRECIATED THESE DECISIONS OF THE HON'BLE SUPREME COURT. EVEN WE NOTED THAT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) THE HON'BLE KARNATAKA HIGH COURT HAS ALSO REFEREED TO BOTH THESE DECISIONS OF THE HON'BLE SUPREME CO URT UNDER PARA 61 AS WELL AS THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MANU ENGINEERS (SUPRA) AND THAT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF VS. VIRGO MARKETING PVT. LTD. 171 TAXMAN 156 HAS CLEARLY HELD THAT LEVY OF PEN ALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND IF THE POSITION IS UNCLEAR THE PENALTY CANNOT BE SUSTAINED. IN VIEW OF THE DECISIONS OF VARIOUS HIGH COURTS AND OF THE HON'BLE SUPREME COURT IN OUR VIEW THE DECISION OF THE 'I' BENCH IN THE CAS E OF MAHESH M. GANDHI IN ITA NO. 2976/MUM/2016 DOES NOT HAVE ANY LEG TO APPLY IN THE ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 24 CASE OF THE ASSESSEE. IT IS ALSO NOT A CASE WHERE BOTH THE MUMBAI BENCHES HAVE TAKEN DIFFERENT VIEW SO THAT THE MATTER MAY BE REFERRED TO SPECIAL BENCH BUT IT IS A CASE WH ERE THE ISSUE INVOLVED IS DULY COVERED, IN OUR OPINION, BY THE DECISIONS OF THE HON'BLE SUPREME COURT, HON'BLE JURISDICTIONAL HIGH COURT, HON'BLE KARNATAKA HIGH COURT AND HON'BLE GUJARAT HIGH COURT. THEREFORE THE ORDER PASSED BY THE 'I' BENCH IN THE CASE O F MAHESH M. GANDHI (SUPRA) WILL NOT HAVE ANY BINDING PRECEDENCE ON US. WE, THEREFORE, SHRI DHANVINDER BINDRA CONFIRM THE ORDER OF THE CIT(A) DELETING THE PENALTY IMPOSED ON THE ASSESSEE IN EACH OF THE CASE. 5 . ON APPRAISAL OF THE ABOVE MENTIONED ORDER, UN DOU BTEDLY, THE FACTUAL SITUATION IN THE PRESENT CASE IS ALSO THE SAME. THE ISSUE ON MERITS AS WELL AS ON LEGAL IN CONNECTION WITH THE ISSUANCE OF NOTICE HAVE ALSO BEEN DISCUSSED AND DECIDED ABOVE. THE FINDING OF THE SAID CASE IS QUITE APPLICABLE TO BE PRES ENT CASE AS MUTATIS AND MUTANDIS. THERE IS NO NEED TO REPEAT THE SAME, THEREFORE, IN THE SAID CIRCUMSTANCES, BY FOLLOWING THE ORDER OF THE HONBLE ITAT (SUPRA) IN THE CASE OF DHANVINDER SINGH BINDRA, WE DISMISSED THE APPEAL S OF THE REVENUE AND ALLOWED THE CROSS - OBJECTION S OF THE ASSESSEE . THE CIT(A) HAS CONFIRMED THE PENALTY UPON THE AMOUNT TO THE TUNE OF RS.130731/ - IN THE A.Y. 2002 - 03 ON THE BASIS OF MERITS BUT THE MATTER OF CONTROVERSY HAS NOT BEEN ADJUDICATED ON THE BASIS OF THE LEGAL ISSUES I.E. ON AC COUNT OF VALIDITY OF THE NOTICE TO LEVY THE PENALTY. SINCE WE HAVE FOLLOWED THE FINDING OF THE HONBLE ITAT IN CASE OF IN ITA. NO. 5694 TO 5699/M/2015 FOR THE A.YS. 2002 - 03 TO 2007 - 08 ORDER DATED 01.11.2017, THEREFORE, WE ALLOWED THE CROSS - OBJECTION OF TH E ASSESSEE IN CO NO. 251/M/2017 AND ALSO DELETE THE PENALTY. ITA. NO S . 1178 TO 1184/MUM/2016 CO. NOS. 250 TO256/MUM/2017 A.YS. 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06 , 2006 - 07, 2008 - 09 & 2007 - 08 25 6 . IN THE RESULT, THE APPEALS OF THE REVENUE ARE HEREBY DISMISSED AND CROSS - OBJECTION S FILED BY THE ASSESSEE ARE HEREBY ORDERED TO BE ALLOWED . ORDER PRONOUNCE D IN THE OPEN COURT ON 24. 09 . 2018 . SD/ - SD/ - ( R. C. SHARMA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBA I DATED : 24. 09 . 201 8 VIJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI