Dilip D. Jain, Pune V. Assistant Commissioner of Income-tax,

ITA 1209/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0364 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 03-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Invalid notice; Search and seizure; Document seized; Opportunity of being heard; Principle of natural justice; Initiation of penalty proceedings; Bogus loan; Documents seized; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 153A; 274; 13

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.1206 TO 1209/PN/2014 '% % / ASSESSMENT YEARS : 2003-04 TO 2006-07 SHRI DILIP D. JAIN, KANHAIYALAL D. JAIN, C/O. CHHORIYA GROUP, IST FLOOR, KOTHARI PLAZA, BIBWEWADI-KONDHWA ROAD, GERA JUNCTION, LULLANAGAR, PUNE 411 040 PAN : AAQPJ5449Q . / APPELLANT V/S ACIT, CENTRAL CIRCLE - 3, NASHIK . /RESPONDENT / APPELLANT BY : SHRI SUNIL PATHAK, SHRI NIKHIL PATHAK & SHRI DEEPAK SHARMA / RESPONDENT BY : SHRI RAJEEV KUMAR & SHRI S.K. RASTOGI / ORDER PER VIKAS AWASTHY, JM : THESE FOUR APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-I, NASHIK DA TED 16-04-2014 COMMON FOR A.YRS. 2003-04 TO 2006-07. 2. IN APPEALS THE ASSESSEE HAS ASSAILED THE LEVY OF PE NALTY U/S.271(1)(C), AS WELL AS ENHANCING OF PENALTY BY CIT(A). SINC E PENALTY PROCEEDINGS IN THE IMPUGNED ASSESSMENT YEARS OR IGINATE / DATE OF HEARING :06.12.2016 / DATE OF PRONOUNCEMENT: 14.12.2016 2 ITA NOS.1206 TO 1209/PN/2014 FROM SAME SET OF FACTS, THESE APPEALS ARE TAKENUP TOGET HER FOR ADJUDICATION AND ARE DECIDED BY THIS SINGLE ORDER. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE REC ORDS ARE : A SEARCH AND SEIZURE ACTION U/S.132 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS CARRIED OUT IN THE CASE OF CHHORIYA GROUP ON 22-08-2008. AS A RESULT OF SEARCH AND SEIZURE OPERATION, SOME INCRIMINATING DOCUMENTS WERE FOUND AND SEIZ ED RELATING TO TRANSACTION OF PURCHASE AND SALE OF PLOTS, SH OPS ETC. IN RESPONSE TO NOTICE U/S.153A THE ASSESSEE OFFERED ADDITION AL INCOME FOR THE ASSESSMENT YEARS UNDER APPEAL AS UNDER : ASSESSMENT YEAR ADDITIONAL INCOME OFFERED 2003 - 04 37,67,093/ - 2004 - 05 63,51,819/ - 2005 - 06 13,98,765/ - 2006 - 07 22,83,871/ - 3.1 THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT READ WITH EXPLANATION 5A FOR CONCEALIN G PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS O F INCOME. THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY U/S.271(1)(C) FOR IMPUGNED ASSESSMENT YEARS VIDE SEPARATE ORDERS OF EVEN DATE 24-06-2011 FOR CONCEALING THE PARTICULARS OF INC OME. THE PENALTY LEVIED FOR THE DIFFERENT ASSESSMENT YEARS IS AS UNDER : ASSESSMENT YEAR ADDITIONAL INCOME OFFERED 2003 - 04 11,97,660/ - 2004 - 05 21,04,100/ - 2005 - 06 4,92,620/ - 2006 - 07 7,68,950/ - 3.2 AGGRIEVED BY THE ORDERS LEVYING PENALTY FOR THE RESPE CTIVE ASSESSMENT YEARS, THE ASSESSEE FILED APPEALS BEFORE THE C IT(A). THE CIT(A) VIDE IMPUGNED ORDER COMMON FOR ALL THE ASSESSMENT YEARS NOT 3 ITA NOS.1206 TO 1209/PN/2014 ONLY CONFIRMED THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT B UT ALSO ENHANCED THE PENALTY FROM 100% TO 150%. AGAINST THE ORDER OF CIT(A) NOW THE ASSESSEE IS IN SECON D APPEAL BEFORE THE TRIBUNAL. 4. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL IN A. Y. 2003-04 : 1] THE LEARNED CIT(A) ERRED IN DIRECTING LEVY OF PENA LTY U/S 271(1)(C) @ 150% OF THE TAX SOUGHT TO BE EVADED ON T HE GROUND THAT THE APPELLANT HAD CONCEALED ITS INCOME AND ALSO MISREPRESENTED THE FACTS OF THE CASE. 2] THE LEARNED CIT(A) ERRED IN ENHANCING THE PENA LTY LEVIED FROM 100% TO 150% WITHOUT APPRECIATING THAT ON THE FACTS OF THE CASE AND IN LAW, HE HAD NO POWER TO ENHANCE THE PENALTY LEVIED BY THE A.O. AND ACCORDINGLY, THE ENHANCEMENT MADE BY THE L EARNED CIT(A) IS NOT JUSTIFIED AT ALL. 3] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE A DDITIONAL INCOME DECLARED BY THE ASSESSEE GROUP IN THE COURSE OF SEARCH IN RESPECT OF ON MONEY ON SALE OF PLOTS WAS NOT CORRECT AND THE SEIZED PAPERS INDICATED UNACCOUNTED LOANS RECEIVED BY THE AS SESSEE AND ACCORDINGLY, THE ASSESSEE HAD MISREPRESENTED THE FAC TS AND THEREFORE, THE LEVY OF PENALTY WAS JUSTIFIED IN LAW. 4] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT T HE ADDITIONAL INCOME DECLARED BY THE GROUP OF RS.13.99 CRS. WAS TO B UY PEACE AND TO COOPERATE WITH THE DEPT. AND THERE WAS NO EVI DENCE THAT THE ASSESSEE HAD ACTUALLY EARNED THAT INCOME AND ACCORD INGLY, THE PENALTY LEVIED BY THE A.O. WAS NOT JUSTIFIED AT A LL. 5] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED T HAT IF ITS CONTENTION IS ACCEPTED AND THE NOTINGS ON THE SEIZE PA PERS INDICATE UNACCOUNTED LOANS RECEIVED BY THE ASSESSEE, IN THAT EVENT, THERE IS NO QUESTION OF TAXING SUCH AMOUNTS IN THE HANDS OF THE ASSESSEE AND CONSEQUENTLY, THE PENALTY LEVIED SHOU LD BE DELETED. 6] WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE ASSESSE E SUBMITS THAT IN CASE, PENALTY IS LEVIABLE, THE SAME SHOULD NOT BE LEVIED ON THE ENTIRE ADDITIONAL INCOME DECLARED BY THE ASSESSEE B UT ONLY ON REASONABLE NET PROFIT PERCENTAGE TO BE ADOPTED ON THE ON MONEY RECEIVED BY THE ASSESSEE. 7] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSE SSEE HAD MISREPRESENTED THE FACTS WITHOUT APPRECIATING THAT IF HIS CONTENTION IS ACCEPTED, NO INCOME IS TAXABLE IN THE HANDS OF THE ASSESSEE AND THEREFORE, THE QUESTION OF LEVY OF PENALTY SIMPLY DOES NOT ARISE. 4 ITA NOS.1206 TO 1209/PN/2014 8] THE LEARNED CIT(A) HAS ERRED IN PASSING THE ORDER WITHOUT CONSIDERING THE CORRECT FACTS OF THE CASE. 9] THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. THE ASSESSEE HAS ALSO CHALLENGED THE IMPUGNED ORDER BY RAISING AN ADDITIONAL GROUND OF APPEAL, THE SAME READS AS UNDER : 1] THE ASSESSEE SUBMITS THAT THE PENALTY ORDER PASSED U/S. 271(1)(C) WAS NULL AND VOID SINCE THE NOTICE ISSUED BY THE LD. A.O. WAS BAD IN LAW. SIMILAR, GROUNDS OF APPEAL/ADDITIONAL GROUND OF APPEAL HAVE BEEN RAISED BY THE ASSESSEE IN OTHER ASSESSMENT YEARS CHALLENGING THE LEVY OF PENALTY ON MERITS, AS WELL AS CHALLENGING VALIDIT Y OF NOTICE. 5. SHRI SUNIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE COORDINATE BENCH OF T HE TRIBUNAL IN THE CASE OF KANHAIYALAL D. JAIN VS. ACIT IN ITA NOS. 1201 TO 1205/PN/2014 FOR A.YRS. 2003-04 TO 2007-08 DECIDED ON 3 0-11- 2016 HAS DELETED THE LEVY OF PENALTY ON ACCOUNT OF INVALID NOTICE ISSUED U/S.274 R.W.S. 271(1)(C) OF THE ACT, AS ALSO ON MERITS. THE LD. AUTHORISED REPRESENTATIVE PLACED ON RECORD COPY OF THE ORDER OF COORDINATE BENCH IN THE CASE OF KANHAIYALAL D. JAIN (SUPRA ). THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT PENALTY PRO CEEDINGS IN THE CASE OF PRESENT ASSESSEE AND KANHAIYALAL D. JAIN ARE OUTCOME OF ASSESSMENT PROCEEDINGS RESULTING FROM SEARCH AND SEIZURE ACTION IN THE CASE OF CHHORIYA GROUP. 6. THE LD. AUTHORISED REPRESENTATIVE FURTHER CONTENDED THAT A PERUSAL OF NOTICE ISSUED U/S.274 R.W.S. 271(1)(C) AT PAGES 197 TO 204 OF THE PAPER BOOK WOULD SHOW THAT THE NOTICES ARE AMBIG UOUS. 5 ITA NOS.1206 TO 1209/PN/2014 IRRELEVANT CONTENTS OF THE NOTICES HAVE NOT BEEN STRUC K OFF AND IT IS NOT CLEAR WHETHER THE PENALTY PROCEEDINGS ARE INITIATED FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD. AUTHORISED REPRESENTATIVE P OINTED THAT THE ASSESSING OFFICER AT THE TIME OF PASSING OF THE AS SESSMENT ORDER HAS MENTIONED THAT PENALTY PROCEEDINGS ARE INITIATE D U/S.271(1)(C) READ WITH EXPLANATION 5A FOR CONCEALING OF PARTICU LARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. HOWEVER, WHILE PASSING THE PENALTY ORDER, THE PENALTY HAS BEEN LEVIED ONLY FOR CONCEALING PARTICULARS OF INCOME. THE ASSESS ING OFFICER WAS NOT CLEAR AT THE TIME OF INITIATING PENALTY AS TO UNDER WHAT CHARGE PENALTY IS TO BE LEVIED. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE FACTS OF THE CASE OF T HE ASSESSEE ARE IDENTICAL TO THE FACTS IN THE CASE OF KANHAIYALAL D. JAIN (SUPRA). SINCE THE COORDINATE BENCH OF THE TRIBUNAL HAS SET ASIDE THE LEVY OF PENALTY IN THE APPEALS BY THE KANHAIYALAL D. JAIN (SUPRA), T HE APPEALS OF THE ASSESSEE BEING ON SAME FOOTING MAY BE ALLOWED. 7. ON THE OTHER HAND SHRI HITENDRA NINAWE REPRESENTING T HE DEPARTMENT VEHEMENTLY DEFENDED THE ORDER OF THE CIT(A) IN NOT ONLY CONFIRMING THE LEVY OF PENALTY U/S.271(1)(C) BUT ENHANCING THE PENALTY FROM 100% TO 150%. HOWEVER, THE LD. DEPARTMENT AL REPRESENTATIVE FAIRLY ADMITTED THAT THE FACTS IN THE CASE OF ASSESSEE ARE SIMILAR TO THE CASE OF KANHAIYALAL D. JAIN. 8. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHOR ITIES BELOW. PENALTY U/S.271(1)(C) READ WITH EXPLANATION 5A IS LEVIED IN THE CASE OF ASSESSEE IN PURSUANCE TO THE RETURNS FILED U/S.153A OF THE ACT. A 6 ITA NOS.1206 TO 1209/PN/2014 SURVEY AND SEIZURE ACTION WAS CARRIED OUT IN THE CASE O F CHHORIYA GROUP ON 22-08-2008. CERTAIN INCRIMINATING DOCUMENTS WER E FOUND AND SEIZED DURING SEARCH OPERATION. STATEMENT OF SHRI KA NHAIYALAL D. JAIN WAS RECORDED ON OATH ON 16-10-2008, WHEREIN HE H AD ADMITTED THAT ASSESSEE HAS RECEIVED ON-MONEY ON SALE O F PLOTS AND SHOPS WHICH WERE NOT DISCLOSED IN THE ORIGINAL RETURN OF INC OME. WE OBSERVE THAT SHRI KANHAIYALAL D. JAIN AND THE ASSESSEE AR E PART OF SAME CHHORIYA GROUP AND THE PENALTY PROCEEDINGS HAVE BEEN INITIATED ON SAME SET OF FACTS IN CASE OF BOTH THE ASSESSE ES. THE GROUNDS OF APPEAL AND THE ADDITIONAL GROUND OF APPEAL RAISE D IN THE CASE OF SHRI KANHAIYALAL D. JAIN (SUPRA) ARE IDENTICAL TO THE GROUNDS RAISED BY THE ASSESSEE IN THE PRESENT SET OF APPEALS AS SAILING THE ORDER OF CIT(A). THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI KANHAIYALAL D. JAIN VS. ACIT (SUPRA) HAS DELETED THE LEV Y OF PENALTY BY OBSERVING AS UNDER : 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT BUNCH OF APPEALS IS JURI SDICTIONAL ISSUE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE AC T. THE REQUIREMENT OF SECTION IS THAT WHERE THE ASSESSING OFFICER OR THE COM MISSIONER OF APPEALS OR THE PRINCIPAL COMMISSIONER OR COMMISSIONER, I N THE COURSE OF ANY PROCEEDINGS UNDER THE ACT, IS SATISFIED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED I NACCURATE PARTICULARS OF SUCH INCOME, THEN HE MAY DIRECT THAT SU CH PERSON SHALL PAY BY WAY OF PENALTY THE AMOUNTS AS SPECIFIED IN SUB- CLAUSE (III) WHICH WOULD BE IN ADDITION TO TAX, IF ANY, PAYABLE BY THE SAID PERSON. THE SECTION THUS REQUIRES THE CONCERNED OFFICER TO RECORD SATISFACTION IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT, THAT THE PER SON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF HIS INCOME. AFTER RECORDING THE SATISFACTION, DURING THE COURSE OF PENALTY PROCEEDINGS ALSO, THE CONCERNED OFFICER HAS COME TO A FINDING THAT AS TO WHETHER THE PERSON HAS CONCEALED THE PARTICULARS OF HI S INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME AND T HEREAFTER, LEVY THE PENALTY ACCORDINGLY. THE WORD USED BETWEEN THE TWO ACTS I.E. CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING O F INACCURATE PARTICULARS OF SUCH INCOME IS OR. SO THE PENALTY LE VIED BY THE CONCERNED OFFICER IS ON SATISFACTION OF ANY OF THE LIM BS AND NOT THE SATISFACTION OF BOTH THE LIMBS. WHERE THE ASSESSEE HAD C ONCEALED THE PARTICULARS OF INCOME IN PARTICULAR CIRCUMSTANCES, THE N THE ASSESSING OFFICER MAY RECORD SATISFACTION TO THAT EFFECT AND I NITIATE PENALTY PROCEEDINGS AND THEREAFTER ON FIXATION OF CHARGE, LE VY THE PENALTY FOR 7 ITA NOS.1206 TO 1209/PN/2014 SUCH ACT OF CONCEALING THE PARTICULARS OF INCOME. SI MILARLY, IN CASES WHERE THE ASSESSEE CONCERNED HAD FURNISHED INACCURATE PA RTICULARS OF SUCH INCOME, THEN SIMILAR EXERCISE HAS TO BE CARRIED OU T BY THE CONCERNED OFFICER. 14. THE FIRST STAGE OF INVOCATION OF PROVISIONS OF SECT ION 271(1)(C) OF THE ACT IS THE SATISFACTION TO BE RECORDED BY THE ASSESSIN G OFFICER, WHICH ADMITTEDLY, HAS TO BE DURING THE COURSE OF ASSESSMENT PR OCEEDINGS. SO, WHERE THE ASSESSMENT PROCEEDINGS ARE PENDING, THEN THE A SSESSING OFFICER HAS TO APPLY HIS MIND AND ON BEING SATISFIED, H E HAS TO GIVE A FINDING THAT THE ASSESSEE BEFORE HIM HAS EITHER CONCEALE D THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICU LARS OF INCOME IN RESPECT OF THE ISSUE BEFORE HIM. THEREAFTER, THE NOTI CE SHOULD BE ISSUED TO SUCH PERSON BY THE CONCERNED OFFICER, WHEREIN IT SH OULD BE CLEAR THAT THE ASSESSEE HAS TO JUSTIFY ITS CASE EITHER FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THER E MAY BE CASES WHERE THERE IS ISSUE OF BOTH CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME, BASED ON THE NATURE OF ADDITIONS, THEN IN SUCH CASES, SATISFACTION AND NOTICE THEREON SHOULD SPE CIFY EXACT CHARGE AGAINST THE ASSESSEE. THE CHARGE HAS TO BE FURTH ER SPECIFIED WHILE COMPLETING PENALTY PROCEEDINGS AND THE ASSESSING O FFICER HAS TO COME TO A CONCLUSION AS TO WHETHER IT IS CASE OF CONCEA LMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. T HE QUESTION WHICH FURTHER ARISES WHERE THE SATISFACTION RECORDED BY THE A SSESSING OFFICER AND THE NOTICE ISSUED THEREAFTER IS WITHOUT APPLICATIO N OF MIND, THEN CAN THE SUBSEQUENT ORDER PASSED LEVYING PENALTY BE HELD TO BE VALID?. THE HONBLE KARNATAKA HIGH COURT IN CIT & ANR. VS. MANJU NATHA COTTON AND GINNING FACTORY (SUPRA) HAD DEALT UPON THE ISSUE OF NO TICE UNDER SECTION 274 OF THE ACT FOR THE PURPOSE OF LEVYING PEN ALTY FOR CONCEALMENT AND OBSERVED AS UNDER:- 59. AS THE PROVISION STANDS, THE PENALTY PROCEEDIN GS CAN BE INITIATED ON VARIOUS GROUND SET OUT THEREIN. IF THE ORDER PASSED BY THE AUTHORITY CATEGORICALLY RECORDS A FINDING REGAR DING THE EXISTENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN PENALTY PROCEEDINGS IS INITIATED, IN THE NOTICE TO BE ISSUE D UNDER SECTION 274, THEY COULD CONVENIENTLY REFER TO THE SAID ORDE R WHICH CONTAINS THE SATISFACTION OF THE AUTHORITY WHICH HAS PASSED THE ORDER. HOWEVER, IF THE EXISTENCE OF THE CONDITIONS COULD N OT BE DISCERNED FROM THE SAID ORDER AND IF IT IS A CASE OF RELYING ON DEEMING PROVISION CONTAINED IN EXPLANATION-1 OR IN EXPLANAT ION-1(B), THEN THOUGH PENALTY PROCEEDINGS ARE IN THE NATURE OF CIV IL LIABILITY, IN FACT, IT IS PENAL IN NATURE. IN EITHER EVENT, THE P ERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED IN SECTION 271 SHOULD B E MADE KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEND IMPOSING PEN ALTY ON HIM AS THE SECTION 274 MAKES IT CLEAR THAT ASSESSEE HAS A RIGHT TO CONTEST SUCH PROCEEDINGS AND SHOULD HAVE FULL OPPOR TUNITY TO MEET THE CASE OF THE DEPARTMENT AND SHOW THAT THE CONDIT IONS STIPULATED IN SECTION 271(1)(C) DO NOT EXIST AS SUC H HE IS NOT LIABLE TO PAY PENALTY. THE PRACTICE OF THE DEPARTMENT SEND ING A PRINTED FARM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NOT REBUTTING THE INIT IAL PRESUMPTION IS SERIOUS IN NATURE AND HE HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILITY. AS THE SAID PROVISIONS HAVE T O BE HELD TO BE 8 ITA NOS.1206 TO 1209/PN/2014 STRICTLY CONSTRUED, NOTICE ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY OTHER WISE, PRINCIPLES OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NO TICE IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASSESSEE. 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, TH AT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. NO DOUBT, THE FACTS OF SOME CASES MAY ATTRACT BOTH THE OFFENCES AND IN SOME CASES THERE M AY BE OVERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES T HE INITIATION OF THE PENALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE O FFENCES. BUT DRAWING UP PENALTY PROCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSEE GUILTY OF ANOTHER OFFENCE OR FINDING HIM G UILTY FOR EITHER THE ONE OR THE OTHER CANNOT BE SUSTAINED IN LAW. IT IS NEEDLESS TO POINT OUT SATISFACTION OF THE EXISTENCE OF THE GROU NDS MENTIONED IN SECTION 271(1)(C) WHEN IT IS A SINE QUA NON FOR INI TIATION OR PROCEEDINGS, THE PENALTY PROCEEDINGS SHOULD BE CONF INED ONLY TO THOSE GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECI FICALLY STATED SO THAT THE ASSESSEE WOULD HAVE THE OPPORTUNITY TO MEET THOSE GROUNDS. AFTER, HE PLACES HIS VERSION AND TRIES TO SUBSTANTIATE HIS CLAIM, IF AT ALL, PENALTY IS TO BE IMPOSED, IT SHOU LD BE IMPOSED ONLY ON THE GROUNDS ON WHICH HE IS CALLED UPON TO ANSWER . IT IS NOT OPEN TO THE AUTHORITY, AT THE TIME OF IMPOSING PENALTY T O IMPOSE PENALTY ON THE GROUNDS OTHER THAN WHAT ASSESSEE WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENALTY PROCEEDI NGS MAY BE VALID AND LEGAL, THE FINAL ORDER IMPOSING PENALTY W OULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAIN ED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROUND, THE PE NALTY SHOULD ALSO BE IMPOSED ON THE SAME GROUND. WHERE THE BASIS OF THE INITIATION OF PENALTY PROCEEDINGS IS NOT IDENTICAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, THE IMPOSITION OF PENALTY IS NOT VALID. THE VALIDITY OF THE ORDER OF PENALTY MUST BE DETERMINED WITH REFERENCE TO THE INFORMATION, FACTS AND MATERIALS I N THE HANDS OF THE AUTHORITY IMPOSING THE PENALTY AT THE TIME THE ORDER WAS PASSED AND FURTHER DISCOVERY OF FACTS SUBSEQUENT TO THE IMPOSITION OF PENALTY CANNOT VALIDATE THE ORDER OF PENALTY WHI CH, WHEN PASSED, WAS NOT SUSTAINABLE. 61. THE ASSESSING OFFICER IS EMPOWERED UNDER THE AC T TO INITIATE PENALTY PROCEEDINGS ONCE HE IS SATISFIED IN THE COU RSE OF ANY PROCEEDINGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF TOTAL INCOME UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICULARS OF I NCOME ARE DIFFERENT. THUS THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS TO COME TO THE CONCLUSION THAT WHETHER IS IT A CASE OF CONCEALMENT OF INCOME OR IS IT A CASE OF FURNISHING OF INACCURATE PARTICULARS. THE APEX COURT IN THE CASE OF ASHOK PAI REPORTED IN [20 07] 292 ITR 11 (SC) AT PAGE 19 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY D IFFERENT CONNOTATIONS. THE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEERING WORKS REPORTED IN [1980] 122 ITR 306 (G UJ) AND THE DELHI HIGH COURT IN THE CASE OF CIT V. VIRGO MARKET ING P. LTD. REPORTED IN [2008] 171 TAXMAN 156, HAS HELD THAT LE VY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVI ED AND THE POSITION BEING UNCLEAR PENALTY IS NOT SUSTAINABLE. THEREFORE , WHEN THE 9 ITA NOS.1206 TO 1209/PN/2014 ASSESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATEL Y MARKED. SIMILAR IS THE CASE FOR FURNISHING INACCURATE PARTI CULARS OF INCOME. THE STANDARD PROFORMA WITHOUT STRIKING OF THE RELEV ANT CLAUSES WILL LEAD TO AN INFERENCE AS TO NON-APPLICATION OF MIND . 15. THE HONBLE KARNATAKA HIGH COURT HAS LAID DOWN T HE PROPOSITION THAT THE ASSESSING OFFICER IS TO BE SATISFIED IN THE COURSE OF PROCEEDINGS THAT THERE IS EITHER CONCEALMENT OF INCOME OR FURNISH ING OF INACCURATE PARTICULARS OF INCOME UNDER CLAUSE (C) TO SECTION 271( 1) OF THE ACT. IT HAS BEEN CATEGORICALLY HELD THAT CONCEALMENT OF INCO ME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME ARE DIFFERENT. THE HONBLE HIGH COURT HAS THUS, LAID DOWN THAT THE ASSESSING OFFICER WHIL E ISSUING NOTICE HAS TO COME TO CONCLUSION THAT WHETHER IT IS CASE OF CO NCEALMENT OF INCOME OR CASE OF FURNISHING OF INACCURATE PARTICULAR S OF INCOME. THE RELIANCE IN THIS REGARD WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN T. ASHOK PAI VS. CIT (2007) 292 ITR 11 (SC), WHEREIN AT PAGE 19 IT WAS HELD THAT CONCEALMENT OF INCOME AN D FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CON NOTATION. APPLYING THE SAID PROPOSITION, IT WAS HELD THAT WHERE THE ASSESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT, T HEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. SIMILARLY, FOR FURNISHI NG INACCURATE PARTICULARS OF INCOME, THE STANDARD PROFORMA WITHOUT STRIKING OF RELEVANT CLAUSES, AS PER THE HONBLE HIGH COURT WOULD LEAD TO INFERENCE AS TO NON-APPLICATION OF MIND. 16. FURTHER, THE HONBLE KARNATAKA HIGH COURT IN CI T VS. SSAS EMERALD MEADOWS (SUPRA) HAS DISMISSED THE APPEAL OF REVEN UE, WHERE THE TRIBUNAL HAD ALLOWED THE APPEAL OF ASSESSEE HOLDING THAT THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 R.W.S. 27 1(1)(C) OF THE ACT TO BE BAD IN LAW AS IT DOES NOT SATISFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT UNDER WHICH IT HAS BEEN INITIAT ED THE HONBLE HIGH COURT HAD RELIED ON DECISION OF DIVISION BENCH OF THE COURT RENDERED IN CIT & ANR. VS. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA). THE HONBLE SUPREME COURT IN CIT VS. SSAS EMERALD MEADO WS (SUPRA) HAS DISMISSED THE SPECIAL LEAVE PETITION. 17. THE PUNE BENCH OF TRIBUNAL IN M/S. SAI VENKATA CONSTRUCTION VS. ADDL. CIT (SUPRA) AND IN SANJOG TARACHAND LODHA VS. I TO (SUPRA) HAVE APPLIED THE RATIO LAID DOWN BY THE HONBLE KARNATAK A HIGH COURT (SUPRA) AND HELD THAT WHERE THERE IS NO STRIKING OFF O F EITHER OF LIMBS, THEN NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C) O F THE ACT WAS INVALID AND SUBSEQUENT PENALTY PROCEEDINGS WERE HELD T O BE VITIATED. 18. THE MUMBAI BENCH OF TRIBUNAL IN SANGHAVI SAVLA COMMODITY BROKERS P. LTD. VS. ACIT IN ITA NO.1746/MUM/2011, REL ATING TO ASSESSMENT YEAR 2007-08, ORDER DATED 22.12.2015 WHILE D ECIDING SIMILAR ISSUE, WHEREIN THE ASSESSING OFFICER HAD INITIATED PENALTY PROCEEDINGS FOR CONCEALMENT OF PARTICULARS OF INCOME WITHOUT STRIKING INAPPROPRIATE WORDS OR ANY PARTS OF NOTICE AND PROCEE DED TO LEVY PENALTY FOR CONCEALMENT, THEN FOLLOWING THE RATIO L AID DOWN BY THE HONBLE KARNATAKA HIGH COURT, THE TRIBUNAL HELD THA T NOTICE ISSUED FOR INITIATING PENALTY PROCEEDINGS WERE INVALID AND CONSE QUENTLY PENALTY PROCEEDINGS WERE INVALID. 10 ITA NOS.1206 TO 1209/PN/2014 19. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY KOLKATA BENCH OF TRIBUNAL IN SHRI DEEPAK KUMAR PATWARI VS. ACIT IN IT A NOS.616 TO 618/KOL/2013, RELATING TO ASSESSMENT YEARS 2007-08 TO 2009-10, ORDER DATED 03.02.2016 AND IT HAS BEEN FURTHER HELD THAT T HE PROVISIONS OF SECTION 292B OF THE ACT CANNOT CURE THE BASIC DEFECT IN ASSUMPTION OF JURISDICTION AND COULD ONLY CURE THE MISTAKE, DEFECT OR OMISSION IN THE RETURN OF INCOME, ASSESSMENT, NOTICE OR THE PROCEEDING S. THE TRIBUNAL FURTHER HELD THAT SHOW CAUSE NOTICE AND THE REASONS MEN TIONED IN THE SHOW CAUSE NOTICE WERE PART OF PROCESS OF NATURAL JUSTIC E AND THE DEFECT IN SUCH NOTICE COULD NOT BE OVERLOOKED. SIMILAR PRO POSITION HAS FURTHER BEEN LAID DOWN IN OTHER DECISIONS OF VARIOUS BENCHES OF TRIBUNAL WHICH HAVE BEEN RELIED UPON BY THE ASSESSEE BEFORE US. 20. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED HEAVY RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. SMT. KAUSHALYA (SUPRA). IN THE FACTS OF THE CASE BEFORE THE HONBLE BOMBAY HIGH COURT, THE HONBLE H IGH COURT QUASHED THE PENALTY LEVIED FOR ASSESSMENT YEAR 1967-68 AS THE SAM E WAS IMPOSED WITHOUT AFFORDING REASONABLE OPPORTUNITY OF H EARING TO THE ASSESSEE. IN RESPECT OF OTHER TWO YEARS WHERE THERE WAS NON-STRIKING OF INACCURATE PORTION, THE HONBLE HIGH COURT HELD THA T THE SAME WOULD NOT INVALIDATE THE NOTICE ISSUED UNDER SECTION 274 OF THE ACT. IT WAS FURTHER HELD THAT THE ASSESSMENT ORDERS WERE ALSO MADE AND REASON S FOR ISSUING NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT WERE RECORDED BY THE ASSESSING OFFICER AND SINCE THE ASSESSEE FULLY KNEW IN D ETAIL THE EXACT CHARGE OF DEPARTMENT AGAINST HIM, IT COULD NOT BE SAID THAT EITHER THERE WAS NON-APPLICATION OF MIND BY THE ITO OR SO-CA LLED AMBIGUITY WORDING IN THE NOTICE IMPAIRED OR PREJUDICED THE RI GHT OF ASSESSEE OF REASONABLE OPPORTUNITY OF BEING HEARD. THE JURISDICT IONAL HIGH COURT DELIBERATED UPON THE PROVISIONS OF SECTION 274 OF THE ACT WHICH CONTAINED PRINCIPLE OF NATURAL JUSTICE OF THE ASSESSEE BEING HEARD BEFORE LEVYING PENALTY. IT ALSO HELD THAT MERE MISTAKE IN T HE LANGUAGE USED OR MERE NON-STRIKING OF INAPPROPRIATE PORTION COULD NOT ITSELF BE INVALIDATED THE NOTICE. IT WAS HELD THAT THE ENTIRE FACTUAL BACKGROUND WOULD FALL FOR CONSIDERATION IN THE MATTER AND NO O NE ASPECT WOULD BE DECISIVE. 21. IN RESPECT OF ASSESSMENT YEAR 1967-68, THE HONBLE H IGH COURT IN CIT VS. SMT. KAUSHALYA (SUPRA) ACKNOWLEDGED THAT THERE COULD EXIST A CASE WHERE VAGUENESS AND AMBIGUITY IN THE NOTICE COULD DEMONSTRATE NON-APPLICATION OF MIND BY THE AUTHORITY AND / OR U LTIMATE PREJUDICE TO THE RIGHT OF OPPORTUNITY OF HEARING CONTEMPLATED UN DER SECTION 274 OF THE ACT. THE SHOW CAUSE NOTICE FOR ASSESSMENT YEAR 1967 -68 WAS ISSUED EVEN BEFORE THE ASSESSMENT ORDER WAS MADE AND WHERE THE ASSESSEE HAD NO KNOWLEDGE OF EXACT CHARGE OF DEPARTMENT AGAI NST HIM AS IN THE NOTICE NOT ONLY THERE WAS USE OF WORD OR BETWEEN TH E GROUP OF CASES BUT THERE WAS USE OF WORD DELIBERATELY ALSO. THE HO NBLE HIGH COURT HELD THAT NOTICE CLEARLY DEMONSTRATED NON-APPLICATIO N OF MIND ON THE PART OF ASSESSING OFFICER. THE VAGUENESS AND AMBIGUITY IN THE NOTICE HAD ALSO PREJUDICED THE RIGHT OF REASONABLE OPPORTUNITY TO THE ASSESSEE SINCE HE DID NOT KNOW OF EXACT CHARGES HE HAD TO FACE. IN THIS BACKGROUND, QUASHING OF PENALTY PROCEEDINGS FOR ASSESSMENT YEAR 1967- 68 WAS HELD TO BE JUSTIFIED. APPLYING THE SAID PRINCIPLE LAID DO WN BY THE JURISDICTIONAL HIGH COURT, APPLICATION OF MIND BEFOR E ISSUING THE NOTICE 11 ITA NOS.1206 TO 1209/PN/2014 UNDER SECTION 274 OF THE ACT HAS TO BE CONSIDERED. TH E HONBLE HIGH COURT CLEARLY HELD THAT WHERE THERE IS VAGUENESS AND A MBIGUITY IN THE NOTICE ISSUED WHICH COULD DEMONSTRATE NON-APPLICATION OF MIND BY THE AUTHORITY WHICH IN TURN, WOULD ULTIMATELY PREJUDICE THE RIGHT OF OPPORTUNITY OF HEARING OF THE ASSESSEE AS CONTEMPLATED U NDER SECTION 274 OF THE ACT, THEN SUCH NOTICE IS INVALID. 22. NOW, COMING TO THE FACTS OF THE CASE BEFORE US, W HEREIN SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT ON CHHORIYA G ROUP OF CONCERNS ON 22.08.2008 AND DECLARATION OF RS.11.44 CRORES WAS M ADE IN THE HANDS OF WHOLE GROUP FOR VARIOUS YEARS. CONSEQUENT TO THE NOTICES ISSUED UNDER SECTION 153A OF THE ACT FOR VARIOUS YEARS, DIFFERENT ENTITIES FILED THE RETURN OF INCOME FOR THE RESPECTIVE YEARS A ND CUMULATIVELY FOR RS.13.99 CRORES AS ADDITIONAL INCOME. THE INCOME WAS D ECLARED ON ACCOUNT OF ON-MONEY ON SALE OF PLOTS, WHICH WAS DETECT ED FROM THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH. ADMITTED LY, EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT IS ATTRACTED IN SUC H CASES. HOWEVER, THE CASE OF ASSESSEE BEFORE US IS THAT THE ASSESSING OFFICER W HILE COMPLETING THE ASSESSMENT PROCEEDINGS HAD TO BE SATISFIED THAT THE ASSESSEE HAD EITHER CONCEALED THE INCOME OR FURNISHED IN ACCURATE PARTICULARS OF INCOME AND IS LIABLE TO LEVY OF PENALT Y UNDER SECTION 271(1)(C) R.W.S. EXPLANATION 5A OF THE ACT. THE NOT ICE IS TO BE ISSUED TO THE ASSESSEE UNDER SECTION 274 OF THE ACT. BEFORE ISSUING SUCH NOTICE, SATISFACTION HAS TO COME OUT FROM THE PROCEEDINGS GOING ON BEFORE THE ASSESSING OFFICER. THE PERUSAL OF ASSESSMENT ORDER PASSED IN THE PRESENT CASE REFLECTS THAT THE ASSESSING OFFICER WHILE IN ITIATING PROCEEDINGS HAS RECORDED SATISFACTION AS TO THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND HAS ALSO CONCEALE D THE INCOME. THE ONLY SOURCE OF ADDITION IN THE HANDS OF ASSESSEE IS AD DITIONAL INCOME OFFERED BY THE ASSESSEE PURSUANT TO SEARCH OPERATI ONS. IN SUCH CIRCUMSTANCES, IT IS CATEGORICALLY A CASE OF CONCEALMEN T. HOWEVER, THE ASSESSING OFFICER REFERS TO BOTH THE LIMBS OF SECTION 271 (1)(C) OF THE ACT AND THE SATISFACTION RECORDED IN THIS CASE SUFFERS FROM I NFIRMITY. FURTHER, EVEN IN THE NOTICE ISSUED UNDER SECTION 274 OF THE ACT, IRRELEVANT PART HAS NOT BEEN STRUCK OFF. WHILE COMPL ETING PENALTY PROCEEDINGS ALSO, THE ASSESSING OFFICER MAKES REFERENCE TO BOTH THE LIMBS I.E. CONCEALMENT OF INCOME AND FURNISHING OF IN ACCURATE PARTICULARS OF INCOME AND IN THE FINAL, LEVIES PENALT Y FOR CONCEALMENT OF INCOME. 23. HOWEVER, THE QUESTION WHICH IS RAISED BEFORE US BY WAY OF ADDITIONAL GROUND OF APPEAL IS ROOT OF START OF THE P ROCEEDINGS I.E. RECORDING OF SATISFACTION AND THE ISSUE OF NOTICE, WHIC H HAS BEEN CHALLENGED BY THE ASSESSEE TO BE INVALID. APPLYING THE RATIO LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN CIT & ANR. V S. MANJUNATH COTTON AND GINNING FACTORY (SUPRA) AND CIT VS. SSAS EMERALD MEADOWS (SUPRA) AND IN VIEW OF SLP BEING DISMISSED, WE FIND MER IT IN THE PLEA OF ASSESSEE THAT THE SATISFACTION RECORDED IN THE PRESENT CASE TO INITIATE PENALTY PROCEEDINGS BOTH FOR CONCEALMENT OF INCOME A ND FURNISHING OF PARTICULARS OF INCOME AGAINST ADDITIONAL INCOME OFFER ED BY THE ASSESSEE IS INCORRECT. FURTHER, WHERE THE ASSESSEE IS NOT AWARE OF EXACT CHARGE AGAINST HIM, THE AMBIGUITY IN THE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT BY NOT STRIKING OF PORTION WHIC H IS NOT APPLICABLE, PREJUDICE THE RIGHT OF REASONABLE OPPORTUNITY TO THE ASSESSEE, AS HE WAS 12 ITA NOS.1206 TO 1209/PN/2014 NOT MADE AWARE OF EXACT CHARGE HE HAD TO FACE. IT IS A CLEAR-CUT CASE OF CONCEALMENT SINCE THE ASSESSEE HAD OFFERED ADDITIONAL IN COME PURSUANT TO SEARCH CARRIED OUT AT ITS PREMISES. IT IS NOT THE C ASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AND HENCE, THE ASSESSIN G OFFICER SHOULD HAVE RECORDED THE SATISFACTION ACCORDINGLY AND ISSUED T HE NOTICE ACCORDINGLY. 24. WE FIND NO MERIT ON THE PARTIAL RELIANCE PLACED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE DECISION OF JURISDICTIONAL HIGH COURT IN CIT VS. SMT. KAUSHALYA (SUPRA). THE HONBLE HIGH COURT HAS CLEARLY LAID DOWN THE PROPOSIT ION THAT THE ASSESSING OFFICER HAS TO MAKE THE ASSESSEE FULLY AWARE OF EX ACT CHARGE OF THE DEPARTMENT AGAINST HIM. AS POINTED OUT, IN PRESE NT CASE, IN THE ASSESSMENT ORDER ITSELF WHILE RECORDING SATISFACTION FOR I NITIATING PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT, EXACT CHARGE OF THE DEPARTMENT AGAINST THE ASSESSEE IS NOT CLEAR. THE ASSESSING OFFICER RECORDS THE SATISFACTION FOR INITIATING PENALTY PROCEE DINGS ON BOTH THE COUNTS I.E. CONCEALMENT OF INCOME AND FURNISHING OF I NACCURATE PARTICULARS OF INCOME. THE HONBLE BOMBAY HIGH COUR T HAD ALSO UPHELD THE QUASHING OF PENALTY PROCEEDINGS FOR ASSESSMENT YEAR 1 967-68 TO BE JUSTIFIED ON ACCOUNT OF VAGUENESS AND AMBIGUITY IN THE NOTICE ISSUED. BUT THE HONBLE HIGH COURT FURTHER HELD THAT WHERE THE ASSESSEE WAS FULLY AWARE OF EXACT CHARGE OF THE DEPARTMENT AGAIN ST HIM, THEN TECHNICAL NON-STRIKING OF CERTAIN TERMS IN THE NOTICE WOULD NOT INVALIDATE THE PROCEEDINGS. WHERE THERE IS DEFAULT I N THE FIRST STAGE OF MAKING THE ASSESSEE AWARE OF EXACT CHARGE OF THE DEPART MENT, THEN INITIATION OF PENALTY PROCEEDINGS ARE VITIATED AND T HE SAME ARE TO BE QUASHED. THE ISSUE OF NOTICE UNDER SECTION 274 OF THE ACT ON SUCH VAGUENESS AND AMBIGUITY MAKES SUCH NOTICE INVALID AND P ROCEEDINGS THEREAFTER ARE TO BE QUASHED. 25. THE HONBLE SUPREME COURT IN T. ASHOK PAI VS. CI T (SUPRA) HAD HELD AS UNDER:- 23. SECTION 271(1)(C) REMAINS A PENAL STATUTE. TH E RULE OF STRICT CONSTRUCTION SHALL APPLY THERETO. THE INGRE DIENTS FOR IMPOSING PENALTY REMAIN THE SAME. THE PURPOSE OF T HE LEGISLATURE THAT IT IS MEANT TO BE A DETERRENT TO TAX EVASION I S EVIDENCED BY THE INCREASE IN THE QUANTUM OF PENALTY, FROM 20 PER CEN T UNDER THE 1922 ACT TO 300 PER CENT IN 1985. 24. CONCEALMENT OF INCOME AND FURNISHING OF INAC CURATE PARTICULARS CARRY DIFFERENT CONNOTATIONS. CONCEAL MENT REFERS TO A DELIBERATE ACT ON THE PART OF THE ASSESSEE. A MERE OMISSION OR NEGLIGENCE WOULD NOT CONSTITUTE A DELIBERATE ACT OF SUPPRESSION VERY OR SUGGESTION FALSI. 26. WHERE CONCEALMENT OF INCOME AND FURNISHING OF IN ACCURATE PARTICULARS OF INCOME ARE TWO DIFFERENT CONNOTATIONS , THEN AS PER PROVISIONS OF THE ACT, THE SATISFACTION HAS TO BE RECORD ED BY THE ASSESSING OFFICER BEFORE INITIATING PENALTY PROCEEDINGS AS TO UNDER WHICH LIMB THE CASE OF ASSESSEE FALLS. IN THE PRESENT SET OF FACTS, THE SATISFACTION AS RECORDED BY THE ASSESSING OFFICER WHICH IS EVIDENT FROM 13 ITA NOS.1206 TO 1209/PN/2014 THE ASSESSMENT ORDER ITSELF DOES NOT ESTABLISH THE CASE OF R EVENUE AGAINST THE ASSESSEE THAT IT IS LIABLE FOR LEVY OF PENALT Y FOR CONCEALMENT UNDER WHICH LIMB I.E. FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE NOTICE ISSUED U NDER SECTION 274 OF THE ACT BY THE ASSESSING OFFICER ALSO DOES NOT SHOW CAU SE THE ASSESSEE AS TO MAKE HIM AWARE OF EXACT CHARGE LEVIED AGA INST HIM. IN THE ABSENCE OF SAME, IT CAUSES PREJUDICE TO THE RIGHT O F REASONABLE OPPORTUNITY TO BE ALLOWED TO THE ASSESSEE BEFORE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. CONSEQUENTLY, PENALTY NOTICE ISSUED IN THE PRESENT CASE SUFFERS FROM INFIRMITIES I.E. LACK OF SATISF ACTION AND LACK OF NOTICE BEING ISSUED IN MAKING THE ASSESSEE AWARE OF EXAC T CHARGE AGAINST HIM, HENCE THE SAME IS QUASHED. THE PENALTY PR OCEEDINGS COMPLETED PURSUANT TO SUCH NOTICE ARE VITIATED AND TH E SAME ARE HELD TO BE INVALID. 27. NOW, COMING TO THE MERITS OF CASE, THE ASSESSEE HAD OFFERED ADDITIONAL INCOME ON ACCOUNT OF ON-MONEY ON SALE OF PLOTS. THE ASSESSING OFFICER HAD ACCEPTED THE SAME AND HAD INITIATE D PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THE CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS RELATING TO SECTION 27 1(1)(C) OF THE ACT ISSUED ENHANCEMENT NOTICE TO THE ASSESSEE. THEREAFTER, H E HAD GONE THROUGH THE SEIZED DOCUMENTS AND ELABORATELY REFERRED TO THEM AND EVEN REPRODUCED THE SCANNED COPIES OF SUCH DOCUMENTS AN D COMES TO CONCLUSION THAT LOANS WERE RECEIVED FROM RATANLAL BA FNA, BUT STILL UPHOLDS THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. ONCE THE FINDING OF CIT(A) IS THAT THESE ARE LOANS RECEIVED FRO M BAFNA AND ARE NOT ON-MONEY RECEIVED ON SALE OF PLOTS, THEN IN CASES WHER E PENALTY PROCEEDINGS HAVE BEEN INITIATED ON A DIFFERENT FOOTI NG AND THE CIT(A) REVERSES THE SAME AND HOLDS THE SAME TO BE LOANS RECEIVED BY THE ASSESSEE, THERE IS CHANGE IN OPINION AND BASIS FOR LEVY OF PENALTY FOR CONCEALMENT VARIES. IN SUCH CIRCUMSTANCES, THERE IS NO MERIT IN LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND THERE IS NO MERIT AT ALL IN LEVYING THE PENALTY @ 150%. ACCORDINGLY, WE ALLOW THE CLAIM OF ASSESSEE EVEN ON MERITS. THUS, THE GROUNDS OF APPEAL RAI SED BY THE ASSESSEE AND ADDITIONAL GROUND OF APPEAL RAISED BY THE A SSESSEE ARE ALLOWED. 28. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE STRONGLY STRESSED THAT THE ENTIRE ON-MONEY OFFERED BY THE ASSESSEE CANNOT BE TAXED AS ONLY THE PROFIT ELEMENT IN THE ON-MONEY HAD TO BE TAXED. IN THIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE FO R THE ASSESSEE PLACED RELIANCE ON VARIOUS DECISIONS. HOWEVER, WE ARE NOT ADDRESSING THIS ISSUE IN VIEW OF OUR DECIDING THE JURISDICTIONAL I SSUE OF NOTICE UNDER SECTION 274 OF THE ACT, IN FAVOUR OF THE ASSESSEE. 9. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NOT BEEN ABLE TO SHOW ANY DIFFERENCE IN THE FACTS OF PRESENT SET OF APPEALS AND THE APPEALS DECIDED BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF KANHAIYALAL D. JAIN (SUPRA). WE FIND THE CASE OF ASSESSEE AND KANHAIYALAL D. JAIN (SUPRA) HAVE GERMINATED FROM SAME SET OF FACTS. 14 ITA NOS.1206 TO 1209/PN/2014 THE ASSESSMENT AND PENALTY PROCEEDINGS IN BOTH THE CAS ES HAVE BEEN CARRIED OUT IN SIMILAR MANNER. THEREFORE, FOLLOWING THE O RDER OF COORDINATE BENCH WE QUASH THE LEVY OF PENALTY AND ALLOW THE APPEALS OF THE ASSESSEE FOR SAME REASONS. 10. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 14 TH DAY OF DECEMBER, 2016. SD/- SD/- (R.K. PANDA) (VIKAS AWASTHY) / ACCOUNTANT MEMBER ' / JUDICIAL MEMBER / PUNE ; ' DATED : 14 TH DECEMBER, 2016 . SATISH ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT(A), - I, NASHIK 4. CIT-I, NASHIK 5. $ ''( , ( , / DR, ITAT, A PUNE; 6. , / GUARD FILE. / BY ORDER , // TRUE COPY // /0 ' ( / SR. PRIVATE SECRETARY ( , / ITAT, PUNE