Amit Agarwal , Kolkata V. DCIT, Circle - 12(1), Kolkata , Kolkata

ITA 1448/KOL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5857 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-07-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 06-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C J SINGH
• Keywords: Search and seizure; Principle of natural justice; Initiation of penalty proceedings
• Section: 271(1)(c); 153A; 132

Judgement Text

ITA NO. 1448/KOL/2018 ASSESSMENT YEAR: 2009-2010 AMIT AGARWAL 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 1448/KOL/2018 ASSESSMENT YEAR: 2009-2010 AMIT AGARWAL,...................................... ........................................APPELLANT 68, BALLYGUNGE CIRCULAR ROAD, FLAT NO. 7F (7 TH FLOOR), KOLKATA-700 019 [PAN: ACSPA4915A] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. .......................RESPONDENT CIRCLE-12(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI SOUMITRA CHOUDHURY, ADVOCATE, FOR THE APPELLAN T SHRI C.J. SINGH, JCIT, SR. D.R , FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : JULY 03, 2019 DATE OF PRONOUNCING THE ORDER : AUGUST 09, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-4, KOLKATA DAT ED 22.05.2018, WHEREBY HE CONFIRMED THE PENALTY OF RS.1,23,380/- I MPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE IN COME TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF TRADING IN RICE BRAN. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 29.03.2010 DECLARING TOTAL INCOME OF RS.4,63,625/-. A SEARCH AND SEIZURE ACTIO N UNDER SECTION 132 WAS CONDUCTED IN THE CASE OF VARIOUS PERSONS BELONG ING TO UTSAV GROUP ITA NO. 1448/KOL/2018 ASSESSMENT YEAR: 2009-2010 AMIT AGARWAL 2 INCLUDING THE ASSESSEE ON 16.09.2009. CONSEQUENT UP ON THE SAID ACTION, A NOTICE UNDER SECTION 153A WAS ISSUED BY THE ASSESSI NG OFFICER ON 26.02.2010, IN RESPONSE TO WHICH THE RETURN OF INCO ME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE ON 07.05.20 10 DECLARING TOTAL INCOME OF RS.8,62,911/-. IN THE ASSESSMENT COMPLETE D UNDER SECTION 153A/143(3) OF THE ACT VIDE AN ORDER DATED 31.12.20 11, THE INCOME RETURNED BY THE ASSESSEE AT RS.8,62,911/- WAS ACCEP TED BY THE ASSESSING OFFICER. IN RESPECT OF THE DIFFERENCE BETWEEN THE T OTAL INCOME OF RS.8,62,911/- AS DECLARED BY THE ASSESSEE IN THE RE TURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A AND THE TOTAL INCOME OF RS.4,63,625/- AS DECLARED BY THE ASSESSEE IN THE RE TURN OF INCOME ORIGINALLY FILED, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE INITIATED BY THE ASSESSING OFFICER AND SINCE THE EX PLANATION OFFERED BY THE ASSESSEE IN RESPONSE TO THE SHOW-CAUSE NOTICE ISSUE D DURING THE COURSE OF THE SAID PROCEEDINGS WAS NOT FOUND ACCEPTABLE BY TH E ASSESSING OFFICER, HE IMPOSED A PENALTY OF RS.1,23,380/- UNDER SECTION 271(1)(C) BEING 100% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE IN RESPECT OF THE ADDITIONAL INCOME OF RS.3,99,286/- DECLARED IN THE RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 153A CONSEQUENT TO THE SEARCH AND SEIZURE ACTION. ON APPEAL, THE LD. CIT(A PPEALS) CONFIRMED THE SAID PENALTY. AGGRIEVED BY THE ORDER OF THE LD. CIT (APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS RAISED A PRELI MINARY ISSUE CHALLENGING THE VERY INITIATION OF THE PENALTY PROCEEDINGS BY T HE ASSESSING OFFICER UNDER SECTION 271(1)(C) ON THE GROUND THAT IN THE A BSENCE OF ANY SPECIFIC MENTION IN THE SHOW-CAUSE NOTICE ISSUED UNDER SECTI ON 274 OF THE ACT AS TO WHETHER THE ASSEESSEE IS GUILTY OF HAVING FURNI SHED INACCURATE PARTICULARS OF INCOME OR OF HAVING CONCEALED PART ICULARS OF SUCH INCOME, THE INITIATION OF PENALTY PROCEEDINGS ITSE LF WAS BAD IN LAW AND ITA NO. 1448/KOL/2018 ASSESSMENT YEAR: 2009-2010 AMIT AGARWAL 3 THE PENALTY ORDER PASSED IN PURSUANCE THEREOF IS LI ABLE TO BE QUASHED BEING INVALID. HE HAS INVITED OUR ATTENTION TO THE COPY OF RELEVANT PENALTY NOTICE TO POINT OUT THAT THE IRRELEVANT PORTION, VI Z. FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED PARTICULARS OF SUCH INCOME WAS NOT STRUCK OFF BY THE ASSESSING OFFICER. IT IS OBSERVED THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS.- ACIT (IN ITA NO. 1303/KOL/2010) CITED BY THE LD. CO UNSEL FOR THE ASSESSEE HAD AN OCCASION TO CONSIDER A SIMILAR ISSU E IN THE IDENTICAL FACT SITUATION AND THE ORDER PASSED BY THE ASSESSING OFF ICER IMPOSING PENALTY UNDER SECTION 271(1)(C) WAS HELD TO BE INVALID BY T HE TRIBUNAL RELYING ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANOTHER VS.- MANJUNATHA COTTON & GINNING FACTORY R EPORTED IN 359 ITR 565 AFTER DISCUSSING THE PROPOSITION LAID DOWN THER EIN IN GREAT DETAIL IN PARAGRAPH NO. 8 TO 8.2 OF ITS ORDER DATED 06.11.201 5, WHICH READ AS UNDER:- 8. THE NEXT ARGUMENT THAT THE SHOW CAUSE NOTICE U /S.274 OF THE ACT WHICH IS IN A PRINTED FORM DOES NOT STRIKE OUT AS TO WHETHER THE PENALTY IS SOUGHT TO BE LEVIED ON THE FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR C ONCEALING PARTICULARS OF SUCH INCOME. ON THIS ASPECT WE FIND THAT IN THE SHOW CAUSE NOTIC E U/S.274 OF THE ACT THE AO HAS NOT STRUCK OUT THE IRRELEVANT PART. IT IS THEREFORE NOT SPELT OUT AS TO WHETHER THE PENALTY PROCEEDINGS ARE SOUGHT TO BE LEVIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALING PARTICULARS OF SUCH INCOME. 8.1 THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 565 (KARN), HAS HELD THAT NOTICE U/S. 274 OF THE ACT SHOULD SPECIFICALLY STATE AS TO WHETHER PENALTY IS BEING P ROPOSED TO BE IMPOSED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE HONBLE HIGH COURT HAS FURTHER LAID DOWN THAT CERTAIN PRINTED FO RM WHERE ALL THE GROUNDS GIVEN IN SECTION 271 ARE GIVEN WOULD NOT SATISFY THE REQUIRE MENT OF LAW. THE COURT HAS ALSO HELD THAT INITIATING PENALTY PROCEEDINGS ON ONE LIMB AND FIND THE ASSESSEE GUILTY IN ANOTHER LIMB IS BAD IN LAW. IT WAS SUBMITTED THAT IN THE PRESENT CASE, THE AFORESAID DECISION WILL SQUARELY APPLY AND ALL THE ORDERS IMPOSING PENALTY HAVE TO B E HELD AS BAD IN LAW AND LIABLE TO BE QUASHED. 8.2 THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) HAS LAID DOWN THE FOLL OWING PRINCIPLES TO BE FOLLOWED IN THE MATTER OF IMPOSING PENALTY U/S.271(1)(C) OF THE ACT . NOTICE UNDER SECTION 274 59. AS THE PROVISION STANDS, THE PENALTY PROCEEDING S CAN BE INITIATED ON VARIOUS GROUND SET OUT THEREIN. IF THE ORDER PASSED BY THE AUTHORITY CATEGORICALLY RECORDS A FINDING REGARDING THE EXISTENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN ITA NO. 1448/KOL/2018 ASSESSMENT YEAR: 2009-2010 AMIT AGARWAL 4 PENALTY PROCEEDINGS IS INITIATED, IN THE NOTICE TO BE ISSUED UNDER SECTION 274, THEY COULD CONVENIENTLY REFER TO THE SAID ORDER WHICH CO NTAINS THE SATISFACTION OF THE AUTHORITY WHICH HAS PASSED THE ORDER. HOWEVER, IF T HE EXISTENCE OF THE CONDITIONS COULD NOT BE DISCERNED FROM THE SAID ORDER AND IF IT IS A CASE OF RELYING ON DEEMING PROVISION CONTAINED IN EXPLANATION-1 OR IN EXPLANATION-1(B), THEN THOUGH PENALTY PROCEEDINGS ARE IN THE NATURE OF CIVIL LIABILITY, IN FACT, IT I S PENAL IN NATURE. IN EITHER EVENT, THE PERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED I N SECTION 271 SHOULD BE MADE KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEND IMPOSI NG PENALTY ON HIM AS THE SECTION 274 MAKES IT CLEAR THAT ASSESSEE HAS A RIGH T TO CONTEST SUCH PROCEEDINGS AND SHOULD HAVE FULL OPPORTUNITY TO MEET THE CASE OF TH E DEPARTMENT AND SHOW THAT THE CONDITIONS STIPULATED IN SECTION 271(1)(C) DO NOT E XIST AS SUCH HE IS NOT LIABLE TO PAY PENALTY. THE PRACTICE OF THE DEPARTMENT SENDING A P RINTED FARM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SA TISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NOT REBUTTING THE INITIAL PRESUMPTION IS SERIOUS IN NATURE AND HE HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILITY. AS THE SAID PROVISIONS HAVE TO BE HELD TO BE STRICTLY CONSTRUED , NOTICE ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS WHICH HE HAS TO MEET SPE CIFICALLY. OTHERWISE, PRINCIPLES OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NOTIC E IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASS ESSEE. 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, TH AT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. NO DOUBT, THE FACTS OF SOME CASES MAY ATTRACT BOTH THE OFFENCES AND IN SOME CAS ES THERE MAY BE OVERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES THE INITIATION OF TH E PENALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE OFFENCES. BUT DRAWING UP PENALTY PROCE EDINGS FOR ONE OFFENCE AND FINDING THE ASSESSEE GUILTY OF ANOTHER OFFENCE OR FINDING H IM GUILTY FOR EITHER THE ONE OR THE OTHER CANNOT BE SUSTAINED IN LAW. IT IS NEEDLESS TO POINT OUT SATISFACTION OF THE EXISTENCE OF THE GROUNDS MENTIONED IN SECTION 271(1 )(C) WHEN IT IS A SINE QUA NON FOR INITIATION OR PROCEEDINGS, THE PENALTY PROCEEDINGS SHOULD BE CONFINED ONLY TO THOSE GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECIFICALL Y 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 SHOULD BE IMPOSED ONLY ON THE GROUNDS ON WHICH HE IS CALLED UPON TO ANSWER. I T IS NOT OPEN TO THE AUTHORITY, AT THE TIME OF IMPOSING PENALTY TO IMPOSE PENALTY ON T HE GROUNDS OTHER THAN WHAT ASSESSEE WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENALTY PROCEEDINGS MAY BE VALID AND LEGAL, THE FINAL ORDER IMPOSING PENALTY WOULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAIN ED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROUND, THE PENALTY SHOULD ALSO BE IMPOSED ON THE SAME GROUND. WHERE THE BASIS OF THE INITIATION OF PENALT Y PROCEEDINGS IS NOT IDENTICAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, T HE IMPOSITION OF PENALTY IS NOT VALID. THE VALIDITY OF THE ORDER OF PENALTY MUS T BE DETERMINED WITH REFERENCE TO THE INFORMATION, FACTS AND MATERIALS IN THE HAND S OF THE AUTHORITY IMPOSING THE PENALTY AT THE TIME THE ORDER WAS PASSED AND FU RTHER DISCOVERY OF FACTS SUBSEQUENT TO THE IMPOSITION OF PENALTY CANNOT VALI DATE THE ORDER OF PENALTY WHICH, 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 COURSE OF ANY PROCEEDIN GS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF T OTAL 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 FU RNISHING OF INACCURATE PARTICULARS. ITA NO. 1448/KOL/2018 ASSESSMENT YEAR: 2009-2010 AMIT AGARWAL 5 THE APEX COURT IN THE CASE OF ASHOK PAI REPORTED IN 292 ITR 11 AT PAGE 19 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURAT E PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THE GUJARAT HIGH COURT IN T HE CASE OF MANU ENGINEERING REPORTED IN 122 ITR 306 AND THE DELHI HIGH COURT IN THE CASE OF VIRGO MARKETING REPORTED IN 171 TAXMAN 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 TO I NVOKE THE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATEL Y MARKED. SIMILAR IS THE CASE FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ST ANDARD PRO FORMA WITHOUT STRIKING OF THE RELEVANT CLAUSES WILL LEAD TO AN INFERENCE A S TO NON-APPLICATION OF MIND. THE FINAL CONCLUSION OF THE HONBLE COURT WAS AS FO LLOWS:- 63. IN THE LIGHT OF WHAT IS STATED ABOVE, WHAT EME RGES IS AS UNDER: A) PENALTY UNDER SECTION 271(1)(C) IS A CIVIL LIAB ILITY. B) MENS REA IS NOT AN ESSENTIAL ELEMENT FOR IMPOSI NG PENALTY FOR BREACH OF CIVIL OBLIGATIONS OR LIABILITIES. C) WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDI ENT FOR ATTRACTING CIVIL LIABILITY. D) EXISTENCE OF CONDITIONS STIPULATED IN SECTION 2 71(1)(C) IS A SINE QUA NON FOR INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271 . E) THE EXISTENCE OF SUCH CONDITIONS SHOULD BE DISC ERNIBLE FROM THE ASSESSMENT ORDER OR ORDER OF THE APPELLATE AUTHORITY OR REVISI ONAL AUTHORITY. F) EVEN IF THERE IS NO SPECIFIC FINDING REGARDING THE EXISTENCE OF THE CONDITIONS MENTIONED IN SECTION 271(1)(C), AT LEAST THE FACTS SET OUT IN EXPLANATION 1(A) & (B) IT SHOULD BE DISCERNIBLE FROM THE SAID ORDER WHICH WOU LD BY A LEGAL FICTION CONSTITUTE CONCEALMENT BECAUSE OF DEEMING PROVISION. G) EVEN IF THESE CONDITIONS DO NOT EXIST IN THE AS SESSMENT ORDER PASSED, AT LEAST, A DIRECTION TO INITIATE PROCEEDINGS UNDER SECTION 271 (L)(C) IS A SINE QUA NON FOR THE ASSESSMENT OFFICER TO INITIATE THE PROCEEDINGS BECA USE OF THE DEEMING PROVISION CONTAINED IN SECTION 1(B). H) THE SAID DEEMING PROVISIONS ARE NOT APPLICABLE TO THE ORDERS PASSED BY THE COMMISSIONER OF APPEALS AND THE COMMISSIONER. I) THE IMPOSITION OF PENALTY IS NOT AUTOMATIC. J) IMPOSITION OF PENALTY EVEN IF THE TAX LIABILITY IS ADMITTED IS NOT AUTOMATIC. K) EVEN IF THE ASSESSEE HAS NOT CHALLENGED THE ORD ER OF ASSESSMENT LEVYING TAX AND INTEREST AND HAS PAID TAX AND INTEREST THAT BY ITSE LF WOULD NOT BE SUFFICIENT FOR THE AUTHORITIES EITHER TO INITIATE PENALTY PROCEEDINGS OR IMPOSE PENALTY, UNLESS IT IS DISCERNIBLE FROM THE ASSESSMENT ORDER THAT, IT IS O N ACCOUNT OF SUCH UNEARTHING OR ENQUIRY CONCLUDED BY AUTHORITIES IT HAS RESULTED IN PAYMENT OF SUCH TAX OR SUCH TAX LIABILITY CAME TO BE ADMITTED AND IF NOT IT WOULD H AVE ESCAPED FROM TAX NET AND AS OPINED BY THE ASSESSING OFFICER IN THE ASSESSMENT O RDER. L) ONLY WHEN NO EXPLANATION IS OFFERED OR THE EXPL ANATION OFFERED IS FOUND TO BE FALSE OR WHEN THE ASSESSEE FAILS TO PROVE THAT THE EXPLANATION OFFERED IS NOT BONA FIDE, AN ORDER IMPOSING PENALTY COULD BE PASSED. M) IF THE EXPLANATION OFFERED, EVEN THOUGH NOT SUB STANTIATED BY THE ASSESSEE, BUT IS FOUND TO BE BONA FIDE AND ALL FACTS RELATING TO THE SAME AND MATERIAL TO THE ITA NO. 1448/KOL/2018 ASSESSMENT YEAR: 2009-2010 AMIT AGARWAL 6 COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, NO PENALTY COULD BE IMPOSED. N) THE DIRECTION REFERRED TO IN EXPLANATION IB TO SECTION 271 OF THE ACT SHOULD BE CLEAR AND WITHOUT ANY AMBIGUITY. O) IF THE ASSESSING OFFICER HAS NOT RECORDED ANY S ATISFACTION OR HAS NOT ISSUED ANY DIRECTION TO INITIATE PENALTY PROCEEDINGS, IN APPEA L, IF THE APPELLATE AUTHORITY RECORDS SATISFACTION, THEN THE PENALTY PROCEEDINGS HAVE TO BE INITIATED BY THE APPELLATE AUTHORITY AND NOT THE ASSESSING AUTHORITY. P) NOTICE UNDER SECTION 274 OF THE ACT SHOULD SPEC IFICALLY STATE THE GROUNDS MENTIONED IN SECTION 271(1)(C), I.E., WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INCORRECT PARTICULARS OF INCOME Q) SENDING PRINTED FORM WHERE ALL THE GROUND MENTI ONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW. R) THE ASSESSEE SHOULD KNOW THE GROUNDS WHICH HE H AS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLES OF NATURAL JUSTICE IS OFFENDE D. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED TO THE ASSESSEE. S) TAKING UP OF PENALTY PROCEEDINGS ON ONE LIMB AN D FINDING THE ASSESSEE GUILTY OF ANOTHER LIMB IS BAD IN LAW. T) THE PENALTY PROCEEDINGS ARE DISTINCT FROM THE A SSESSMENT PROCEEDINGS. THE PROCEEDINGS FOR IMPOSITION OF PENALTY THOUGH EMANAT E FROM PROCEEDINGS OF ASSESSMENT, IT IS INDEPENDENT AND SEPARATE ASPECT O F THE PROCEEDINGS. U) THE FINDINGS RECORDED IN THE ASSESSMENT PROCEED INGS IN SO FAR AS 'CONCEALMENT OF INCOME' AND 'FURNISHING OF INCORRECT PARTICULARS ' WOULD NOT OPERATE AS RES JUDICATA IN THE PENALTY PROCEEDINGS. IT IS OPEN TO THE ASSES SEE TO CONTEST THE SAID PROCEEDINGS ON MERITS. HOWEVER, THE VALIDITY OF THE ASSESSMENT OR REASSESSMENT IN PURSUANCE OF WHICH PENALTY IS LEVIED, CANNOT BE THE SUBJECT MATTER OF PENALTY PROCEEDINGS. THE ASSESSMENT OR REASSESSMENT CANNOT BE DECLARED A S INVALID IN THE PENALTY PROCEEDINGS. (EMPHASIS SUPPLIED) IT IS CLEAR FROM THE AFORESAID DECISION THAT ON THE FACTS OF THE PRESENT CASE THAT THE SHOW CAUSE NOTICE U/S. 274 OF THE ACT IS DEFECTIVE AS IT DOES NOT SPELL OUT THE GROUNDS ON WHICH THE PENALTY IS SOUGHT TO BE IMPOSED. FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIGH COURT, WE HOLD THAT THE ORDERS IMPOSING PENALTY IN ALL THE ASSESSMENT YEARS HAVE TO BE HELD AS INVALID AND CONSEQUENTLY PENALTY IMPOSED IS CANC ELLED. FOR THE REASONS GIVEN ABOVE, WE HOLD THAT LEVY OF P ENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED. WE THEREFORE CANCEL THE ORDERS IMPOSING PENALTY ON THE ASSESSEE AND ALLOW THE APPEAL BY THE ASSESSEE. 4. IN OUR OPINION, THE DECISION OF THE COORDINATE B ENCH OF THIS TRIBUNAL RENDERED IN THE CASE OF SUVAPRASANNA BHATT ACHARYA VS.- ACIT RENDERED VIDE ITS ORDER DATED 06.11.2015 IN ITA NO. 1303/KOL/2010 BY RELYING ON THE DECISION OF THE HONBLE KARNATAKA HI GH COURT IN THE CASE OF ITA NO. 1448/KOL/2018 ASSESSMENT YEAR: 2009-2010 AMIT AGARWAL 7 CIT & ANOTHER VS.- MANJUNATHA COTTON & GINNING FAC TORY REPORTED IN 359 ITR 565 IS SQUARELY APPLICABLE IN THE PRESENT CASE. IT IS ALSO NOTED THAT A SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF PRINCIPAL CIT VS.- BIJOY KR. AGARWAL (ITAT NO. 272 OF 2017 DATED 02.04.2019), WHEREIN THE DECISION OF THE TRIBUNAL C ANCELLING THE PENALTY IMPOSED UNDER SECTION 271(1)(C) WAS UPHELD BY THE H ONBLE JURISDICTIONAL HIGH COURT HOLDING THAT THE NOTICE ISSUED UNDER SEC TION 271(1)(C) WITHOUT SPECIFYING WHICH OF THE TWO CONTRAVENTIONS, THE ASS ESSEE IS GUILTY OF WAS DEFECTIVE AND THE PENALTY IMPOSED IN PURSUANCE OF S UCH DEFECTIVE NOTICE WAS NOT SUSTAINABLE. TO ARRIVE AT THIS CONCLUSION, HONBLE CALCUTTA HIGH COURT RELIED ON THE DECISION OF AMRIT FOODS VS.- C OMMISSIONER OF CENTRAL EXCISE UP REPORTED IN (2005) 13 SCC 419 AS WELL AS THEIR OWN DECISION IN THE CASE OF PRINCIPAL CIT VS. DR. MURARI MOHAN KOL EY (ITAT NO. 306 OF 2017 DATED 18.07.2018). THE ISSUE RAISED BY THE ASS ESSEE IN THIS APPEAL THUS IS SQUARELY COVERED BY THE SAID JUDICIAL PRONO UNCEMENTS INCLUDING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT AND RESPECTFULLY FOLLOWING THE SAME, WE CANCEL THE PENALTY IMPOSED U PON THE ASSESSEE UNDER SECTION 271(1)(C) AND ALLOW THE APPEAL OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 09, 20 19. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP ) JUDICIAL MEMBER V ICE-PRESIDENT (KZ) KOLKATA, THE 9 TH DAY OF AUGUST, 2019 COPIES TO : (1) SHRI AMIT AGARWAL, 68, BALLYGUNGE CIRCULAR ROAD, FLAT NO. 7F (7 TH FLOOR), KOLKATA-700 019 (2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-12(1), KOLKATA, /NOW ITO, WARD-12(1), AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-4, KOLKAT A, (4) COMMISSIONER OF INCOME TAX, KOLKATA- , KOLKATA; ITA NO. 1448/KOL/2018 ASSESSMENT YEAR: 2009-2010 AMIT AGARWAL 8 (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.