DCIT, C.C. I, Kolkata, Kolkata V. Amarnath Shroff, Kolkata

ITA 1494/KOL/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4954 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 03-08-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 27-07-2010
• Court: TRIBUNAL
• Assessee Lawyers: A K TIBREWAL
• Keywords: Search and seizure; Principle of natural justice; Retrospective amendment; Initiation of penalty proceedings
• Section: 133A; 153A; 234B; 27; 132; 154

Judgement Text

1 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI WAS EEM AHMED, AM ] ITA NOS.1797 TO 1800/KOL/2009 ASSESSMENT YEARS : 2001-02,2002-03,2004-05&2005-06 AMAR NATH SHROFF . -VERSUS- D.C.I.T., CENTRAL CI RCLE-1, KOLKATA KOLKATA (PAN:AMQPS2466J) (APPELLANT) (RESPONDENT) ITA NOS.1494 TO 1497/KOL/2010 ASSESSMENT YEARS : 2001-02,2002-03,2004-05&2005-06 D.C.I.T., CENTRAL CIRCLE-1, -VERSUS- AMAR NATH SHR OFF KOLKATA KOLKATA (PAN:AMQPS2466J) (APPELLANT) (RESPONDENT) FOR THE ASSESSEE SHRI A.K.TIBREWAL, FCA & SHRI AMIT AGARWAL, ADVOCATE FOR THE DEPARTMENT : SHRI ANIL KUMAR PANDE, JCIT, SR.DR DATE OF HEARING : 08.02.2016. DATE OF PRONOUNCEMENT : 02.03.2016. ORDER PER BENCH ITA NOS.1797 TO 1800/KOL/2009 ARE APPEALS BY THE AS SESSEE AGAINST THE COMMON ORDER DATED 26.08.2009 OF CIT(A)-CENTRAL-II I, KOLKATA RELATING TO A.Y.2001-02, 2002-03, 2004-05 AND 2005-06. IN THESE APPEALS, THE ASSESSEE HAS CHALLENGED THE ORDER OF CIT(A) WHEREBY THE CIT(A) C ONFIRMED THE ORDER OF AO IMPOSING PENALTY U/S 271(1)(C) OF THE ACT. 2. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY U/S 271(1)(C) OF THE ACT WAS IMPOSED ON THE ASSESSEE BY AO ARE AS FOLLOWS :- THE ASSESSEE IS AN INDIVIDUAL. HE CARRIES ON THE B USINESS OF PROPERTY DEVELOPMENT. THE ASSESSEE HAD FILED RETURNS OF INC OME FOR A.YRS. 2001-02, 2002-03, 2 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 2004-05 AND 2005-06 IN THE NORMAL COURSE U/S 139(1) OF THE I.T.ACT, WITHIN THE DUE DATE ADMITTING THE FOLLOWING INCOMES : ASSESSMENT YEAR INCOME RETURNED (RS.) 2002-02 9,24,202/- 2002-03 7,31,722/- 2004-05 4,95,693/- 2005-06 13,59,795/- 3. THERE WAS A SEARCH AND SEIZURE OPERATION CARRIE D OUT U/S.132 OF THE INCOME TAX ACT, 1961 (ACT) ON 23.8.2006 BY THE INCOME TAX DEPA RTMENT ON THE BUILDER GROUP OF CASES OF WHICH THE ASSESSEE WAS A MEMBER. IN THE C OURSE OF SEARCH, THE ASSESSEE WAS FOUND TO BE IN POSSESSION OF UNDISCLOSED CASH, AND UNDISCLOSED INCOME. THE DETAILS ARE AS GIVEN BELOW :- S.NO. PARTICULARS OF INCOME AMOUNT (RS.) 1. ON ACCOUNT OF CASH FOUND AT RESIDENCE & OFFICE 1 9,00,000/- 2. INCOME FROM RELINQUISHMENT OF TENANCY RIGHTS AT 9/12, LAL BAZAAR STREET, KOLKATA. 92,45,700/- 3. ACCRETIONS FROM 4, CHOWRINGHEE LANE, KOLKAYA FRO M 01.01.2005 TO 18.08.2006 2,62,76,335/- 4. JESSORE ROAD PROJECT OF DIAMOND GROUP 12,00,000/ - 5. VARIOUS MISCELLANEOUS TRANSACTIONS AND RECEIPTS FROM 1 ST APRIL, 2005 TO 22 ND AUGUST, 2006 26,00,000/- TOTAL 4,12,22,035/- IN EFFECT, THE ASSESSEE WAS IN POSSESSION OF UNDISC LOSED CASH AND INCOME OF RS.4,12,22,035/-. 4. THE ASSESSEE MADE A DISCLOSURE U/S 132(4) OF TH E I.T.ACT, 1961, ADMITTING THE UNDISCLOSED INCOME OF RS.4,12,22,035/-. THE ASSESSE E AFTER VERIFICATION OF THE SEIZED MATERIAL, REVISED THE DISCLOSURE U/S 132(4), AT AN UNDISCLOSED INCOME OF RS.4,32,62,823/-. THE ASSESSMENT YEAR WISE BREAK-UP OF THE DISCLOSURE WAS AS UNDER :- ASSESSMENT YEAR DISCLOSURE AMOUNT (RS.) 2001-02 20,46,839/- 2002-03 93,27,534/- 2003-04 NIL 3 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 2004-05 15,30,967/- 2005-06 71,15,928/- 2006-07 1,33,80,134/- 2007-08 98,61,421/- TOTAL 4,32,62,823/- 5. THE ASSESSEE, IN THE COURSE OF ASSESSMENT PROC EEDINGS U/S 153A, FURTHER ADMITTED INCOMES OF RS.8,83,517/- AND RS.15,00,000/- FOR ASS ESSMENT YEARS 2002-03 AND 2007- 08, THEREBY ADMITTING AN AGGREGATE UNDISCLOSED INCO ME OF RS.4,56,46,339/-. THE A.O. HAD ACCEPTED THE DISCLOSURES MADE BY THE ASSESSEE A ND ASSESSED THE ASSESSEE AS UNDER :- ASST.YEAR INCOME ADMITTED U/S 139(1) (RS.) INCOME DISCLOSED U/S 153A (RS.) INCOME ASSESSED U/S 153A (RS.) NET TAX PAYABLE U/S 153A (RS.) 2001-02 9,24,202/- 20,46,839/- 29,71,040/- 6,86,000 /- 2002-03 7,31,722/- 93,27,534/- 1,09,30,784/- 27,34, 037/- 2004-05 4,95,693/- 15,30,967/- 20,26,660/- 2,54,720 /- 2005-06 13,59,795/- 71,15,928/- 84,75,723/- 13,04,9 32/- 6. THE ORDER OF THE AO IN THIS REGARD THERE IS A R EFERENCE TO VARIOUS ITEMS OF JEWELLERY, UNDISCLOSED BANK ACCOUNTS AND SEIZED PAPERS/DOCUMEN TS. THEREAFTER THERE IS A REFERENCE TO THE ASSESSEES OFFER TO TAX INCOME TO THE EXTENT MENTIONED ABOVE. THE AO HAS ACCEPTED SUCH OFFER TO TAX OF INCOME AND COM PLETED THE ASSESSMENT. THE ORDER OF ASSESSMENT MAKES A REFERENCE TO INITIATION OF PENALTY PROCEEDINGS AS FOLLOWS :- PENALTY PROCEEDINGS U/S 271(1)(C) IS INITIATED ACC ORDINGLY. 7. THE AO ISSUED SHOW CAUSE NOTICE U/S 274 OF THE A CT FOR IMPOSING PENALTY U/S 271(1)(C) OF THE ACT ON THE ASSESSEE AND IMPOSED PE NALTY ON THE ASSESSEE. ACCORDING TO THE AO THE OFFERING OF INCOME HAD BEEN MADE IN T HE COURSE OF ASSESSMENT PROCEEDINGS AFTER THE SEARCH AND SEIZURE OPERATIONS ONLY WHICH CONFIRMS THE EXISTENCE 4 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 OF A PRIMA FACIE CASE OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME AS PER EXPLANATION 1 TO SEC. 271(1)(C) OF THE ACT. THE AO ALSO HELD THAT THE ASSESSEE IS GUILTY OF CONCEALMENT OF PARTICULARS OF INCOME. IN THE SHOW CAUSE NOTICE U/S 274 OF THE ACT ISSUED PRIOR TO THE PASSING OF THE ORDER U/S 271(1)(C) OF THE ACT IMPOSING PENALTY, THE AO HAS NOT SPECIFIED AS TO WHETHER THE CHARGE AGAINST THE ASSESSEE IS FOR FURNISHING INACCURATE PARTICULA RS OF INCOME OR FOR CONCEALING PARTICULARS OF INCOME. 8. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT THE AS SESSEE WAS ENTITLED TO IMMUNITY UNDER EXPLANATION 5 TO SECTION 271 OF THE ACT AS THE ASSESSEE SATISFIES ALL THE CONDITIONS LAID DOWN THEREIN. THE ASSESSEE ALSO CON TENDED THAT EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT WAS NOT APPLICABLE TO THE CASE OF THE ASSESSEE BECAUSE THE ASSESSEE OFFERED EXPLANATION IN THE COURSE OF ASSES SMENT PROCEEDINGS WHILE OFFERING ADDITIONAL INCOME TO TAX AND SUCH OFFERING WAS ACCE PTED BY THE AO WITHOUT ANY MODIFICATION AND WITHOUT ANY FINDING WHATSOEVER AGA INST THE BONA FIDE OF THE WORKINGS SUBMITTED FOR THE ADDITIONAL DISCLOSURE. T HE ASSESSEE ALSO RELIED ON CERTAIN JUDICIAL PRONOUNCEMENTS IN SUPPORT OF ITS CLAIM THA T HE WAS ENTITLED TO IMMUNITY UNDER EXPLANATION 5 TO SECTION 271 OF THE ACT. 9. CIT(A) FIRSTLY HELD THAT EXPLANATION 1 TO SECTIO N 271(1)(C) OF THE ACT WAS APPLICABLE IN THE CASE OF THE ASSESSEE BECAUSE THE ASSESSEE HAD NOT FURNISHED ANY BONA FIDE EXPLANATION IN THE PENALTY PROCEEDINGS TO EXPL AIN THE REASONS AS TO WHY HE HAD NOT ADMITTED THE ENTIRE INCOMES IN EACH OF THE RETURNS FILED U/S 139(1) OF THE ACT FOR A.Y.2001-02, 2002-03, 2004-05 AND 2005-06. WITH REG ARD TO THE IMMUNITY EXPLANATION 5 TO SEC. 271(1)(C) OF THE ACT, THE CIT (A) WAS OF THE VIEW THAT TO CLAIM IMMUNITY UNDER CLAUSE (2) OF EXPLANATION 5 TO SECTI ON 271 OF THE ACT THE ASSESSEE HAD TO SATISFY THE FOLLOWING THREE CONDITIONS : (I) SUCH INCOME HAS BEEN DISCLOSED IN A STATEMENT U/S 1 32(4) OF THE ACT. 5 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 (II) IN SUCH STATEMENT THE ASSESSEE SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND (III) PAYS TAXES TOGETHER WITH INTEREST IN SUCH INCOME, I F ANY. 10. CIT(A) HELD THAT THE ASSESSEE SATISFIES THE CON DITIONS (I) AND (II) REFERRED TO ABOVE. THE FINDINGS OF THE CIT(A) IN THIS REGARD 12 TO 15 OF HIS ORDER. THESE FINDINGS WERE ACCEPTED BY THE REVENUE AS THEY HAD NOT FILED ANY APPEALS AGAINST THE COMMON ORDER OF THE CIT(A) DATED 26.8.2009 AND THEREFORE W E NEED NOT ELABORATE ON THE AFORESAID FINDINGS OF THE CIT(A). THE CIT(A) HOWEV ER HELD THAT WITH REGARD TO PAYMENT OF TAXES, THE ASSESSEE HAD NOT FULFILLED T HE CONDITIONS. THE OBSERVATIONS OF THE CIT(A) IN THIS REGARD WERE AS FOLLOWS :- IN REGARDS TO TAX PAYMENTS, THE APPELLANT FOR ASSE SSMENT YEAR 2001-02 ON A TOTAL INCOME OF RS.29,71,040/- WAS LIABLE TO PAY TAX OF R S.10,12,415/- AND INTEREST U/S 234A OF RS.7,256/-, INTEREST U/S 234B OF RS.6,72,710/-, AND INTEREST U/S 234C OF RS.395/-, AGGREGATING TO RS.16,92,236/-, WHICH HAD BEEN DISCH ARGED IN PART BY WAY OF TDS OF RS.2,86,782/-, SELF ASSESSMENT TAX U/S 140A OF RS.7 ,19,454/- AND REGULAR TAX OF RS. 5,00,000/- AND RS.54,374/- PAID ON 22-07-2008. THE APPELLANT IS STILL DUE TO PAY TAX AND INTEREST OF RS.1 ,31 ,626/- FOR ASSESSMENT YEAR 2002-03, THE APPELLANT ON A TOT AL INCOME OF RS.1,09,30,780/- WAS LIABLE TO PAY TAX OF RS.33,12,912/- AND INTEREST U/ S.234A OF RS.33,129/-, INTEREST U/S.234B OF RS. 21,35,900/- AND INTEREST U/S.234C O F RS.1,21,677/-,AGGREGATING TO RS.56,02,718/-, WHICH HAD BEEN DISCHARGED IN PART B Y WAY OF SELF ASSESSMENT TAX U/S.140A OF RS.28,69,581/- AND REGULAR TAX OF RS. 1 0,00,000/- AND RS.11,61,181/- PAID ON 22-07-2008 AND 01.08.2008 RESPECTIVELY. THE APPE LLANT IS STILL DUE TO PAY TAX AND INTEREST OF RS.5,71,956/- FOR ASSESSMENT YEAR 2004-05, THE APPELLANT ON A TOT AL INCOME OF RS.20,26,660/- WAS LIABLE TO PAY TAX OF RS.6,40,198/-, REFUND CALLED B ACK OF RS.51,992/-, AND INTEREST U/S.234A OF RS.5,289/-, INTEREST U/S.234B OF RS. 2, 34,957/- , AND INTEREST U/S.234D OF RS.13,517/- , AGGREGATING TO RS.9,44,996/- , WHICH HAD BEEN DISCHARGED IN PART BY WAY OF TDS OF RS.L,63,242/-, SELF ASSESSMENT TAX U/S.14 0A OF RS.5,27,991/- AND REGULAR TAX OF RS. 2,01,275/-PAID ON 22-07-2008. THE APPELLANT IS STILL DUE TO PAY TAX AND INTEREST OF RS.53,445/- . FOR ASSESSMENT YEAR 2005-06, THE APPELLANT ON A TOT AL INCOME OF RS. 84,75,7201- WAS LIABLE TO PAY TAX OF RS.28,23,757/-, INTEREST U/S.2 34A OF RS.28,237/- , INTEREST U/S.234B OF RS.9,16,087/- AND INTEREST U/S.234C OF RS.1,04, 477/- ,AGGREGATING TO RS.38,72,558/- WHICH HAD BEEN DISCHARGED IN PART BY WAY OF SELF AS SESSMENT TAX U/S.140A OF RS. 6 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 25,67,626/- AND REGULAR TAX OF RS.7,29,558/- PAID O N 11-09-2008. THE APPELLANT IS STILL DUE TO PAY TAX AND INTEREST OF RS.5,75,374/- . APPELLANT HAD NOT PAID THE ENTIRE TAX WITH INTEREST ON THE DISCLOSED INCOMES FOR THE ASSESSMENT YEARS. 2001-02, 2002-03, 2004-05 AND 200 5-06, AND, HENCE, HAS NOT SATISFIED CONDITIONALITY OF TAX PAYMENT. FROM THE ABOVE FACTS IT IS SEEN THAT THE APPELLANT HAS NOT SATISFIED ALL THE CONDITIONS, CUMULATIVELY, UNDER CLAUSE (2) TO EXPLANATION 5 TO SECTION.271(1)(C) OF THE I.T.ACT, 1961 IN RESPECT OF A/YRS. 2001-02,2002-03 ,2004-05 AND 2005-06. 11. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE IS IN APPEAL FOR THE TRIBUNAL. 12. THE GROUNDS OF APPEAL ORIGINALLY FILED BEFORE T HE TRIBUNAL WERE NARRATIVE AND HAD NOT SPECIFICALLY CHALLENGED THE LEGALITY OF THE ORDER OF CIT(A) CONFIRMING THE ORDER OF AO IMPOSING PENALTY ON THE ASSESSEE U/S 27 1(1)(C) OF THE ACT. THE ASSESSEE HAS THEREFORE FILED AN ADDITIONAL GROUND WHICH READ S AS FOLLOWS :- THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) ERRED IN CONFIRMING THE PENALTY OF RS.6,89,343 IMPOSED BY THE ASSESSING OFF ICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 IN RESPECT OF THE ASSESSMENT Y EAR 2001-02. 13. SINCE THE ADDITIONAL GROUND PROJECTS THE GRIEVA NCES OF THE ASSESSEE WHICH ARISES FROM THE ORDER OF CIT(A) AND FACTS AVAILABLE ON REC ORD, THE SAME IS ADMITTED FOR ADJUDICATION KEEPING IN VIEW THE DECISION RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO.LTD. VS CIT 2 29 ITR 383 WHEREIN THE HONBLE SUPREME COURT HELD THAT ADJUDICATION OF A LEGAL GRO UND BY WAY OF AN ADDITIONAL GROUND WHEN FACTS ARE AVAILABLE ON RECORD SHOULD BE PERMITTED. 14. THE ASSESSEE APART FROM FILING THESE APPEALS IN WHICH HE HAS CHALLENGED THE FINDING OF THE CIT(A) THAT THE ASSESSEE HAS NOT PAI D ADMITTED TAX ON ADDITIONAL INCOME DISCLOSED IN THE RETURNS FILED U/S.153A OF T HE ACT, ALSO FILED AN APPLICATION U/S 154 OF THE ACT BEFORE CIT(A) POINTING OUT THAT CIT( A) CONCLUSION THAT ASSESSEE DOES NOT SATISFY ONE OF THE REQUIREMENTS FOR GRANT OF IM MUNITY UNDER EXPLANATION 5 TO SECTION 271 OF THE ACT NAMELY PAYMENT OF TAXES TOG ETHER WITH INTEREST, SUFFERED FROM 7 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 AN ERROR APPARENT IN THE OFFICE OF THE RECORDS. THE ASSESSEE FURNISHED DETAILS OF PAYMENT OF TAXES AND PRAYED FOR RECTIFICATION OF TH E ORDER DATED 26.08.2009 OF CIT(A). 15. ON SUCH APPLICATION CIT(A) CALLED FOR A REMAND REPORT FROM AO AND AFTER CONSIDERING THE REMAND REPORT THE CIT(A) HELD THAT THE ASSESSEE HAD PAID TAXES ON THE INCOME DISCLOSED IN THE RETURNS FILED U/S 153A OF THE ACT AND WAS THEREFORE ENTITLED TO IMMUNITY UNDER EXPLANATION 5 TO SECTION 271 OF THE ACT. THE FOLLOWING WERE THE RELEVANT OBSERVATIONS OF CIT(A) IN THIS RE GARD : ON A CAREFUL EXAMINATION OF THE FACTS OF THE CASE IT IS FOUND THAT THE APPELLANT/ APPLICANT HAS FILED A CHART SHOWING YEAR-WISE DETAI LS OF DISCLOSURE OF INCOME AND TAX PAYMENT THEREON. IT IS ALSO APPARENT FROM THE IMPUG NED ORDER OF MY PREDECESSOR-IN- OFFICE AND HIS ORDERS IN THE RELATED CASES OF THE S AME GROUP THAT HIS DECISION WAS BASED ON THE AMOUNTS DUE, IN HIS OPINION, AS ON THE DATE OF PASSING OF THE APPELLATE ORDER. THEREFORE, AS A MATTER OF ABUNDANT PRECAUTION, I DE CIDED TO REFER THE MATTER TO THE AO WHO IS THE BEST PERSON TO CERTIFY THE DEMAND AND PA YMENT POSITION OF THE ASSESSEE. VIDE THIS OFFICE LETTER NO.CIT(A)/C-III/AMQPS2466J/KOL/2 010-11/38 DATED 29.04.2010 THE CHART SHOWING LIABILITIES AS WELL AS PAYMENTS FURNI SHED BY THE ASSESSEE WAS FORWARDED TO THE AO WHO WAS REQUESTED TO CERTIFY AS TO WHETHER T HE APPELLANT HAS PAID ALL THE TAXES TOGETHER WITH INTEREST FOR THE ASSESSMENT YEARS 200 1-02, 2002-03, 2004-05 AND 2005-06 BEFORE THE APPEAL ORDER DATED 26.08.2009. VIDE HIS LETTER NO.DCIT/CC- I/KOL/REMAND/2010-11/52 DATED 10.05.2010 THE AO HAS CATEGORICALLY STATED ' ON VERIFICATION OF THE RECORDS, IT IS SEEN THAT IN THE CASE OF THE ASSESSEE SHRI AMAR NATH SHROFF (AMQPS2466J), THERE WAS NO DEMAND OUTSTANDIN G AS ON THE DATE OF APPELLATE ORDER VIZ., 26.08.2009 FOR THE A. YRS. 2001-02, 200 2-03 AND 2004-05. FOR ASSESSMENT YEAR 2005-06, IT IS SEEN THAT THERE WAS A DEMAND OF RS.46,535/- FOR WHICH A REQUEST FOR ADJUSTMENT AGAINST REFUNDABLE AMOUNT OF RS.46.536/- FOR A/Y 2003-04 WAS MADE ON 11.12.2008. THE ADJUSTMENT WAS, HOWEVER, MADE SUBSE QUENTLY ON 26.04.2010. FROM THE ABOVE IT IS APPARENT THAT FOR THE A/YRS. 2001-02 TO 2002-03 AND 2004-05 NO DEMAND WAS OUTSTANDING ON THE DATE OF THE APPELLATE ORDER I.E. 26.08.2009. FOR THE A/Y 2005-06 ONLY RS.46,535/- WAS PENDING ON THE DATE OF THE APPELLAT E ORDER. HOWEVER, THE ASSESSEE HAD REQUESTED FOR ADJUSTMENT AGAINST REFUND DUE TO HIM OF RS.46,536/- FOR A/Y 2003-04 BEFORE THE DATE OF APPELLATE ORDER I.E. 26.08.2009. THE ASSESSEE CANNOT BE HELD RESPONSIBLE FOR THE INORDINATE DELAY ON THE PART OF THE DEPARTMENT IN EFFECTING THE REQUISITE ADJUSTMENT. SINCE HE HAS MADE A FORMAL RE QUEST FOR ADJUSTMENT OF REFUNDABLE AMOUNT ALMOST 8 MONTHS BEFORE THE DATE OF APPELLATE ORDER, IT IS CONSTRUED THAT HE HAD MADE SATISFACTORY ARRANGEMENT FOR PAYMENT OF THE DE MAND OF RS.46,535/- FOR A/Y 2005- 06. SO, ON CONSIDERATION OF ALL THESE DOCUMENTS WHI CH ARE PART OF THE RECORDS, IT IS EVIDENT THAT THE APPELLANT/APPLICANT HAS SATISFIED THE CONDITIONS OF EXPLANATION (5) TO SECTION 271(1)(C) FOR AVAILING ITSELF OF THE IMMUNI TY FROM PENALTY IMPOSABLE UNDER THE ACT. 8 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 THUS, IT IS ESTABLISHED BEYOND DOUBT THAT THERE HAD BEEN A MISTAKE IN APPRAISING THE OVERALL FACTS OF THE CASE IN SO FAR AS THE PAYMENT OF TAX WITH INTEREST IS CONCERNED AS HAD BEEN NOTED IN THE APPELLATE ORDER DATED 26-8-2009 A ND SUCH MISTAKE IS APPARENT FROM THE RECORDS. IN TERMS OF THE DECISION OF THE SUPREM E COURT OF INDIA IN CIT VS. HERO CYCLES (P) LTD, REPORTED IN 228 ITR 463 (SC) 1997, RECTIFICATION UNDER SECTION 154 CAN BE MADE WHEN A GLARING MISTAKE OF FACT OR LAW HAS B EEN COMMITTED BY THE OFFICER PASSING THE ORDER AND IT IS APPARENT FROM THE RECOR DS. IT HAS ALSO BEEN HELD IN THE CASE OF N. RAJAMONI AMMA VS. DEPUTY CIT REPORTED IN 86 CTR (KER) 12, 1990 THAT THE COMMISSIONER OF INCOME TAX BEING AN AUTHORITY MENTI ONED U/S 116 OF THE INCOME TAX ACT, HAS THE POWER TO RECTIFY AN OBVIOUS MISTAKE (E ITHER OF FACT OR OF LAW) IN ANY ORDER PASSED BY HIM PROVIDED IT IS ESTABLISHED THAT THE M ISTAKE IS ONE APPARENT FROM RECORDS. IN THE INSTANT CASE. THE FINDINGS OF THE CIT(APPEAL S), MY PREDECESSOR IN OFFICE, ARE NOT SUPPORTED BY THE FINDING NOTED BY THE ASSESSING OFF ICER HIMSELF IN HIS REMAND REPORT DATED 10.05.2010 THE DETAILS OF WHICH HAD ALL ALONG BEEN A PART OF THE DEPARTMENTAL RECORDS. SO, I AM OF THE OPINION THAT THERE IS A MISTAKE APP ARENT IN THE APPELLATE ORDER DATED 26- 8-2009 PASSED IN THIS CASE IN ASCERTAINING THE CORR ECT FACTUAL POSITION RELATING TO PAYMENT OF TAX INTEREST MADE BY THE APPELLANT/ APPL ICANT ON THE DISCLOSURE OF INCOME MADE BY HIM IN COURSE OF THE SEARCH. SUCH MISTAKE N EEDS TO BE RECTIFIED IN THE INTEREST OF JUSTICE AS WELL AS IN TERMS OF SECTION 154 OF THE A CT SINCE ALL TAXES HAVING BEEN PAID BY THE APPELLANT/APPLICANT, HE SATISFIED THE REQUIREME NTS OF AVAILING ITSELF OF THE IMMUNITY GRANTED AS PER EXPLANATION (5) U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. THEREFORE, THE PRAYER FOR RECTIFICATION U/S 154 OF THE ACT 27 1 (L)( C) OF THE INCOME TAX ACT, 1961. THEREFORE, THE PRAYER FOR RECTIFICATION U/S 154 OF THE ACT IS ALLOWED ON MERIT BY THIS COMBINED ORDER FOR ALL THE ASSESSMENT YEARS NAMELY 2001-02, 2002-03, 2004-05 AND 2005-06. SUCH RECTIFICATION HAS THE EFFECT OF ALLOW ING THE APPEAL ALSO FOR ALL THE FOUR ASSESSMENT YEARS WHICH WAS DISMISSED PREVIOUSLY BY THE ORDER DATED 26-8-2009 ON AN APPARENTLY ERRONEOUS FINDING OF FACT. 16. THIS ORDER OF CIT(A) WAS PASSED ON 26.05.2010. AGGRIEVED BY THE ORDER OF CIT(A) DATED 26.05.2010 PASSED U/S 154 OF THE ACT THE REVENUE HAS PREFERRED THESE APPEALS BEING 1494 TO 1497/KOL/2010 FOR THE TRIBUNA L. 17. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED CO UNSEL FOR THE ASSESSEE AND THE LEARNED DR. THE FIRST AND PRINCIPAL SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE IN THE APPEALS FILED BY THE ASSESSEE IS WI TH REGARD TO THE SATISFACTION OF ALL THE CONDITIONS UNDER EXPLANATION (5) TO SECTION 271 OF THE ACT. FOR THE SAKE OF EASY UNDERSTANDING OF THE CONTENTIONS, EXPLN.5 TO SEC.27 1 IS EXTRACTED BELOW: 9 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 EXPLANATION 5. WHERE IN THE COURSE OF A SEARCH UNDER SECTION 132, THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELL ERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THA T SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HIS INCOME, ( A ) FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF THE SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR HAS NOT BEEN FURNISH ED BEFORE THE SAID DATE OR, WHERE SUCH RETURN HAS BEEN FURNISHED BEFORE THE SAI D DATE, SUCH INCOME HAS NOT BEEN DECLARED THEREIN ; OR ( B ) FOR ANY PREVIOUS YEAR WHICH IS TO END ON OR AFTE R THE DATE OF THE SEARCH, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEARCH , HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE ( C ) OF SUB-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, UNLESS, ( 1 ) SUCH INCOME IS, OR THE TRANSACTIONS RESULTING IN SUCH INCOME ARE RECORDED, ( I ) IN A CASE FALLING UNDER CLAUSE ( A ), BEFORE THE DATE OF THE SEARCH ; AND ( II ) IN A CASE FALLING UNDER CLAUSE ( B ), ON OR BEFORE SUCH DATE, IN THE BOOKS OF ACCOUNT, IF ANY, MA INTAINED BY HIM FOR ANY SOURCE OF INCOME OR SUCH INCOME IS OTHERWISE DISCLOSED TO THE CHIEF COMMISSIONER OR COMMISSIONER BEFORE THE SAID DATE ; OR ( 2 ) HE, IN THE COURSE OF THE SEARCH, MAKES A STATEME NT UNDER SUB-SECTION (4) OF SECTION 132 THAT ANY MONEY, BULLION, JEWELLERY OR O THER VALUABLE ARTICLE OR THING FOUND IN HIS POSSESSION OR UNDER HIS CONTROL, HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR IN H IS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN SU B-SECTION (1) OF SECTION 139, AND ALSO SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS THE TAX, TOGETHER WITH INTERE ST, IF ANY, IN RESPECT OF SUCH INCOME. IN THE PRESENT APPEAL WE ARE CONCERNED WITH CLAUSE (2) OF EXPLN.5 TO SEC.271 OF THE ACT. IN THIS REGARD IT WAS BROUGHT TO OUR NOTICE T HAT IN THE ORDER DATED 26.8.2009 PASSED BY THE CIT(A) WHICH IS IMPUGNED IN THE APPEA LS FILED BY THE ASSESSEE, THE SATISFACTION OF THE CONDITION THAT (A) INCOME DECLA RED IN THE RETURN OF INCOME FILED U/S.153A OF THE ACT, HAS BEEN DISCLOSED IN A STATEM ENT U/S 132(4) OF THE ACT. AND (B) IN SUCH STATEMENT THE ASSESSEE SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED HAS BEEN ACCEPTED BY THE CIT(A) AND THE RE VENUE HAS NOT CHALLENGED THE SAID FINDING. THE CIT(A) IN THE ORDER DATED 26.05.2010 OF CIT(A)-CENTRAL-III, KOLKATA HAS ACCEPTED THAT TAXES DUE ON THE INCOME SO DISCLOSED TOGETHER WITH INTEREST ARE PAID BY THE ASSESSEE. IN THE APPEAL FILED BY THE REVENUE AG AINST THE AFORESAID ORDER OF CIT(A) 10 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 DATED 26.5.2010, THE REVENUE CANNOT CHALLENGE ANY O THER FINDING EXCEPT THE SPECIFIC FINDING OF THE CIT(A) IN THE SAID ORDER WITH REGARD TO PAYMENT OF TAXES ON THE INCOME DISCLOSED. IT WAS SUBMITTED BY HIM THAT THE CHALLE NGE BY THE REVENUE IN THEIR APPEAL WAS GENERAL AND NO SPECIFIC INSTANCES AS TO WHY THE ASSESSEE WAS NOT ENTITLED TO SUCH IMMUNITY HAS NOT BEEN BROUGHT OUT IN THE GROUNDS OF APPEAL. IT WAS FURTHER SUBMITTED BY HIM THAT THE TIME AT WHICH THE TAX HAD TO BE PAI D HAS NOT BEEN SET OUT UNDER EXPLANATION (5) TO SECTION 271 OF THE ACT. THE HON BLE SUPREME COURT , HOWEVER, IN THE CASE OF ACIT VS M/S. GEBILAL KANHAILAL HUF IN C IVIL APPEAL NO.636 OF 2005 (SC) JUDGMENT DATED 04.09.2012 HAS TAKEN A VIEW TH AT SINCE NO TIME LIMIT FOR PAYMENT OF TAX WAS PRESCRIBED UNDER CLAUSE (2) THE ONLY REQUIREMENT WAS THAT AN ASSESSEE TO GET THE IMMUNITY HAS TO PAY TAX AFTER T HE SEARCH PROCEEDINGS ALONG WITH INTEREST UP TO THE DATE OF PAYMENT OF TAX. THE FOLL OWING OBSERVATION OF THE HONBLE SUPREME COURT WERE BROUGHT TO OUR ATTENTION :- HOWEVER, NO TIME LIMIT FOR PAYMENT OF SUCH TAX STO OD PRESCRIBED UNDER CLAUSE (2). THE ONLY REQUIREMENT STIPULATED IN THE THIRD CONDITION WAS FOR THE ASSESSEE TO 'PAY TAX TOGETHER WITH INTEREST'. IN THE PRESENT CASE, THE T HIRD CONDITION ALSO STOOD FULFILLED. THE ASSESSEE HAS PAID TAX WITH INTEREST UPTO THE DATE O F PAYMENT. THE ONLY CONDITION WHICH WAS REQUIRED TO BE FULFILLED FOR GETTING THE IMMUNI TY, AFTER THE SEARCH PROCEEDINGS GOT OVER, WAS THAT THE ASSESSEE HAD TO PAY THE TAX TOGE THER WITH INTEREST IN RESPECT OF SUCH UNDISCLOSED INCOME UPTO THE DATE OF PAYMENT. CLAUSE (2) DID NOT PRESCRIBE THE TIME LIMIT WITHIN WHICH THE ASSESSEE SHOULD PAY TAX ON INCOME DISCLOSED IN THE STATEMENT UNDER SECTION 132(4). 18. THE LEARNED DR HOWEVER SUBMITTED THAT THE PAYME NT OF TAX SHOULD BE ON OR BEFORE FILING OF THE RETURN U/S 153A OF THE ACT OR AT ANY RATE BEFORE CONCLUSION OF THE ASSESSMENT PROCEEDINGS. 19. APART FROM THE ABOVE THE SUBMISSION OF THE LEAR NED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT NO PROPER SATISFACTION HAS BEEN RECORDED BY THE AO IN THE ORDER OF ASSESSMENT. IT WAS ALSO SUBMITTED THAT IN THE SHOW CAUSE NOTICE ISSUED U/S 274 OF THE ACT, THE AO HAS NOT STRUCK OFF THE IRRELEVANT PORTI ON. IN OTHER WORDS IT WAS SUBMITTED THAT THE SHOW CAUSE NOTICE U/S 274 OF THE ACT IS NO T CLEAR AS TO WHETHER PENALTY IS BEING IMPOSED FOR CONCEALING PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS 11 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 OF INCOME. IN THIS REGARD OUR ATTENTION WAS DRAWN T O THE DECISION OF ITAT KOLKATA BENCH IN THE CASE OF SATYANANDA ACHARIYA BISWAS VS DCIT IN ITA NO.05/KOL/2010 FOR A.Y.2003-04 DATED 02.12.2015 WHEREIN IT WAS HEL D THAT SUCH DEFECT IN THE SHOW CAUSE NOTICE U/S.274 OF THE ACT RENDERS THE ORDER I MPOSING PENALTY ILLEGAL. 20. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE THE CIT(A) HAS IN THE ORIGINAL ORDER DATED 26.08.2009 ACCEPTED THAT THE ASSESSEE SATISFIES ALL THE CONDITIONS FOR GRANT OF IMMUNITY UNDER EXPLANATION (5) TO SECTION 271 OF THE ACT EXC EPT THE CONDITION WITH REGARD TO PAYMENT OF TAX WITH INTEREST. IN THE ORDER DATED 26 .8.2009 PASSED BY THE CIT(A) WHICH IS IMPUGNED IN THE APPEALS FILED BY THE ASSESSEE, T HE SATISFACTION OF THE CONDITION THAT (A) INCOME DECLARED IN THE RETURN OF INCOME FILED U /S.153A OF THE ACT, HAS BEEN DISCLOSED IN A STATEMENT U/S 132(4) OF THE ACT. AND (B) IN SUCH STATEMENT THE ASSESSEE SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED HAS BEEN ACCEPTED BY THE CIT(A) AND THE REVENUE HAS NOT CHALLENGED THE SAID FINDING. IN THE ORDER DATED 26.05.2010 PASSED U/S 154 OF THE ACT, THE CIT(A) HA S FOUND THAT THE CONDITION WITH REGARD TO PAYMENT OF TAXES ON INCOME DECLARED IN TH E RETURN OF INCOME FILED U/S.153A OF THE ACT WAS ALSO SATISFIED BY THE ASSESSEE. THE GRIEVANCE OF THE REVENUE AGAINST THE ORDER U/S 154 OF THE ACT CAN THEREFORE BE ONLY REST RICTED TO THE ISSUE WITH REGARD TO WHETHER THE ASSESSE HAS PAID TAX AND INTEREST ON TH E INCOME DISCLOSED AS REQUIRED UNDER EXPLANATION (5) TO SECTION 271 OF THE ACT. ON THIS ISSUE THE ONLY OBJECTION OF THE REVENUE IS THAT THE PAYMENT OF TAXES OUGHT TO HAVE BEEN MADE AT THE TIME OF FILING THE RETURN OF INCOME OR IN ANY EVENT BEFORE CONCLUSION OF THE ASSESSMENT PROCEEDINGS. THE HONBLE SUPREME COURT HOWEVER IN THE CASE OF ACIT V S M/S. GEBILAL KANHAIALAL HUF (SUPRA) HAS TAKEN A VIEW THAT THE PAYMENT OF TAX SH OULD BE AFTER THE SEARCH PROCEEDINGS AND THERE IS NO TIME LIMIT WITHIN WHICH THE SAID PAYMENT HAS TO BE MADE. IN VIEW OF THE AFORESAID DECISION OF THE HONBLE SU PREME COURT, WE ARE OF THE VIEW THAT THERE IS NO MERIT IN THE APPEALS FILED BY THE REVENUE. 12 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 21. AS FAR AS THE APPEALS FILED BY THE ASSESSEE AR E CONCERNED WE FIND THAT THE FACTS OF THE ASSESSEES CASE ARE IDENTICAL TO THE DECISION I N THE CASE OF SATYANANDA ACHARIYA BISWAS VS DCIT RENDERED BY ITAT KOLKATA BENCH (SUPR A). IN THE PRESENT CASE AS WELL AS IN THE CASE OF SATYANANDA ACHARIYA BISWAS (SUPRA ), THE AO IN THE ORDER OF ASSESSMENT ACCEPTED THE OFFER OF ADDITIONAL INCOME TO TAX AS DECLARED IN THE RETURN OF INCOME FILED U/S.153 OF THE ACT AND THERE IS NO SPE CIFIC COMMENTS ON THE CONDUCT OF THE ASSESSEE. SO ALSO THE SHOW CAUSE NOTICE U/S.27 4 OF THE ACT DID NOT CONTAIN SPECIFIC CHARGE AS TO WHETHER THE ASSESSEE WAS GUIL TY OF FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALING PARTICULARS OF INCOME. THE RULING IN THE CASE OF SATYANANDA ACHARIYA BISWAS (SUPRA) WOULD THEREFORE APPLY TO THE PRESENT APPEALS BY THE ASSESSEE AS WELL. THE FOLLOWING WERE THE OBSER VATIONS OF THE TRIBUNAL IN THE CASE OF SATYANANDA ACHARIYA BISWAS (SUPRA) ON THE EFFECT OF NOT RECORDING SATISFACTION REGARDING CONCEALMENT IN THE ORDER OF ASSESSMENT AS WELL AS DEFECTIVE NOTICE U/S.274 OF THE ACT. : 6. WE SHALL NOW DEAL WITH THE QUESTION WHETHER PRO PER SATISFACTION WAS ARRIVED AT BY THE AO FOR INITIATING PENALTY PROCEEDINGS U/S .271(1)( C ) IN THE COURSE OF CONCLUDING THE ASSESSMENT PROCEEDINGS WHEREIN THE A DDITIONS IN RESPECT OF WHICH PENALTY WAS IMPOSED WERE MADE. 7. ON THE ABOVE ISSUE THE FIRST ASPECT WHICH WE NOT ICE IS THAT IN THE ORDER OF ASSESSMENT, WHICH WE HAVE EXTRACTED IN THE EARLIER PART OF THIS ORDER, NOWHERE SPELLS OUT OR INDICATES THAT THE AO WAS OF THE VIEW THAT THE ASSESSEE WAS G UILTY OF EITHER CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF I NCOME. THE OFFER TO TAX OF INCOME BY THE ASSESSEE HAS JUST BEEN ACCEPTED. IT IS NO DOUB T TRUE THAT IT IS NOT THE REQUIREMENT OF THE LAW THAT THE SATISFACTION HAS TO BE RECORDED IN A PARTICULAR MANNER, ESPECIALLY AFTER THE INTRODUCTION OF THE PROVISIONS OF SEC.271(1B) O F THE ACT WITH RETROSPECTIVE EFFECT FROM 1.4.1989. NEVERTHELESS, AS LAID DOWN BY THE H ONBLE DELHI HIGH COURT IN THE CASE OF MS.MADHUSHREE GUPTA (SUPRA), THE POSITION OF LA W BOTH PRE AND POST SEC.271(1B) OF THE ACT IS SIMILAR, INASMUCH, THE AO WILL HAVE TO A RRIVE AT A PRIMA FACIE SATISFACTION DURING THE COURSE OF PROCEEDINGS WITH REGARD TO THE ASSESSEE HAVING CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS, BEFORE HE INITIATES PENALTY PROCEEDINGS. PRIMA FACIE SATISFACTION OF THE AO THAT THE CASE MAY DESERVE THE IMPOSITION OF PENALTY SHOULD BE DISCERNIBLE FROM TH E ORDER PASSED DURING THE COURSE OF THE PROCEEDINGS. AT THE STAGE OF INITIATION OF PENA LTY PROCEEDING THE ORDER PASSED BY THE AO NEED NOT REFLECT SATISFACTION VIS-A-VIS EACH AND EVERY ITEM OF ADDITION OR DISALLOWANCE IF OVERALL SENSE GATHERED FROM THE ORD ER IS THAT A FURTHER PROGNOSIS IS CALLED FOR. THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF MAK DATA (P) 13 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 LTD. (SUPRA) HAS TO BE UNDERSTOOD IN THE CONTEXT OF THE FACTS OF THE SAID CASE. THE RELEVANT PORTION OF THE JUDGMENT IN THE AFORESAID C ASE, READS THUS: 9. WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SURRENDER WAS MADE IN V IEW OF DETECTION MADE BY THE AO IN THE SEARCH CONDUCTED IN THE SISTER CONCERN OF THE A SSESSEE. IN THAT SITUATION, IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NOTICED THAT CERTAIN DOC UMENTS COMPRISING OF SHARE APPLICATION FORMS, BANK STATEMENTS, MEMORANDUM OF A SSOCIATION OF COMPANIES, AFFIDAVITS, COPIES OF INCOME TAX RETURNS AND ASSESS MENT ORDERS AND BLANK SHARE TRANSFER 8 DEEDS DULY SIGNED, HAVE BEEN IMPOUNDED I N THE COURSE OF SURVEY PROCEEDINGS UNDER SECTION 133A CONDUCTED ON 16.12.2 003, IN THE CASE OF A SISTER CONCERN OF THE ASSESSEE. THE SURVEY WAS CONDUCTED M ORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN TH E INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOULD HA VE FILED THE RETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERE D LATER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLEAR T HAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IT IS THE STATUTORY DUTY O F THE ASSESSEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN TH E SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEAR TO YEAR. THE AO, IN OUR VIEW, HAS RECORDED A CATEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED TRUE PARTICULARS OF INCOME A ND IS LIABLE FOR PENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. 10. THE AO HAS TO SATISFY WHETHER THE PENALTY PROCE EDINGS BE INITIATED OR NOT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE AO IS NOT REQUIRED TO RECORD HIS SATISFACTION IN A PARTICULAR MANNER OR REDUCE IT IN TO WRITING. 8. THE REVENUE PLACES RELIANCE ONLY ON THE S ENTENCE APPEARING IN PARA-10 OF THE JUDGMENT WITHOUT READING IT IN THE CONTEXT OF THE O BSERVATIONS IN THE LAST PORTION OF PARA-9 OF THE SAID JUDGMENT. THEREFORE EVEN THE HO NBLE SUPREME COURTS DECISION SUGGESTS THAT THE SATISFACTION NEED NOT BE RECORDED IN A PARTICULAR MANNER BUT FROM A READING OF THE ASSESSMENT ORDER AS A WHOLE SUCH SAT ISFACTION SHOULD BE CLEARLY DISCERNIBLE. IF THE AO ACCEPTS ALL THE CONTENTIONS OF THE ASSESSEE AND THE OFFER OF INCOME THAT HAS NOT BEEN DECLARED IN THE RETURN OF INCOME TO TAX WITHOUT INDICATING EITHER DIRECTLY OR INDIRECTLY THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME, IT CANN OT BE SAID THAT SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS IS DISCERNIBLE FR OM THE ORDER OF ASSESSMENT. IF THE ASSESSEE IN GOOD FAITH OFFERS INCOME TO TAX VOLUNTA RILY PRIOR TO ANY POSITIVE DETECTION BY THE AO, SUCH VOLUNTARY OFFER CANNOT BE TAKEN ADVANT AGE OF BY THE AO TO INITIATE PENALTY PROCEEDINGS AGAINST THE ASSESSSEE WITHOUT SPECIFYIN G THE REASONS WHY PENALTY PROCEEDINGS ARE INITIATED U/S.271(1) ( C) OF THE AC T. IN THE PRESENT CASE, WE HAVE READ THE ORDER OF ASSESSMENT AS A WHOLE AND ARE SATISFIE D THAT SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS IS NOT DISCERNIBLE FROM THE ORD ER OF ASSESSMENT. WE THEREFORE CONCUR WITH THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSSEE THAT INITIATION OF PENALTY PROCEEDINGS WAS NOT PROPER IN THE PRESENT C ASE AND ON THAT GROUND THE IMPOSITION OF PENALTY U/S.271(1)( C) OF THE ACT IS UNSUSTAINABLE. 14 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 9. THE NEXT ARGUMENT THAT THE SHOW CAUSE NOTI CE 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 O R CONCEALING PARTICULARS OF SUCH INCOME. ON THIS ASPECT WE FIND THAT IN THE SHOW C AUSE NOTICE U/S.274 OF THE ACT THE AO HAS NOT STRUCK OUT THE IRRELEVANT PART. IT IS THER EFORE NOT SPELT OUT AS TO WHETHER THE PENALTY PROCEEDINGS ARE SOUGHT TO BE LEVIED FOR FU RNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALING PARTICULARS OF SUCH INCOME. 9.1. THE HONBLE KARNATAKA HIGH COURT IN THE CASE O F CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 565 (KARN), HA S HELD THAT NOTICE U/S. 274 OF THE ACT SHOULD SPECIFICALLY STATE AS TO WHETHER PENALTY IS BEING PROPOSED TO BE IMPOSED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISH ING INACCURATE PARTICULARS OF INCOME. THE HONBLE HIGH COURT HAS FURTHER LAID DO WN THAT CERTAIN PRINTED FORM WHERE ALL THE GROUNDS GIVEN IN SECTION 271 ARE GIVEN WOUL D NOT SATISFY THE REQUIREMENT OF LAW. THE COURT HAS ALSO HELD THAT INITIATING PENALTY PRO CEEDINGS 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 BE HELD AS BAD IN LAW AND LIABLE TO BE QUASHED. 9.2. THE HONBLE KARNATAKA HIGH COURT IN THE CASE O F CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) HAS LAID DOWN T HE FOLLOWING 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 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 I T 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 CIVIL LIABILITY, I N FACT, IT IS PENAL IN NATURE. IN EITHER EVENT, THE PERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED IN SECTION 271 SHOULD BE MADE KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEND I MPOSING 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. 15 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENC ES, THAT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF I NCOME. 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 PROCEEDIN GS 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 GROUNDS MENTIONED IN SECTION 271(1)(C) WHEN IT IS A SINE QUA NON FOR INITIATION OR PROCEEDINGS, THE PENALTY PROCEEDINGS SHOULD BE CONF INED ONLY TO THOSE GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECIFICALLY 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. IT IS NOT OPEN T O THE AUTHORITY, AT THE TIME OF IMPOSING PENALTY TO IMPOSE PENALTY ON THE GROUNDS OTHER THAN WHAT ASSESSEE WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENALTY PR OCEEDINGS MAY BE VALID AND LEGAL, THE FINAL ORDER IMPOSING PENALTY WOULD OFFEND PRINCIPLE S OF NATURAL JUSTICE AND CANNOT BE SUSTAINED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROU ND, THE PENALTY SHOULD ALSO BE IMPOSED ON THE SAME GROUND. WHERE THE BASIS OF THE INITIATION OF PENALTY PROCEEDINGS IS NOT IDENTICAL WITH THE GROUND ON WHI CH 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 IN THE HANDS OF THE AUTHORITY IMPOSING THE PENALTY AT THE TIME THE ORDE R WAS PASSED AND FURTHER DISCOVERY OF FACTS SUBSEQUENT TO THE IMPOSITION OF PENALTY CA NNOT VALIDATE 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 TOTAL IN COME UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICULARS OF INCOME ARE DIF FERENT. 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 292 ITR 11 AT PAGE 19 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURATE PAR TICULARS 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 REPORTED IN 171 TAXMAN 156, HAS HELD THAT LEVY OF PENALTY HA S 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 INVOKE THE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. SIMILAR IS T HE CASE FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE STANDARD PROFORMA WITHOU T STRIKING OF THE RELEVANT CLAUSES WILL LEAD TO AN INFERENCE AS 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. 16 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 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 AUTHORIT Y OR REVISIONAL 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 FRO M THE SAID ORDER WHICH WOULD BY A LEGAL FICTION CONSTITUTE CONCEALMENT BECAUSE O F DEEMING PROVISION. G) EVEN IF THESE CONDITIONS DO NOT EXIST IN THE AS SESSMENT ORDER PASSED, AT LEAST, A DIRECTION TO INITIATE PROCEEDINGS UNDER SE CTION 271(L)(C) IS A SINE QUA NON FOR THE ASSESSMENT OFFICER TO INITIATE THE PROCEEDI NGS BECAUSE 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 ITSELF WOULD NOT BE SUFFICIENT FOR THE AUTHORITIES EITHER TO INITIATE PENALTY PROC EEDINGS OR IMPOSE PENALTY, UNLESS IT IS DISCERNIBLE FROM THE ASSESSMENT ORDER THAT, I T IS ON ACCOUNT OF SUCH UNEARTHING OR ENQUIRY CONCLUDED BY AUTHORITIES IT H AS RESULTED IN PAYMENT OF SUCH TAX OR SUCH TAX LIABILITY CAME TO BE ADMITTED AND I F NOT IT WOULD HAVE ESCAPED FROM TAX NET AND AS OPINED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 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 T HE EXPLANATION OFFERED IS NOT BONAFIDE, 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 BONAFIDE AND ALL FACTS RELATING TO THE SAME AND MATERIAL TO THE 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. 17 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 O) IF THE ASSESSING OFFICER HAS NOT RECORDED ANY S ATISFACTION OR HAS NOT ISSUED ANY DIRECTION TO INITIATE PENALTY PROCEEDING S, IN APPEAL, IF THE APPELLATE AUTHORITY RECORDS SATISFACTION, THEN THE PENALTY PR OCEEDINGS HAVE TO BE INITIATED BY THE APPELLATE AUTHORITY AND NOT THE ASSESSING AU THORITY. P) NOTICE UNDER SECTION 274 OF THE ACT SHOULD SPEC IFICALLY STATE THE GROUNDS MENTIONED IN SECTION 271(1)(C), I.E., WHETH ER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INCORRECT PARTICULARS O F 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 JUST ICE IS OFFENDED. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED TO TH E 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 EM ANATE 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 INCORREC T PARTICULARS' WOULD NOT OPERATE AS RES JUDICATA IN THE PENALTY PROCEEDINGS. IT IS OPEN TO THE ASSESSEE TO CONTEST THE SAID PROCEEDINGS ON MERITS. HOWEVER, TH E VALIDITY OF THE ASSESSMENT OR REASSESSMENT IN PURSUANCE OF WHICH PENALTY IS LEVIE D, CANNOT BE THE SUBJECT MATTER OF PENALTY PROCEEDINGS. THE ASSESSMENT OR REASSESSMENT CANNOT BE DECLARED A S INVALID IN THE PENALTY PROCEEDINGS. (EMPHASIS SUPPLIED) 9 .3. 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 DEFECT IVE AS IT DOES NOT SPELL OUT THE GROUNDS ON WHICH THE PENALTY IS SOUGHT TO BE IMPOSED. FOLL OWING THE DECISION OF THE HONBLE KARNATAKA HIGH COURT, WE HOLD THAT THE ORDERS IMPOS ING PENALTY IN ALL THE ASSESSMENT YEARS HAVE TO BE HELD AS INVALID AND CONSEQUENTLY P ENALTY IMPOSED IS CANCELLED. 9.4. FOR THE REASONS GIVEN ABOVE, WE HOLD THAT LEVY OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED. WE THEREFORE CANCEL THE ORDER S IMPOSING PENALTY ON THE ASSESSEE AND ALLOW THE APPEAL BY THE ASSESSEE. IN VIEW OF O UR ABOVE CONCLUSIONS ON THE ISSUE OF NOT RECORDING OF PROPER SATISFACTION AND THE DEFECT IN SHOW CAUSE NOTICE U/S.274 OF THE ACT, WE ARE NOT DEALING WITH THE OTHER ARGUMENTS MA DE ON MERITS OF THE ORDER IMPOSING PENALTY ON THE ASSESSSEE. 18 ITA NOS.1797 TO 1800/KOL/2009&1494 TO 1497KOL/2010- AMAR NATH SHROFF A.Y.2001-02 TO 200203 & 2004-05&2005-06 22. SINCE THE FACTS ARE IDENTICAL TO THE FACTS OF T HE AFORESAID CASE, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL WE HOLD THAT PENALTY LEVIED U/S 271(1)(C) OF THE ACT IS LIABLE TO BE CANCELLED ON THE GROUND THAT TH ERE WAS NO PROPER RECORDING OF SATISFACTION IN THE ORDER OF ASSESSMENT AND THAT TH E SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT SATISFY THE SPECIFIC CHARGE AGAINST TH E ASSESSEE. CONSEQUENTLY THE ORDERS IMPOSING PENALTY FOR ALL THE FOUR ASSESSMENT YEARS ARE HELD TO BE INVALID AND ILLEGAL AND ARE HEREBY CANCELLED. 23. IN THE RESULT ITA NOS.1797 TO 1800/KOL/2009 ARE ALLOWED WHILE ITA NOS.1494 TO 1497/KOL/2010 ARE DISMISSED. O RDER PRONOUNCED IN THE COURT ON 02.03.2016 SD/- SD/- [WASEEM AHMED ] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 02.03.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.AMAR NATH SHROFF, 68/2, HARISH MUKHERJEE ROAD, KO LKATA-700025. 2.D.C.I.T., CENTRAL CIRCLE-1, KOLKATA 3. CIT(A)-CENTRAL-III, KOLKATA 4. CIT-CENTRAL-III, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, ASST. REGISTRAR, ITAT, KOLKATA BENCHES