Sri Chandan Das, Kolkata V. ITO, WD-24(3), KOLKATA, Kolkata

ITA 1500/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0837 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Peak credit; Question of law; Initiation of penalty proceedings
• Section: 69; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & HONBLE S RI M.BALAGANESH, AM] I.T.A NO.1500/KOL/201 4 ASSESSMENT YEAR : 2009-1 0 CHANDAN DAS -VS.- ITO WARD -24(3), KOLKATA KOLKATA [PAN : ADOPD6585G] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SUNI L SURANA, FCA FOR THE RESPONDENT : SHRI DAVID Z CHAWNGTHU, SR. DR DATE OF HEARING : 28.11.2017 DATE OF PRONOUNCEMENT : 06.12.2017 ORDER PER M.BALAGANESH, AM THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER DATED 20.5.2014 OF CIT(A)-XXIV, KOLKATA RELATING TO A.Y.2009-10. 2. IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE ORDER OF CIT(A) WHEREBY THE CIT(A) CONFIRMED THE ORDER OF AO IMPOSING PENALTY O N THE ASSESSEE U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (ACT). 3. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY U/S 271(1)(C) OF THE ACT WAS IMPOSED ON THE ASSESSEE BY THE LD AO ARE AS FOLLOWS :- THE ASSESSEE IS AN INDIVIDUAL. DURING THE COURSE O F ASSESSMENT PROCEEDINGS, THE ASSESSEE ADMITTED THAT HE ACCEPTED MONEY FROM CLIEN TS FOR THE PURPOSE OF 2 ITA NO.1500/KOL/2014 CHANDAN DAS A.YR.2009-10 2 CUSTOMS DUTY PAYMENT IN ORDER TO CLEAR THE GOODS FR OM CUSTOM HOUSE ON BEHALF OF HIS CLIENTS AND THEREBY EARNED COMMISSION INCOME OF RS 21,356/-WHICH HE HAD NOT DISCLOSED IN THE RETURN FILED. IN RESPEC T OF ITS DETAILS, THE ASSESSEE SUBMITTED THAT HE HAD DEPOSITED CASH IN HIS BANK AC COUNTS AND SINCE THERE WERE FREQUENT WITHDRAWALS AND DEPOSITS, HE PRAYED FOR TA XABILITY OF THE PEAK BALANCE WHICH WAS ACCORDINGLY DONE BY THE LD AO. IN THE AS SESSMENT COMPLETED U/S.143(3) OF THE ACT ON 18.11.2011 , THE LD AO MAD E THE FOLLOWING ADDITIONS IN THE ASSESSMENT:- A) ADDITION TOWARDS UNDISCLOSED COMMISSION INCOME RS 21,356/- B) ADDITION TOWARDS UNEXPLAINED CASH CREDIT BASED O N PEAK CREDIT BALANCE - RS 12,61,367/- IN RESPECT OF THE AFORESAID ADDITIONS MADE IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD AO INITIATED PENALTY PROCEEDING S U/S 271(1)(C) OF THE ACT. THE INITIATION OF PENALTY PROCEEDINGS WAS NOT MADE WITH REFERENCE TO ANY SPECIFIC ITEM OF ADDITION. IN THE ORDER OF ASSESSMENT, THE LD AO HAS OBSERVED AS FOLLOWS: PENALTY PROCEEDINGS U/S 271(1)(C ) HAVE BEEN INITI ATED SEPARATELY 4. IN THE PENALTY PROCEEDINGS THE ASSESSEE TRIED T O EXPLAIN THAT WHEN THE MISTAKES WERE POINTED OUT TO HIM, THE ADDITIONS WERE ACCEPTE D BY HIM IN THE ASSESSMENT. THE ASSESSEE THUS PLEADED THAT THERE WAS NO INTENTI ON TO CONCEAL OR FURNISH PARTICULARS OF INCOME. THIS EXPLANATION WAS NOT A CCEPTED IN THE PENALTY PROCEEDINGS AND PENALTY U/.S 271(1)(C) OF THE ACT W AS IMPOSED ON THE ASSESSEE BY THE LD AO. THE ORDER OF LD AO WAS CONFIRMED BY T HE LD CITA. AGGRIEVED BY THE ORDER OF LD CITA, THE ASSESSEE HAS FILED THE PR ESENT APPEAL BEFORE THE TRIBUNAL. 3 ITA NO.1500/KOL/2014 CHANDAN DAS A.YR.2009-10 3 5. THE LD AR SUBMITTED BEFORE US THAT THE SHOW CA USE NOTICE ISSUED U/S 274 OF THE ACT BEFORE IMPOSING PENALTY DOES NOT CONTAIN TH E SPECIFIC CHARGE AGAINST THE ASSESSEE NAMELY AS TO WHETHER THE ASSESSEE WAS GUIL TY OF HAVING CONCEALED PARTICULARS OF INCOME OR HAVING FURNISHED INACCURAT E PARTICULARS OF INCOME. A COPY OF THE SHOW CAUSE NOTICE U/S 274 OF THE ACT WA S FILED BEFORE US AND PERUSAL OF THE SAME REVEALS THAT AO HAS NOT STRUCK OUT THE IRRELEVANT PORTION IN THE SHOW CAUSE NOTICE AND THEREFORE THE SHOW CAUSE NOTICE DO ES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER THE CHARGE IS OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THE SAME IS REPRODUCED FOR THE PURPOSE OF READY REFERENCE: HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE LD AO HAD MERELY MADE A TICK MARK ON THIS COLUM N IN THE PENALTY NOTICE. 6. THE LD AR DREW OUR ATTENTION TO THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN THE HONBLE KARNATAKA HIGH COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTON AN D GINNING FACTORY (2013) 359 ITR 565 TOOK A VIEW THAT IMPOSING OF PENALTY U/ S 271(1)(C) OF THE ACT IS BAD IN LAW AND INVALID FOR THE REASON THAT THE SHOW CAU SE NOTICE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD AR FURTHER BROUGHT TO OUR NOTICE TH AT AS AGAINST THE DECISION OF 4 ITA NO.1500/KOL/2014 CHANDAN DAS A.YR.2009-10 4 THE HONBLE KARNATAKA HIGH COURT, THE REVENUE PREF ERRED AN APPEAL IN SLP IN CC NO.11485 OF 2016 AND THE HONBLE SUPREME COURT B Y ITS ORDER DATED 05.08.2016 DISMISSED THE SLP PREFERRED BY THE DEPAR TMENT. THE LD AR ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE HONBLE B OMBAY HIGH COURT IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 DATED 05.01.2017 WHEREIN THE HONBLE BOMBAY HIGH COURT FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNAT HA COTTON AND GINNING FACTORY (SUPRA) CAME TO THE CONCLUSION THAT IMPOSIT ION OF PENALTY ON DEFECTIVE SHOW CAUSE NOTICE WITHOUT SPECIFYING THE CHARGE AGA INST THE ASSESSEE CANNOT BE SUSTAINED. OUR ATTENTION WAS ALSO DRAWN TO THE DECI SION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SUVAPRASANNA BHATTA CHARYA VS ACIT IN ITA NO.1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS BEEN FOLLOWED BY THIS TRIBUNAL. 7. THE LD DR SUBMITTED THAT THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF DR.SYAMAL BARAN MONDAL VS. CIT (2011) 244 CTR 631 ( CAL) HAS TAKEN A VIEW THAT SEC.271 DOES NOT MANDATE THAT THE RECORDING OF SATISFACTION ABOUT CONCEALMENT OF INCOME MUST BE IN SPECIFIC TERMS AND WORDS AND THAT SATISFACTION OF AO MUST REFLECT FROM THE ORDER EITHER WITH EXPRE SSED WORDS RECORDED BY THE AO OR BY HIS OVERT ACT AND ACTION. IN OUR VIEW THI S DECISION IS ON THE QUESTION OF RECORDING SATISFACTION AND NOT IN THE CONTEXT OF SP ECIFIC CHARGE IN THE MANDATORY SHOW CAUSE NOTICE U/S.274 OF THE ACT. THEREFORE RE FERENCE TO THIS DECISION, IN OUR VIEW IS NOT OF ANY HELP TO THE PLEA OF THE REVENUE BEFORE US. 5 ITA NO.1500/KOL/2014 CHANDAN DAS A.YR.2009-10 5 8. THE LD DR RELIED ON THREE DECISIONS OF MUMBAI ITAT VIZ., (I) DHANRAJ MILLS PVT. LTD. VS. ACIT ITA NO.3830 & 3833/MUM/2009 DATE D 21.3.2017; (II) EARTHMOVING EQUIPMENT SERVICE CORPORATION VS. DCIT 22(2), MUMBAI, (2017) 84 TAXMANN.COM 51 (III) MAHESH M.GANDHI VS. ACIT VS . ACIT ITA NO.2976/MUM/2016 DATED 27.2.2017. RELIANCE WAS PLA CED ON TWO DECISIONS OF THE HONBLE BOMBAY HIGH COURT VIZ., (I) CIT VS. KAU SHALYA 216 ITR 660(BOM) AND (II) M/S.MAHARAJ GARAGE & CO. VS. CIT DATED 22. 8.2017. THIS DECISION WAS REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LD DR. THIS IS AN UNREPORTED DECISION AND A COPY OF THE SAME WAS NOT FURNISHED. HOWEVER A GIST OF THE RATIO LAID DOWN IN THE DECISION HAS BEEN GIVEN IN THE WRITTEN NOTE FILED BEFORE US. 9. IN THE CASE OF CIT VS. KAUSHALYA (SUPRA), THE H ONBLE BOMBAY HIGH COURT HELD THAT SECTION 274 OR ANY OTHER PROVISION IN THE ACT OR THE RULES, DO ES NOT EITHER MANDATE THE GIVING OF NOTICE OR ITS ISSUANCE IN A PARTICULAR FORM. PENALTY PROCEEDINGS ARE QUASI-CRIMINAL IN NATURE. SECTION 274 CONTAINS THE PRINCIPLE OF NATURAL JUSTICE OF THE ASSESSEE BEING HEARD BEFORE LEVYING PENALTY. RULES OF NATURAL JUSTICE CANNOT BE IMPRISONED IN ANY STRAIGH T-JACKET FORMULA. FOR SUSTAINING A COMPLAINT OF FAILURE OF THE PRINCIPLES OF NATURAL JUSTICE ON THE GROUND OF ABSENCE OF OPPORTUNITY, IT HAS TO BE ESTABLISHED THAT PREJUDICE IS CAUSED TO THE CONCERNED PERSON BY THE PROCEDURE FOLLOWED. THE ISS UANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE AB OUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING O F THE INACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE ITAT MU MBAI BENCH IN THE CASE OF DHANRAJ MILLS PVT.LTD. (SUPRA) FOLLOWED THE DECISIO N RENDERED BY THE 6 ITA NO.1500/KOL/2014 CHANDAN DAS A.YR.2009-10 6 JURISDICTIONAL HONBLE BOMBAY HIGH COURT IN THE CAS E OF KAUSHALYA (SUPRA) AND CHOSE NOT TO FOLLOW DECISION OF HONBLE KARNATAKA H IGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA). RELIA NCE WAS ALSO PLACED BY THE ITAT MUMBAI IN THIS DECISION ON THE DECISION OF HON BLE PATNA HIGH COURT IN THE CASE OF CIT V. MITHILA MOTOR 'S (P.) LTD. [1984] 149 ITR 751 (PATNA) WHEREIN IT WAS HELD THAT UNDER SECTION 274 OF THE INCOME-TAX ACT, 1961, ALL THAT IS REQUIRED IS THAT THE ASSESSEE SHOULD BE GIVEN AN OP PORTUNITY TO SHOW CAUSE. NO STATUTORY NOTICE HAS BEEN PRESCRIBED IN THIS BEHALF . HENCE, IT IS SUFFICIENT IF THE ASSESSEE WAS AWARE OF THE CHARGES HE HAD TO MEET AN D WAS GIVEN AN OPPORTUNITY OF BEING HEARD. A MISTAKE IN THE NOTICE WOULD NOT I NVALIDATE PENALTY PROCEEDINGS. 10. IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE C ORPORATION (SUPRA), THE ITAT MUMBAI DID NOT FOLLOW THE DECISION RENDERED IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA) FOR THE REASON THAT PENALTY IN THAT CASE WAS DELETED FOR SO MANY REASONS AND NOT SOLELY ON THE BASIS OF DEFECT IN SHOW CAUSE NOTICE U/S.274 OF THE ACT. THIS IS NOT FACTUALLY CORRECT. ONE OF THE PARTIES BEFORE THE GROUP OF ASSESSEES BEFORE THE KARNATAKA HIGH COURT IN THE CA SE OF MANJUNATHA COTTON & GINNING (SUPRA) WAS AN ASSESSEE BY NAME M/S.VEERABH ADRAPPA SANGAPPA & CO., IN ITA NO.5020 OF 2009 WHICH WAS AN APPEAL BY THE REVENUE. THE TRIBUNAL HELD THAT ON PERUSAL OF THE NOTICE ISSUED UNDER SEC TION 271(1)(C) OF THE ACT, IT IS CLEAR THAT IT IS A STANDARD PROFORMA USED BY THE AS SESSING AUTHORITY. BEFORE ISSUING THE NOTICE THE INAPPROPRIATE WORDS AND PARA GRAPHS WERE NEITHER STRUCK OFF NOR DELETED. THE ASSESSING AUTHORITY WAS NOT SURE A S TO WHETHER SHE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD EITHER CONCEALED ITS INCOME OR HAS FURNISHED INACCURATE DETAILS. THE NOTICE IS NOT IN COMPLIANCE WITH THE REQUIREMENT 7 ITA NO.1500/KOL/2014 CHANDAN DAS A.YR.2009-10 7 OF THE PARTICULAR SECTION AND THEREFORE IT IS A VAG UE NOTICE, WHICH IS ATTRIBUTABLE TO A PATENT NON APPLICATION OF MIND ON THE PART OF THE ASSESSING AUTHORITY. FURTHER, IT HELD THAT THE ASSESSING OFFICER HAD MADE ADDITIONS UNDER SECTION 69 OF THE ACT BEING UNDISCLOSED INVESTMENT. IN THE APPEAL, THE SA ID FINDING WAS SET-ASIDE. BUT ADDITION WAS SUSTAINED ON A NEW GROUND, THAT IS UND ER VALUATION OF CLOSING STOCK. SINCE THE ASSESSING AUTHORITY HAD INITIATED PENALTY PROCEEDINGS BASED ON THE ADDITIONS MADE UNDER SECTION 69 OF THE ACT, WHICH W AS STRUCK DOWN BY THE APPELLATE AUTHORITY, THE INITIATED PENAL PROCEEDING S, NO LONGER EXISTS. IF THE APPELLATE AUTHORITY HAD INITIATED PENAL PROCEEDINGS ON THE BASIS OF THE ADDITION SUSTAINED UNDER A NEW GROUND IT HAS A LEGAL SANCTUM . THIS WAS NOT SO IN THIS CASE AND THEREFORE, ON BOTH THE GROUNDS THE IMPUGNED ORD ER PASSED BY THE APPELLATE AUTHORITY AS WELL AS THE ASSESSING AUTHORITY WAS SE T-ASIDE BY ITS ORDER DATED 9TH APRIL, 2009. AGGRIEVED BY THE SAID ORDER, THE REVEN UE FILED APPEAL BEFORE HIGH COURT. THE HONBLE HIGH COURT FRAMED THE FOLLOWING QUESTION OF LAW IN THE SAID APPEAL VIZ., 1. WHETHER THE NOTICE ISSUED UNDER SEC TION 271(1)(C) IN THE PRINTED FORM WITHOUT SPECIFICALLY MENTIONING WHETHER THE PR OCEEDINGS ARE INITIATED ON THE GROUND OF CONCEALMENT OF INCOME OR ON ACCOUNT OF FU RNISHING OF INACCURATE PARTICULARS IS VALID AND LEGAL? 2. WHETHER THE PROC EEDINGS INITIATED BY THE ASSESSING AUTHORITY WAS LEGAL AND VALID? THE HONB LE KARNATAKA HIGH COURT HELD IN THE NEGATIVE AND AGAINST THE REVENUE ON BOT H THE QUESTIONS. THEREFORE THE DECISION RENDERED BY THE ITAT MUMBAI IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE CORPORATION (SUPRA) IS OF NO ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US. 8 ITA NO.1500/KOL/2014 CHANDAN DAS A.YR.2009-10 8 11. IN THE CASE OF M/S.MAHARAJ GARAGE & CO. VS. CI T DATED 22.8.2017 REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LD DR, WHICH IS AN UNREPORTED DECISION AND A COPY OF THE SAME WAS NOT FURNISHED, THE SAME PROPOS ITION AS WAS LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KA USHALYA (SUPRA) APPEARS TO HAVE BEEN REITERATED, AS IS EVIDENT FROM THE EXTRAC TS FURNISHED IN THE WRITTEN NOTE FURNISHED BY THE LD DR BEFORE US. 12. IN THE CASE OF TRISHUL ENTERPRISES ITA NO.384 & 385/MUM/2014, THE MUMBAI BENCH OF ITAT FOLLOWED THE DECISION OF THE H ONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUPRA). 13. IN THE CASE OF MAHESH M.GANDHI (SUPRA) THE MUM BAI ITAT HELD THAT THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE MANJUNATHA COTTON & GINNING (SUPRA) WILL NOT BE APPLICABLE TO THE FACTS OF THAT CASE BECAUSE THE AO IN THE ASSESSMENT ORDER WHILE INITIATING PENALTY PROCE EDINGS HAS HELD THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME AND ME RELY BECAUSE IN THE SHOW CAUSE NOTICE U/S.274 OF THE ACT, THERE IS NO MENTIO N WHETHER THE PROCEEDINGS ARE FOR FURNISHING INACCURATE PARTICULARS OR CONCEALING PARTICULARS OF INCOME, THAT WILL NOT VITIATE THE PENALTY PROCEEDINGS. IN THE PRESENT CASE THERE IS NO WHISPER IN THE ORDER OF ASSESSMENT ON THIS ASPECT. WE HAVE POINTE D OUT THIS ASPECT IN THE EARLIER PART OF THIS ORDER. HENCE, THIS DECISION WILL NOT BE OF ANY ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US. EVEN OTHERWISE THIS DECISION DOES NOT FOLLOW THE RATIO LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN THE CAS E OF MANJUNATHA COTTON & GINNING (SUPRA) IN AS MUCH AS THE RATIO LAID DOWN I N THE SAID CASE WAS ONLY WITH 9 ITA NO.1500/KOL/2014 CHANDAN DAS A.YR.2009-10 9 REFERENCE TO SHOW CAUSE NOTICE U/S.274 OF THE ACT. THE HONBLE COURT DID NOT LAY DOWN A PROPOSITION THAT THE DEFECT IN THE SHOW CAUS E NOTICE WILL STAND CURED IF THE INTENTION OF THE CHARGE U/S.271(1) (C ) IS DISCERNI BLE FROM A READING OF THE ASSESSMENT ORDER IN WHICH THE PENALTY WAS INITIATED . 14. FROM THE AFORESAID DISCUSSION IT CAN BE SEEN T HAT THE LINE OF REASONING OF THE HONBLE BOMBAY HIGH COURT AND THE HONBLE PATNA HIG H COURT IS THAT ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING OF THE INACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUNAL BENCHES AT MUMBAI AND PATNA BEING SUBORDINATE TO THE HONBLE B OMBAY HIGH COURT AND PATNA HIGH COURT ARE BOUND TO FOLLOW THE AFORESAID VIEW. THE TRIBUNAL BENCHES AT BANGALORE HAVE TO FOLLOW THE DECISION OF THE HON BLE KARNATAKA HIGH COURT. AS FAR AS BENCHES OF TRIBUNAL IN OTHER JURISDICTION S ARE CONCERNED, THERE ARE TWO VIEWS ON THE ISSUE, ONE IN FAVOUR OF THE ASSESSEE R ENDERED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTT ON & GINNING (SUPRA) AND OTHER OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA. IT IS SETTLED LEGAL POSITION THAT WHERE TWO VIEWS ARE AVA ILABLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO BE FOLLOWED. WE THEREFORE PREFER TO FOLLOW THE VIEW EXPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA). 15. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE N OTICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 27 4 OF THE ACT DOES NOT STRIKE 10 ITA NO.1500/KOL/2014 CHANDAN DAS A.YR.2009-10 10 OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES , WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD AR FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE THEREFORE HOLD THAT IMPOSITION OF P ENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE CANCELLED. 16. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 06.12.2017 SD/- SD/- [N.V.VASUDEVAN] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 06.12.2017 [SB SR.PS] COPY OF THE ORDER FORWARDED TO: 1.CHANDAN DAS, 68/38, JESSORE ROAD, AMARPALLY, KOLK ATA-700064. 3. ITO WARD 24(3), KOLKATA 4. C.I.T. (A)-XXIV, KOLKATA. 4. C.I.T.-VIII, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SR. PRIVA TE SECRETARY HEAD OF OFFICE/DDO, ITAT, KOLKATA BENCHES