AMS Fashions Private Limited, Kolkata V. CIT, Kolkata 4, Kolkata

ITA 1542/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1420 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 25-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: USMAN
• Keywords: Business income; Opportunity of being heard; Principle of natural justice; Question of law; Assessment record
• Section: 143(3); 69

Judgement Text

ITA NO.1542/KOL/2016 AMS FASHIONS PVT.LTD. A.Y.2011 -12 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE HONBLE SRI.N.V.VASUDEVAN, JM & S RI.WASEEM AHMED AM] I.T.A.NO.1542/KOL/2016 ASSESSMENT YEARS : 2011-12 AMS FASHIONS PRIVATE LIMITED -VS.- C.I.T., KOLKATA -4, [PAN : AACCA 1440 P] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI RAJEEVA KUMAR, ADVOCATE FOR THE RESPONDENT :MS. USMAN, CIT(DR) DATE OF HEARING : 14.02.2018. DATE OF PRONOUNCEMENT : 01.03.2018. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 17.05.2016 OF PRINCIPAL CIT, KOLKATA-3, KOLKATA, RELATING TO A.Y. 2011-12. 2. IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE ORDER OF PRINCIPAL CIT WHEREBY THE CIT IMPOSED PENALTY ON THE ASSESSEE U/S 271(1)(C) O F 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 PRINCIPAL CIT ARE AS FOLLOWS :- THE ASSESSEE IS A COMPANY. AN ORDER OF ASSESSMENT U/S.143(3) OF THE ACT DATED 22.1.2014 IN WHICH THE AO ALLOWED LONG TERM L OSS ON REDEMPTION/SALE OF MUTUAL FUNDS OF RS.2,22,763/- WHILE COMPUTING INCOM E FROM BUSINESS. THE PRINCIPAL CIT IN EXERCISE OF HIS POWERS U/S.263 OF THE ACT IS SUED SHOW CAUSE NOTICE IN RESPECT OF THE LONG TERM LOSS OF RS.2,22,763: THE ASSESSMENT ORDER U/S 143(3) WAS PASSED ON 22.0 1.2014 WHICH WAS FOUND TO CONTAIN ERRORS AS UNDER :- ON PERUSAL OF THE ASSESSMENT RECORDS, IT WAS NOTICE D THAT THE ASSESSEE COMPANY DEBITED AN AMOUNT OF RS.2,22,763/- IN P/L ACCOUNT A S LONG TERM LOSS ON MUTUAL FUND. AS IT WAS EXEMPTED INCOME/LOSS U/S 10(38) OF I.T.ACT, IT WAS NOT REQUIRED TO BE TAKEN IN CONSIDERATION IN COMPUTATION OF TAXA BLE INCOME. MOREOVER, LONG ITA NO.1542/KOL/2016 AMS FASHIONS PVT.LTD. A.Y.2011 -12 2 TERM CAPITAL LOSS WAS NOT ELIGIBLE TO BE ADJUSTED A GAINST BUSINESS INCOME AS PER PROVISIONS OF SECTION 71 OF THE I.T.ACT. AS THE AMO UNT WAS NOT ADDED BACK TO THE INCOME OF THE ASSESSEE COMPANY, IT RESULTED IN UNDE RASSESSMENT OF INCOME OF RS;.2,22,763/- WHICH WAS PREJUDICIAL TO THE INTERES T OF REVENUE. 4. IN REPLY TO THE SHOW CAUSE NOTICE AS ABOVE, THE ASSESSEE SENT A REPLY ADMITTING THAT THE AFORESAID CLAIM OF THE ASSESSEE WAS NOT IN ACCO RDANCE WITH LAW AND THAT IT WAS MADE INADVERTENTLY. THE PRINCIPAL CIT REVISED THE ORDER OF ASSESSMENT OF THE AO DATED 22.1.2014 BY HIS ORDER DATED 18.11.2015 PASSE D U/S.263 OF THE ACT AS FOLLOWS: REGARDING THE CAPITAL LOSS OF RS.2,22,763/- THE AS SESSEE HAS ITSELF SUBMITTED THAT IT WAS INADVERTENTLY ADJUSTED AGAINST BUSINESS INCO ME. CONSIDERING THIS, THE INCOME OF THE ASSESSEE FOR THE A.Y.2011-12 IS ENHAN CED BY RS.2,22,763/-. THE A.O. IS DIRECTED TO PASS CONSEQUENTIAL ORDER. PENAL TY PROCEEDING U/S 271(1)(C) FOR THE ENHANCED INCOME OF RS.2.,22,763/- BEING CONCEAL ED INCOME BEING EXCESSIVE CLAIM OF DEDUCTION IS INITIATED SEPARATELY. 5. IN RESPECT OF THE ADDITION AS MADE ABOVE, THE P RINCIPAL CIT INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. IN THE PENAL TY PROCEEDINGS THE ASSESSEE TRIED TO EXPLAIN THAT THE CLAIM FOR DEDUCTION OF LONG TERM L OSS ON SALE OF MUTUL FUNDS WAS MADE INADVERTENTLY. WHEN THE MISTAKE WAS POINTED O UT IT WAS ACCEPTED BY THE ASSESSEE. THE ASSESSEE THUS PLEADED THAT THERE WAS NO INTENTION 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 WAS IMPOSED O N THE ASSESSEE BY THE PRINCIPAL CIT. 6. AGGRIEVED BY THE ORDER OF PRINCIPAL CIT, THE AS SESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEF ORE US THAT THE SHOW CAUSE NOTICE ISSUED U/S 274 OF THE ACT BEFORE IMPOSING PENALTY D OES NOT CONTAIN THE SPECIFIC CHARGE AGAINST THE ASSESSEE NAMELY AS TO WHETHER THE ASSES SEE WAS GUILTY 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 WAS FILED BEFORE US AND PERUSAL OF THE SAME REVEALS THAT PRINCIPAL CIT HAS NOT STRUCK OUT THE I RRELEVANT PORTION IN THE SHOW CAUSE NOTICE AND THEREFORE THE SHOW CAUSE NOTICE DOES NOT SPECIFY THE CHARGE AGAINST THE ITA NO.1542/KOL/2016 AMS FASHIONS PVT.LTD. A.Y.2011 -12 3 ASSESSEE AS TO WHETHER THE CHARGE IS OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. TH E SAME IS REPRODUCED FOR THE PURPOSE OF READY REFERENCE: HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 8. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTEN TION TO THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS E MERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN THE HONBLE KARNAT AKA HIGH COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTO N AND 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 CAUSE NOTICE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETH ER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THE LD. COUNSEL FURTHER BROUGHT TO OUR NOTICE THAT AS AGAIN ST THE DECISION OF THE HONBLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEA L IN SLP IN CC NO.11485 OF 2016 AND THE HONBLE SUPREME COURT BY ITS ORDER DAT ED 05.08.2016 DISMISSED THE SLP PREFERRED BY THE DEPARTMENT. THE LD. COUNSEL AL SO BROUGHT TO OUR NOTICE THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE 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 KA RNATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY (SU PRA) CAME TO THE CONCLUSION THAT IMPOSITION OF PENALTY ON DEFECTIVE SHOW CAUSE NOTIC E WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT BE SUSTAINED. OUR ATTEN TION WAS ALSO DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS ACIT IN ITA NO.1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS BEEN FOLLOWED BY THE TRIBUNAL. 9. THE LEARNED DR MADE SUBMISSIONS WHICH WERE SIMI LAR TO THE SUBMISSIONS THAT WERE MADE BY THE REVENUE IN THE CASE OF JEETMAL CHO RARIA VS. ACIT ITA NO.956/KOL/2016. ITA NO.1542/KOL/2016 AMS FASHIONS PVT.LTD. A.Y.2011 -12 4 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. SIM ILAR CONTENTIONS PUT FORTH BY THE ASSESSEE AND THE REVENUE WAS CONSIDERED BY ITAT KOL KATA DBENCH IN THE CASE OF JEETMAL CHORARIA VS. ACIT ITA NO.956/KOL/2016 ORDER DATED 1.12.2017 AND THE TRIBUNAL HELD AS FOLLOWS: 7. THE LEARNED DR SUBMITTED THAT THE HONBLE CA LCUTTA HIGH COURT IN THE CASE OF DR.SYAMAL BARAN MONDAL VS. CIT (2011 ) 244 CTR 631 (CAL) TAKEN A VIEW THAT SEC.271 DOES NOT MANDATE RE CORDING OF SATISFACTION ABOUT CONCEALMENT OF INCOME MUST BE IN SPECIFIC TERMS AND WORDS, SATISFACTION OF AO MUST REFLECT FROM THE ORDER EITHER WITH EXPRESSED WORDS RECORDED BY THE AO OR BY HIS OVERT ACT AND ACTION. IN OUR VIEW THIS DECISION IS ON THE QUESTION OF REC ORDING SATISFACTION AND NOT IN THE CONTEXT OF SPECIFIC CHARGE IN THE MA NDATORY SHOW CAUSE NOTICE U/S.274 OF THE ACT. THEREFORE REFEREN CE TO THIS DECISION, IN OUR VIEW IS NOT OF ANY HELP TO THE PLEA OF THE R EVENUE BEFORE US. 8. THE LEARNED DR RELIED ON THREE DECISIONS OF MU MBAI ITAT VIZ., (I) DHANRAJ MILLS PVT. LTD. VS. ACIT ITA NO.3830 & 3833 /MUM/2009 DATED 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 DAT ED 27.2.2017. RELIANCE WAS PLACED ON TWO DECISIONS OF THE HONBLE BOMBAY HIGH COURT VIZ., (I) CIT VS. KAUSHALYA 216 I TR 660(BOM) AND (II) M/S.MAHARAJ GARAGE & CO. VS. CIT DATED 22.8.2 017. THIS DECISION WAS REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LEARNED DR. THIS IS AN UNREPORTED DECISION AND A COPY OF THE S AME WAS NOT FURNISHED. 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, DOES NOT EITHER MANDATE THE GIVING OF NO TICE 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 STRAIGHT-JACKET FORMULA . FOR SUSTAINING A COMPLAINT OF FAILURE OF THE PRINCIPLES OF NATURAL J USTICE ON THE GROUND OF ABSENCE OF OPPORTUNITY, IT HAS TO BE ESTABLISHED THAT PREJUDICE IS CAUSED TO THE CONCERNED PERSON BY THE PROCEDURE FOL LOWED. THE ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDE R TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. MERE MISTA KE IN THE LANGUAGE USED OR MERE NON-STRIKING OF THE INACCURAT E PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE ITAT MUMBAI BE NCH IN THE CASE OF DHANRAJ MILLS PVT.LTD. FOLLOWED THE DECISION RENDER ED BY THE JURISDICTIONAL HONBLE BOMBAY HIGH COURT IN THE CAS E OF KAUSHALYA (SUPRA) AND CHOSE NOT TO FOLLOW DECISION OF HONBLE KARNATAKA HIGH ITA NO.1542/KOL/2016 AMS FASHIONS PVT.LTD. A.Y.2011 -12 5 COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FA CTORY (SUPRA). RELIANCE WAS ALSO PLACED BY THE ITAT MUMBAI IN THIS DECISION ON THE DECISION OF HONBLE 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 OPPORTUNITY 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 AND WAS GIVEN AN OPPORTUNITY OF BEING HEARD. A MISTAKE IN THE NOTICE WOULD NOT INVALIDATE PENALTY PROCEEDINGS. 10. IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE C ORPORATION (SUPRA), THE ITAT MUMBAI DID NOT FOLLOW THE DECISIO N RENDERED IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA) FOR THE REASON THAT PENALTY IN THAT CASE WAS DELETED FOR SO MANY R EASONS 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.VEERABHADRAPPA SANGAPPA & CO., IN ITA NO.5020 OF 2009 WHICH WAS AN APPEAL BY THE REVENUE. THE TRIBUNAL H ELD THAT ON PERUSAL OF THE NOTICE ISSUED UNDER SECTION 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 A ND PARAGRAPHS WERE NEITHER STRUCK OFF NOR DELETED. THE ASSESSING AUTHORITY WAS NOT SURE AS TO WHETHER SHE HAD PROCEEDED ON THE BASIS T HAT THE ASSESSEE HAD EITHER CONCEALED ITS INCOME OR HAS FURNISHED IN ACCURATE DETAILS. THE NOTICE IS NOT IN COMPLIANCE WITH THE REQUIREMEN T OF THE PARTICULAR SECTION AND THEREFORE IT IS A VAGUE NOTICE, WHICH I S ATTRIBUTABLE TO A PATENT NON APPLICATION OF MIND ON THE PART OF THE A SSESSING AUTHORITY. FURTHER, IT HELD THAT THE ASSESSING OFFICER HAD MAD E ADDITIONS UNDER SECTION 69 OF THE ACT BEING UNDISCLOSED INVESTMENT. IN THE APPEAL, THE SAID FINDING WAS SET-ASIDE. BUT ADDITION WAS SUSTAI NED ON A NEW GROUND, THAT IS UNDER VALUATION OF CLOSING STOCK. S INCE THE ASSESSING AUTHORITY HAD INITIATED PENALTY PROCEEDINGS BASED O N THE ADDITIONS MADE UNDER SECTION 69 OF THE ACT, WHICH WAS STRUCK DOWN BY THE APPELLATE AUTHORITY, THE INITIATED PENAL PROCEEDING S, NOLONGER EXISTS. IF THE APPELLATE AUTHORITY HAD INITIATED PENAL PROCEED INGS 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 ORDER PASSED BY THE APPELLATE AUTHORITY AS WELL AS THE ASSESSING AUTHORITY WAS SET-ASIDE BY ITS ORDER DATE D 9TH APRIL, 2009. AGGRIEVED BY THE SAID ORDER, THE REVENUE FILED APPE AL BEFORE HIGH COURT. THE HONBLE HIGH COURT FRAMED THE FOLLOWING QUESTION OF LAW IN THIS APPEAL VIZ., 1. WHETHER THE NOTICE ISSUED UNDE R SECTION 271(1)(C) IN THE PRINTED FORM WITHOUT SPECIFICALLY MENTIONING WHETHER THE PROCEEDINGS ARE INITIATED ON THE GROUND OF CONCEALM ENT OF INCOME OR ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS IS VALID AND LEGAL? 2. WHETHER THE PROCEEDINGS INITIATED BY THE ASSESSI NG AUTHORITY WAS ITA NO.1542/KOL/2016 AMS FASHIONS PVT.LTD. A.Y.2011 -12 6 LEGAL AND VALID? THEREFORE THE DECISION RENDERED B Y THE ITAT MUMBAI IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE CORPOR ATION (SUPRA) IS OF NO ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US. 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 LEARNED DR, WHICH IS AN UNREPORTED DECISION AND A COPY OF THE SAME WAS NOT FURNISHED, THE SAME PROPOSITION AS WAS LAID DOWN IN THE CASE OF SMT.KAUSHALYA APPEARS TO HAVE BEEN REITERATED, AS I S EVIDENT FROM THE EXTRACTS FURNISHED IN THE WRITTEN NOTE FURNISHE D BY THE LEARNED 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 T HE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUP RA). 13. IN THE CASE OF MAHESH M.GANDHI (SUPRA) THE MUM BAI ITAT THE ITAT HELD THAT THE DECISION OF THE HONBLE KARNATAK A HIGH COURT IN THE CASE MANJUNATHA COTTON & GINNING (SUPRA) WILL N OT BE APPLICABLE TO THE FACTS OF THAT CASE BECAUSE THE AO IN THE ASS ESSMENT ORDER WHILE INITIATING PENALTY PROCEEDINGS HAS HELD THAT THE AS SESSEE HAD CONCEALED PARTICULARS OF INCOME AND MERELY BECAUSE IN THE SHOW CAUSE NOTICE U/S.274 OF THE ACT, THERE IS NO MENTIO N WHETHER THE PROCEEDINGS ARE FOR FURNISHING INACCURATE PARTICULA RS OR CONCEALING PARTICULARS OF INCOME, THAT WILL NOT VITIATE THE PE NALTY PROCEEDINGS. IN THE PRESENT CASE THERE IS NO WHISPHER IN THE ORDER OF ASSESSMENT ON THIS ASPECT. WE HAVE POINTED OUT THIS ASPECT IN TH E EARLIER PART OF THIS ORDER. HENCE, THIS DECISION WILL NOT BE OF ANY ASS ISTANCE TO THE PLEA OF THE REVENUE BEFORE US. 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 HIGH COURT IS THAT ISSUANCE OF NOTICE IS AN ADMINIS TRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY P ENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DO NE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING OF THE IN ACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUN AL AT MUMBAI BEING SUBORDINATE TO THE HONBLE BOMBAY HIGH COURT ARE BO UND TO FOLLOW THE AFORESAID VIEW. AS FAR AS BENCHES OF TRIBUNAL IN OTHER JURISDICTIONS ARE CONCERNED, THERE ARE TWO VIEWS ON THE ISSUE ONE IN FAVOUR OF THE ASSESSEE RENDERED BY THE HONBLE KARN ATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) AND OTHER OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHA LYA. IT IS SETTLED LEGAL POSITION THAT WHERE TWO VIEWS ARE AVA ILABLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO BE FOLLO WED. WE THEREFORE PREFER TO FOLLOW THE VIEW EXPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (S UPRA). ITA NO.1542/KOL/2016 AMS FASHIONS PVT.LTD. A.Y.2011 -12 7 11. 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 AGAI NST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT S TRIKE OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMP OSITION OF PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD. COUNSEL FOR THE ASSE SSEE 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 PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE CANCELLED. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 01 .03.2018 SD/- SD/- [WASEEM AHMED] [ N.V.VAS UDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 01 .03.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1. AMS FASHIONS PRIVATE LIMITED, 25A, VARDAN MARKET -411, CAMAC STREET, KOLKATA- 700016. 2 C.I.T.-4, KOLKATA. 3. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SR.PRIVATE SECRETARY/HEAD OF OFFICE & D.D. O. ITAT, KOLKATA BENCHES