Kamal Kumar Jain, Kolkata V. I.T.O Wd - 29(4),kolkata, Kolkata

ITA 1576/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4746 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 26-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 28-05-2013
• Court: TRIBUNAL
• Department Lawyers: DINABANDHU N ASKAR JCIT LD
• Assessee Lawyers: V N PUROHIT
• Keywords: Principle of natural justice; Initiation of penalty proceedings
• Section: 143(3); 27

Judgement Text

ITA NO.1576/KOL/2013-A-JM- KAMAL KUMAR JAIN 1 IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, K OLKATA BEFORE : SHRI WASEEM AHMED, ACCOUNTANT MEMBER, AND SHRI S.S VISWANETHRA RAVI, JU DICIAL MEMBER, I.T.A NO. 1576/KOL/2013 A.Y. 2009-10 KAMAL KUMAR JAIN VS. I.T.O WARD 29(4), KOLKATA PAN: ACEPJ2646R (APPELLANT) (RESPON DENT) FOR THE APPELLANT : S/SHRI V.N PUROHIT & HARSH VARDHAN BHARDWAJ, FCA, LD.ARS FOR THE RESPONDENT: SHRI DINABANDHU N ASKAR, JCIT, LD.DR DATE OF HEARING: 26-04-2016 DATE OF PRONOUNCEMENT: 31 -05-2 015 ORDER SHRI S.S VISWANETHRA RAVI, JM THIS APPEAL OF THE ASESSEE ARISES OUT OF THE ORDER OF THE CIT(A)-XVI, KOLKATA IN APPEAL NO. 107/CIT(A)-XVI/29(4)/KOL/11-1 2 DATED 08-04-2013 FOR THE ASSESSMENT YEAR 2009-10 AGAINST THE ORDER OF PE NALTY LEVIED U/S. 271(1) ( C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT). 2. THE APPELLANT ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUND:- 1. THE ORDER OF THE LEARNED CIT(A)-XVI CONFIRMING THE PENALTY OF RS.54,590/- U/S. 271(1)( C) IS BAD IN LAW AND ON FA CTS. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL HAVING RETIRED FROM M/S. COAL INDIA LIMITED DERIVING HIS INCOME FROM PENSION, INTEREST FROM BANK, NSS,NSC, KVPS,PO MIS AND ETC. THE ASSESSEE FI LED HIS RETURN OF INCOME ITA NO.1576/KOL/2013-A-JM- KAMAL KUMAR JAIN 2 ON 26-08-2009 DECLARING TOTAL INCOME OF RS.4,20,270 /-. THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 08-12-2011 FOR A TOTAL INCOME OF RS. 6,20,270/-. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAS WITHDRAWN RS. 2 LAKHS F ROM NSS ON 11-12-2008 AND THE SAME WAS NOT DISCLOSED IN THE RETURN INCOME. T HE ASSESSING OFFICER ADDED THE SAID AMOUNT TREATING THE SAME AS INCOME OF THE ASSESSEE FOR NOT AFFORDING PROPER EXPLANATION. THE ASSESSING OFFICER HAS INIT IATED THE PENALTY PROCEEDINGS U/S. 271(1) (C) FOR NOT DISCLOSING THE SAID INCOME IN THE RETURN. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEF ORE THE CIT(A) THE CONTENTION OF THE ASSESSEE WAS THAT HE DOES NOT KNO W THE LAW. THUS, HE DID NOT DISCLOSE THE SAID AMOUNT FOR TAXATION. THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER IN IMPOSING PENALTY U/S. 271(1)( C) OF THE ACT. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. DURING THE COURSE OF ARGUMENTS THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASE UNDER CONSIDERATION IS COV ERED BY THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 565 (KARN), AND ALSO BY THE ORDER OF THE TRIBUNAL IN THE CASE OF SUVAPRASANNA BHATTACHARYA V S. ACIT, CIR-55, KOLKATA DATED 06-11-2015. ON THE CONTRARY, THE LD.DR HAS RE LIED ON THE ORDERS OF THE LOWER AUTHORITIES. 5. HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. THE QUESTION BEFORE US IS AS TO WHETHER THE PENALTY ORDER PASSED BY THE AO AND CONFIRMED BY THE CIT(A) IS FALLS FOR OUR CONSIDERA TION IN PURSUANCE OF THE LAW LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT SUPRA . THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING ITA NO.1576/KOL/2013-A-JM- KAMAL KUMAR JAIN 3 FACTORY, 359 ITR 565 (KARN), HAS HELD THAT NOTICE U/S. 274 OF THE ACT SHOULD SPECIFICALLY STATE ON WHAT GROUND PENALTY IS BEING PROPOSED TO BE IMPOSED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISH ING INACCURATE PARTICULARS OF INCOME. IT WAS SUBMITTED THAT THE AFORESAID DECISIO N WILL SQUARELY APPLICABLE TO THE PRESENT CASE AND ALL THE ORDERS IMPOSING PENALT Y HAVE TO BE HELD AS BAD IN LAW AND LIABLE TO BE QUASHED AND ON THE CONTRARY, T HE LD. DR HAS RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 6. THE BENCH B KOLKATA TRIBUNAL IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS. ACIT BY AN ORDER DATED 06-11-2015 CONSIDERED THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT SUPRA THE RELEVANT PORTION OF WHICH REPRODUCED HEREUNDER 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 FURNISHI NG INACCURATE PARTICULARS OF INCOME OR CONCEALING PARTICULARS O F 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 I S THEREFORE NOT SPELT OUT AS TO WHETHER THE PENALTY PROCEEDINGS ARE SOUGH T TO BE LEVIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR C ONCEALING 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 5 65 (KARN), HAS HELD THAT NOTICE U/S. 274 OF THE ACT SHOULD SPECIFI CALLY STATE AS TO WHETHER PENALTY IS BEING PROPOSED TO BE IMPOSED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE HONBLE HIGH COURT HAS FURTHER LAID DOW N THAT CERTAIN PRINTED FORM WHERE ALL THE GROUNDS GIVEN IN SECTION 271 ARE GIVEN WOULD NOT SATISFY THE REQUIREMENT 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 THA T IN THE PRESENT CASE, THE AFORESAID DECISION WILL SQUARELY APPLY AN D ALL THE ORDERS ITA NO.1576/KOL/2013-A-JM- KAMAL KUMAR JAIN 4 IMPOSING PENALTY HAVE TO BE 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) HA S LAID DOWN THE FOLLOWING PRINCIPLES TO BE FOLLOWED IN THE MATTER O F 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 REGAR DING THE EXISTENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN PENALTY PROCEEDINGS IS INITIATED, IN THE NOTICE TO BE ISSUE D UNDER SECTION 274, THEY COULD CONVENIENTLY REFER TO THE SAID ORDE R WHICH CONTAINS THE SATISFACTION OF THE AUTHORITY WHICH HA S PASSED THE ORDER. HOWEVER, IF THE EXISTENCE OF THE CONDITIONS COULD NOT BE DISCERNED FROM THE SAID ORDER AND IF IT IS A CASE O F RELYING ON DEEMING PROVISION CONTAINED IN EXPLANATION-1 OR IN EXPLANATION- 1(B), THEN THOUGH PENALTY PROCEEDINGS ARE IN THE NA TURE OF CIVIL LIABILITY, IN FACT, IT IS PENAL IN NATURE. IN EITHE R EVENT, THE PERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED IN SECTI ON 271 SHOULD BE MADE KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEN D IMPOSING PENALTY ON HIM AS THE SECTION 274 MAKES IT CLEAR TH AT ASSESSEE HAS A RIGHT TO CONTEST SUCH PROCEEDINGS AND SHOULD HAVE FULL OPPORTUNITY TO MEET THE CASE OF THE 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 D EPARTMENT SENDING A PRINTED FARM WHERE ALL THE GROUND MENTION ED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NOT REBUTTING THE INIT IAL PRESUMPTION IS SERIOUS IN NATURE AND HE HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILITY. AS THE SAID PROVISIONS HAVE T O BE HELD TO BE STRICTLY CONSTRUED, NOTICE ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHE RWISE, PRINCIPLES OF NATURAL JUSTICE IS OFFENDED IF THE SH OW CAUSE NOTICE IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASSESSEE. ITA NO.1576/KOL/2013-A-JM- KAMAL KUMAR JAIN 5 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, TH AT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. NO DOUBT, THE FACTS OF SOME CASES MAY ATTRACT BOTH THE OFFENCES AND IN SOME CASES THERE M AY BE OVERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES T HE INITIATION OF THE PENALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE O FFENCES. BUT DRAWING UP PENALTY PROCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSEE GUILTY OF ANOTHER OFFENCE OR FINDING HIM G UILTY FOR EITHER THE ONE OR THE OTHER CANNOT BE SUSTAINED IN LAW. IT IS NEEDLESS TO POINT OUT SATISFACTION OF THE EXISTENCE OF THE GROU NDS MENTIONED IN SECTION 271(1)(C) WHEN IT IS A SINE QUA NON FOR INI TIATION OR PROCEEDINGS, THE PENALTY PROCEEDINGS SHOULD BE CONF INED ONLY TO THOSE GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECI FICALLY STATED SO THAT THE ASSESSEE WOULD HAVE THE OPPORTUNITY TO MEET THOSE GROUNDS. AFTER, HE PLACES HIS VERSION AND TRIES TO SUBSTANTIATE HIS CLAIM, IF AT ALL, PENALTY IS TO BE IMPOSED, IT SHOU LD BE IMPOSED ONLY ON THE GROUNDS ON WHICH HE IS CALLED UPON TO ANSWER . IT IS NOT OPEN TO THE AUTHORITY, AT THE TIME OF IMPOSING PENA LTY TO IMPOSE PENALTY ON THE 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 PE NALTY WOULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAINED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROUND, T HE PENALTY SHOULD ALSO BE IMPOSED ON THE SAME GROUND. WHERE TH E BASIS OF THE INITIATION OF PENALTY PROCEEDINGS IS NOT IDENTI CAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, THE IMPOSI TION 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 TH E PENALTY AT THE TIME THE ORDER WAS PASSED AND FURTHER 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 COU RSE OF ANY PROCEEDINGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF TOTAL INCOME UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICULARS OF I NCOME ARE DIFFERENT. THUS THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS TO COME TO THE CONCLUSION THAT WHETHER IS IT A CASE OF CONCEALMENT OF ITA NO.1576/KOL/2013-A-JM- KAMAL KUMAR JAIN 6 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 FUR NISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CO NNOTATIONS. 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 HEL D THAT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BEING UNCLEAR PENALTY IS NOT SUSTA INABLE. THEREFORE, WHEN THE ASSESSING OFFICER PROPOSES TO I NVOKE THE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE A PPROPRIATELY MARKED. SIMILAR IS THE CASE FOR FURNISHING INACCURA TE PARTICULARS OF INCOME. THE STANDARD PRO FORMA WITHOUT STRIKING OF THE RELEVANT CLAUSES WILL LEAD TO AN INFERENCE AS TO NON-APPLICA TION 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 LIABILIT IES. C) WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDI ENT FOR ATTRACTING CIVIL LIABILITY. D) EXISTENCE OF CONDITIONS STIPULATED IN SECTION 271(1)(C) IS A SINE QUA NON FOR INITIATION OF PENAL TY PROCEEDINGS UNDER SECTION 271. E) THE EXISTENCE OF SUCH CONDITIONS SHOULD BE DISCERNIBLE FROM THE ASSESSMENT ORDER OR ORDER OF T HE APPELLATE AUTHORITY OR REVISIONAL AUTHORITY. F) EVEN IF THERE IS NO SPECIFIC FINDING REGARDING THE EXISTENCE OF THE CONDITIONS MENTIONED IN SECTION 27 1(1)(C), AT LEAST THE FACTS SET OUT IN EXPLANATION 1(A) & (B ) IT SHOULD BE DISCERNIBLE FROM THE SAID ORDER WHICH WOULD 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 PRO CEEDINGS UNDER SECTION 271(L)(C) IS A SINE QUA NON FOR THE A SSESSMENT ITA NO.1576/KOL/2013-A-JM- KAMAL KUMAR JAIN 7 OFFICER TO INITIATE THE PROCEEDINGS 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 TH E 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 TA X AND INTEREST THAT BY ITSELF WOULD NOT BE SUFFICIENT FOR THE AUTHORITIES EITHER TO INITIATE PENALTY PROCEEDINGS OR IMPOSE PENALTY, UNLESS IT IS DISCERNIBLE FROM THE ASSESSME NT ORDER THAT, IT IS ON ACCOUNT OF SUCH UNEARTHING OR ENQUIR Y CONCLUDED BY AUTHORITIES IT HAS 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 TH E ASSESSING OFFICER IN THE ASSESSMENT ORDER. L) ONLY WHEN NO EXPLANATION IS OFFERED OR THE EXPLANATION OFFERED IS FOUND TO BE FALSE OR WHEN TH E ASSESSEE FAILS TO PROVE THAT THE EXPLANATION OFFERE D IS NOT BONA FIDE, AN ORDER IMPOSING PENALTY COULD BE PASSE D. M) IF THE EXPLANATION OFFERED, EVEN THOUGH NOT SUBSTANTIATED BY THE ASSESSEE, BUT IS FOUND TO BE B ONA FIDE 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 AMBI GUITY. O) IF THE ASSESSING OFFICER HAS NOT RECORDED ANY SATISFACTION OR HAS NOT ISSUED ANY DIRECTION TO INI TIATE PENALTY PROCEEDINGS, IN APPEAL, IF THE APPELLATE AU THORITY RECORDS SATISFACTION, THEN THE PENALTY PROCEEDINGS HAVE TO BE INITIATED BY THE APPELLATE AUTHORITY AND NOT THE ASSESSING AUTHORITY. ITA NO.1576/KOL/2013-A-JM- KAMAL KUMAR JAIN 8 P) NOTICE UNDER SECTION 274 OF THE ACT SHOULD SPECIFICALLY STATE THE GROUNDS MENTIONED IN SECTION 271(1)(C), I.E., WHETHER IT IS FOR CONCEALMENT OF I NCOME 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 REQU IREMENT OF LAW. R) THE ASSESSEE SHOULD KNOW THE GROUNDS WHICH HE H AS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLES OF NATU RAL JUSTICE IS OFFENDED. ON THE BASIS OF SUCH PROCEEDINGS, NO P ENALTY 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 ASSESSMENT PROCEEDINGS. THE PROCEEDINGS FOR IMPOSIT ION OF PENALTY THOUGH EMANATE FROM PROCEEDINGS OF ASSESSME NT, IT IS INDEPENDENT AND SEPARATE ASPECT OF THE PROCEEDIN GS. U) THE FINDINGS RECORDED IN THE ASSESSMENT PROCEED INGS IN SO FAR AS 'CONCEALMENT OF INCOME' AND 'FURNISHIN G OF INCORRECT PARTICULARS' WOULD NOT OPERATE AS RES JUD ICATA IN THE PENALTY PROCEEDINGS. IT IS OPEN TO THE ASSESSEE TO CONTEST THE SAID PROCEEDINGS ON MERITS. HOWEVER, THE VALIDI TY OF THE ASSESSMENT OR REASSESSMENT IN PURSUANCE OF WHICH PE NALTY 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 KAR NATAKA HIGH COURT, WE HOLD THAT THE ORDERS IMPOSING PENALTY IN ALL THE ASSESSMENT YEARS HAVE TO BE HELD AS INVALID AND CONSEQUENTLY P ENALTY IMPOSED IS CANCELLED. ITA NO.1576/KOL/2013-A-JM- KAMAL KUMAR JAIN 9 IN THE PRESENT CASE, THE NOTICE DT:08-12-2011 ISSUE D BY THE AO U/SEC 274 R/W 271 OF THE ACT DOES NOT SHOW ON WHICH GROUND TH E PENALTY IS SOUGHT TO BE IMPOSED AND IN VIEW OF THE SAME, WE HOLD THAT THE O RDER DT:07-03-2012 LEVYING PENALTY IS NOT VALID. RESPECTFULLY FOLLOWING THE OR DER ABOVE, WE CANCEL THE PENALTY LEVIED U/S. 271(1) ( C) BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOW ED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 31 /05/2 016 SD/- SD/- WASEEM AHMED, S.S VISWANETHRA RAVI, ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 31 /05/2016 COPY OF THE ORDER FORWARDED TO: 1.. THE APPELLANT/ASSESSEE : SHRI KAMAL KUMAR JAIN 10-F RAJSHREE, 31, JUDGES COURT ROAD, ALIPORE, KOL-27. 2 THE RESPONDENT/DEPARTMENT- THE INCOME TAX OFFICE R, WARD 29(4), DAKSHINAPAN, 2 GARIAHAT ROAD SOUTH, KOL-68. 3 4.. /THE CIT, /THE CIT(A) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR ** PRADIP SPS ITA NO.1576/KOL/2013-A-JM- KAMAL KUMAR JAIN 10