M/s. Precision Transmision Chain, Hooghly V. ITO, Ward - 24(2), Hooghly , Hooghly

ITA 158/KOL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0128 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 02-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S HALDER LD
• Assessee Lawyers: SUBASH AGARWAL LD
• Keywords: Opportunity of being heard; Principle of natural justice; Question of law
• Section: 271(1)(c); 69; 27

Judgement Text

ITA NO. 158/KOL/2018 M/S. PRECISION TRANSMISSION CHAIN 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D, KOLKATA (BEFORE SHRI S. S.VISWANETHRA RAVI, J.M. & DR.A.L.SAINI, A.M.) ITA NO. 158/KOL/2018 : ASSTT. YEAR : 20 08 - 09 M/S. PRECISION TRANSMISSION CHAIN PAN: AAEFP 2414K VS INCOME TAX OFFICER WARD 24(2), HOOGHLY (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S UBASH AGARWAL, ADVOCATE, LD.AR RESPONDENT BY : SHRI S. HALDER, LD.SR.DR DATE OF HEARING : 0 5 - 12 - 2018 DATE OF PRONOUNCEMENT: 07.12.2018 ORDER PER D R. A.L.SAINI, A.M .: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAINING TO ASSESSMENT YEAR 20 08 - 09 , IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS) - 6 , KOLKATA IN APPEAL NO. CIT(A) , KOLKATA - 6/10083/2016 - 17 , DATED 11 - 10 - 2 017 , WHICH IN TURN ARISES OUT OF A PENALTY ORDER PASSED BY THE ASSESSING OFFICER U/S. 271(1)( C) OF THE INCOME - TAX ACT, 1961 (IN SHORT, THE ACT), DATED 18 - 04 - 2016 . 2. AT THE OUTSET ITSELF, THE LD. DR FOR THE REVENUE SUBMITTED THAT IMPUGNED ORDER OF LD. CIT(A) RELATES TO A.Y 2008 - 09 , W HEREAS THE ASSESSMENT YEAR UNDER CONSIDERATION IS 2010 - 11. LD. DR DREW OUR ATTENTION TOWARDS THE ASSESSMENT ORDER DATED 16.10.2015, WHICH IS RELATED TO A.Y 2010 - 11. LD. DR ALSO DREW OUR ATTENTION TOWARDS. PENALTY ORDER U/S. 271(1)(C ) OF THE ACT DATED 18.04.2016, WHICH RELATES TO A.Y 2010 - 11. THEREFORE, LD.DR SUBMITTED BEFORE THE BENCH THAT THE IMPUGNED ORDER OF LD. CIT(A) RELATES TO A.Y 2008 - 09, WHICH DOES NOT ITA NO. 158/KOL/2018 M/S. PRECISION TRANSMISSION CHAIN 2 RELATE TO THE A.Y 2010 - 11, THEREFORE, ASSESSEES APPEAL SHOULD BE REMITTED BACK TO THE FILE OF THE LD. CIT(A) TO CORRECT THIS TYPOGRAPHICAL ERROR. 3. ON THE OTHER HAND, THE LD. AR FOR THE ASSESSE SUBMITTED BEFORE THE BENCH THAT IT IS ONLY TYPOGRAPHICAL ERROR. THE LD. AR POINTED OUT THAT IMPUGNED CIT(A)S ORDER CLEARLY MENTIONED THE FACTS NARRATED IN THE PENALTY ORDER U/S. 271(1) ( C) DATED 18.04.2016 FOR A.Y 2010 - 11. THE LD. CIT(A) ADJUDICATED ONLY THE ORDER DATED 18.04.2016 PASSED BY AO U/S. 271 (1) ( C) OF THE ACT . THE ASSESS E E MENTIONED INADVERTENTLY THE WRONG ASSESS MENT YEAR 2008 - 09 IN FORM NO. 35, WHICH THE LD. CIT(A) COPIED IN HIS ORDER. THE ASSESSMENT ORDER DATED 16.10.2015 PASSED U/S. 263/143(3) AND PENALTY ORDER U/S. 271(1)( C) , P ASSED ON 18 - 04 - 2016 RELATE TO A.Y 2010 - 11, THEREFORE, IMPUGNED ORDER OF LD. CIT(A) S HOULD BE TREATED FOR A.Y 2010 - 11 FOR ALL PRACTICAL PURPOSE S . 4. WE HAVE HEARD BOTH THE PARTIES ON THIS PRIMARY ISSUE AND NOTE THAT THERE IS A TYPOGRAPHICAL ERROR IN QUOTING THE A.Y AS A.Y 2008 - 09 INSTEAD OF A.Y 2010 - 11. THIS IS UNINTENTION AL TYPOGRAPHICA L APPARENT MISTAKE IN THE QUOTING A.Y 2008 - 09. WE NOTE THAT SUBSTANTIAL JUSTICE SHOULD NOT BE DENIED BECAUSE OF THE MINOR TYPOGRAPHICAL ERROR, THEREFORE, WE ADMIT THE ASSESSEES APPEAL FOR HEARING ON MERITS. 5. IN THIS APPEAL THE ASSESSE E HAS CHALLENGED T HE ORDER OF THE LD. CIT(A), WHEREBY THE LD. CIT(A) CONFIRMED THE ORDER OF THE AO IN IMPOSING PENALTY U/S. 271(1)( C) OF THE ACT. THE FACTS AND CIRCUMSTANCES ON WHICH PENALTY U/S. 271(1)( C) OF THE ACT WAS IMPOSED ON THE ASSESSE E BY THE AO ARE AS FOLLOWS: D URING THE ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE AO THAT THE TOTAL SUNDRY CREDITORS WITH TOTAL CREDIT BALANCE OF 9,64,334/ - IN THEIR GIVEN ADDRESSES WERE NOT AVAILABLE IN RESPONSE TO THE LETTER ISSUED BY THE AO. THE ITA NO. 158/KOL/2018 M/S. PRECISION TRANSMISSION CHAIN 3 SAME CREDIT BALANCES WERE ALSO REFLECTED DURING THE TWO CONSECUTIVE YEARS I.E F.YS 2008 - 09 & 2009 - 10. DEPARTMENTAL INSPECTOR WAS DEPUTED TO VERIFY THE EXISTENCE, GENUINENESS OF TRANSACTION S AND CREDITWORTHINESS OF THE SUNDRY CREDITORS . THE AO NOTED THAT THE ASSESSE E FAILED TO PROVE GE NUINENESS, CREDITWORTHINESS AND ACTUAL TRANSACTION OF THE SUNDRY CREDITORS, NAMELY, M/S. R.S HARDWARE STORES, RAJKUMAR PRAJAPATI, M/S. NARMADA ENTERPRISE & M/S. SARVAMANGALA TRADING CO. THE AO NOTED THAT THESE ARE FICTI TIOUS LIABILITIES AND ASSESSE E HAS I NFLATED ITS LIABILITY CLAIMED UNDER THE HEAD SUNDRY CREDITOR. THEREFORE, THE AO IMPOSED PENALTY U/S. 271(1) ( C) OF THE ACT TO THE TUNE OF RS. 1,51,030/ - . SUBSEQUENTLY, THE AO ISSUED NOTICE U/S. 271(1) ( C ) I.E. 16 TH OCTOBER 2015, WHEREIN THE AO STATED AS FOLLOWS: - WHEREAS IN THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE ME FOR THE A.Y 2010 - 11, IT APPEARS THAT YOU HAVE CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. 6. IN THE PENALTY PROCEEDINGS THE ASSESSE E TRIED TO EXPLA IN THAT HE HAS NEITHER CONCEALED PARTICULARS OF INCOME N OR FURNISHED INACCURATE PARTICULARS OF INCOME. BUT THE AO REJECTED THE CONTENTION OF THE ASSESSE AND LEVIED THE PENALTY. 7. THE LD. COUNSEL FOR THE ASSESSE SUBMITTED BEFORE US THAT THE ASSESSEES CAS E IS SQUARELY COVERED BY THE JUDGMENT/ORDER OF HONBLE ITAT IN THE CASE OF, JEETMAL CHORARIA VS. ACIT, ITA NO. 956/KOL/2016 ORDER DTD. 01.12.2017, WHEREIN IT WAS HELD AS UNDER: - 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE SHOW CAUSE NOTICE ISSUED U/S 274 OF THE ACT BEFORE IMPOSING PENALTY DOES NOT CONTAIN THE SPECIFIC CHARGE AGAINST THE ASSESSEE NAMELY AS TO WHETHER THE ASSESSEE WAS GUILTY OF HAVING CONCEALED PARTICULARS OF INCOME OR HAVING FURNISHED INACCURATE 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 AO HAS NOT STRUCK OUT THE IRRELEVANT PORTION IN THE SHOW CAUSE NOTICE AND THEREFORE THE SHOW CAUSE NOTICE DOES NOT SPECIFY THE CHARGE AGAINST THE A SSESSEE AS TO WHETHER THE CHARGE IS OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE SAME IS REPRODUCED FOR THE PURPOSE OF READY REFERENCE: ITA NO. 158/KOL/2018 M/S. PRECISION TRANSMISSION CHAIN 4 HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACC URATE PARTICULARS OF SUCH INCOME. 6. THE LD. COUNSEL FOR THE ASSESSEE 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 KARNATA KA HIGH COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTON 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 27 4 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. COUNSEL FURTHER BROUGHT TO OUR NOTICE THAT AS AGAINST THE DECISION OF THE HONBLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEAL IN SLP IN CC NO.11485 OF 2016 AND THE HONBLE SUPREME COURT BY ITS ORDER DATED 05.08.2016 DISMISSED THE SLP PREFERRED BY THE DEPARTMENT. THE LD. COUNSEL ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE HONBLE BOMBAY 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 MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) CAME TO THE CONCLUSION THAT IMPOSITION OF PENALTY ON DEFECTIVE SHOW CAUSE NOTICE WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT BE SUSTAINED. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASAN NA BHATTACHARYA VS ACIT IN ITA NO.1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS BEEN FOLLOWED BY THE TRIBUNAL. 7. THE LEARNED 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 EXPRESSED WORDS RECORDED BY THE AO OR BY HIS OVERT ACT AND ACTION. IN OUR VIEW THIS DECISION IS ON THE QUESTION OF RECORDING SATISFACTION AND NOT IN THE CONTEXT OF SPECIFIC CHARGE IN THE MANDATORY SHOW CAUSE NOTICE U/S.274 OF THE ACT. THEREFORE REFERENCE TO THIS DECISION, IN OUR V IEW IS NOT OF ANY HELP TO THE PLEA OF THE REVENUE BEFORE US. 8. THE LEARNED DR RELIED ON THREE DECISIONS OF MUMBAI ITAT VIZ., (I) DHANRAJ MILLS PVT. LTD. VS. ACIT ITA NO.3830 & 3833/MUM/2009 DATED 21.3.2017; (II) EARTHMOVING EQUIPMENT SERVICE CORPORAT ION 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 PLACED ON TWO DECISIONS OF THE HONBLE BOMBAY HIGH COURT VIZ., (I) CIT VS. KAUSHALYA 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 LEARNED 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 H AS BEEN GIVEN IN THE WRITTEN NOTE FILED BEFORE US. 9. IN THE CASE OF CIT VS. KAUSHALYA (SUPRA), THE HONBLE BOMBAY HIGH COURT HELD THAT SECTION 274 OR ANY OTHER PROVISION IN THE ACT OR THE RULES, DOES 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 BEI NG 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 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 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 ITAT MUMBAI BENCH IN THE CASE OF DHANRAJ MILLS PVT.LTD. (SUPRA) FOLLOWED THE DECISION RENDERED BY THE ITA NO. 158/KOL/2018 M/S. PRECISION TRANSMISSION CHAIN 5 JURISDICTIONAL HONBLE BOMBAY HIG H COURT IN THE CASE OF KAUSHALYA (SUPRA) AND CHOSE NOT TO FOLLOW DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA). RELIANCE WAS ALSO PLACED BY THE ITAT MUMBAI IN THIS DECISION ON THE DECISION OF HONBLE P ATNA 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 CORPORATION (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 ASSESSEE S BEFORE THE KARNATAKA HIGH COURT IN THE CASE 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 HELD THAT ON PERUSAL OF THE NOTICE ISS UED UNDER SECTION 271(1)(C) OF THE ACT, IT IS CLEAR THAT IT IS A STANDARD PROFORMA USED BY THE ASSESSING AUTHORITY. BEFORE ISSUING THE NOTICE THE INAPPROPRIATE WORDS AND PARAGRAPHS 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 OF THE PARTICULAR SECTION AND THEREFORE IT IS A VAGUE NOTICE, WHICH IS A TTRIBUTABLE 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 SAID FINDING WAS SET - ASIDE. BUT ADDITION WAS SUSTAINED ON A NEW GROUND, THAT IS UNDER VALUATION OF CLOSING STOCK. SINCE THE ASSESSING AUTHORITY HAD INITIATED PENALTY PROCEEDINGS BASED ON THE ADDITIONS MADE UNDER SECTION 69 OF THE ACT, WHICH WAS STRUCK DOWN BY THE APPELLATE AUTHORITY, THE INITIATED PENAL PROCEEDINGS, NOLONGER 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 ORDER PASSED BY THE APPELLATE AUTHORITY AS WELL AS THE ASSESSING AUTHORITY WAS SET - ASIDE BY ITS ORDER DATED 9TH APRIL, 2009. AGGRIEVED BY THE SAID ORDER, THE REVENUE 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 SECTION 271(1)(C) IN THE PRINTED FORM WITHOUT SPECIFICALLY MENTIONING WHETHER THE PROCEEDINGS ARE INITIATED ON THE GROUND OF CONCEALMENT OF INCOME OR ON ACCOUNT OF FURNISHING OF IN ACCURATE PARTICULARS IS VALID AND LEGAL? 2. WHETHER THE PROCEEDINGS INITIATED BY THE ASSESSING AUTHORITY WAS LEGAL AND VALID? THE HONBLE KARNATAKA HIGH COURT HELD IN THE NEGATIVE AND AGAINST THE REVENUE ON BOTH THE QUESTIONS. THEREFORE THE DECISION REND ERED 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. 11. IN THE CASE OF M/S.MAHARAJ GARAGE & CO. VS. CIT 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 BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUPRA) APPEARS TO HAVE BEEN REITERATED, AS IS EVIDENT FROM THE EXTRACTS FURNISHED IN THE WRITTEN NOTE FURNISHED 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 THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHAL YA (SUPRA). ITA NO. 158/KOL/2018 M/S. PRECISION TRANSMISSION CHAIN 6 13. IN THE CASE OF MAHESH M.GANDHI (SUPRA) THE MUMBAI ITAT THE 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 T HE ASSESSMENT ORDER WHILE INITIATING PENALTY PROCEEDINGS HAS HELD THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME AND MERELY BECAUSE IN THE SHOW CAUSE NOTICE U/S.274 OF THE ACT, THERE IS NO MENTION WHETHER THE PROCEEDINGS ARE FOR FURNISHING INACCURAT E PARTICULARS OR CONCEALING PARTICULARS OF INCOME, THAT WILL NOT VITIATE THE PENALTY PROCEEDINGS. IN THE PRESENT CASE THERE IS NO WHISPHER IN THE ORDER OF ASSESSMENT ON THIS ASPECT. WE HAVE POINTED 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 CASE OF MANJUNATHA COTTON & GINNING (SUPRA) IN AS MUCH AS THE RA TIO LAID DOWN IN THE SAID CASE WAS ONLY WITH 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 CAUSE NOTICE WILL STAND CURED IF THE INTENTION OF THE CHARGE U/S.271(1) (C ) IS DI SCERNIBLE FROM A READING OF THE ASSESSMENT ORDER IN WHICH THE PENALTY WAS INITIATED. 14. FROM THE AFORESAID DISCUSSION IT CAN BE SEEN THAT THE LINE OF REASONING OF THE HONBLE BOMBAY HIGH COURT AND THE HONBLE PATNA HIGH COURT IS THAT ISSUANCE OF NOTI CE 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 ITSEL F INVALIDATE THE NOTICE. THE TRIBUNAL BENCHES AT MUMBAI AND PATNA BEING SUBORDINATE TO THE HONBLE BOMBAY HIGH COURT AND PATNA HIGH COURT ARE BOUND TO FOLLOW THE AFORESAID VIEW. THE TRIBUNAL BENCHS AT BANGALORE HAVE TO FOLLOW THE DECISION OF THE HONBLE KARNATAKA HIGH COURT. 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 KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & 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 AVAILABLE 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 NOTICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER I T IS FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIKE OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD. COUNSEL 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 PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS D IRECTED TO BE CANCELLED. WE NOTE THAT AS THE ISSUE IS SQUARELY COVERED BY THE JUDGMENT/ORDER OF THE CO - ORDINATE BENCH IN THE CASE OF JEETMAL CHORARIA IN ITA 956/KOL/16 FOR AY 2010 - 11, ORDER DT. 01 - 12 - 2017 (SUPRA), AND THERE IS NO CHANGE IN FACTS AND LAW A ND LD. DR OF THE REVENUE DID NOT CONTROVERT THE FINDINGS OF THE ABOVE SAID ORDER OF THE CO - ORDINATE BENCH, ITAT, KOLKATA. ITA NO. 158/KOL/2018 M/S. PRECISION TRANSMISSION CHAIN 7 RESPECTFULLY FOLLOWING THE JUDGMENT OF THE CO - ORDINATE BENCH (SUPRA) , WE DELETE THE IMPUGNED PENALTY OF RS. 1,51,030/ - . 8 . IN THE R ESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 07 - 12 - 2018 SD/ - SD/ - ( S.S.VISWANETHRA RAVI ) (DR. A.L.SAI NI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 07 - 12 - 2018 *PRADIP (SR.PS) COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT/ASSESSEE: M/S. PRECISION TRANSMISSION CHAIN C/O N.K. GOYAL, 16 N.S ROAD, 2 ND FLOOR, KOLKATA - 700 001. 2 THE RESPONDENT/REVENUE: INCOME TAX OFFICER, WARD 24(2), AAYKAR BHAWAN, G.T ROAD, KHADINAMORE, CHINSURAH, WEST BENGAL - 712101. 3. THE CIT - , 4. THE CIT(A) - , 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASST. REGISTRAR ITAT, KOLKATA BENCHES