Ranjit Kumar Paul, Dakshin Dinajpur V. DCIT, CC-XXVII, KOLKATA, Kolkata

ITA 1745/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1652 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 31-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G HANGSHING
• Keywords: Income from undisclosed sources; Opportunity of being heard; Principle of natural justice; Question of law
• Section: 69

Judgement Text

1 ITA NOS.1744 & 1745/KOL/2016 SHRI RANJIT KUMAR PAUL A.Y.2007-08 & 2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH D KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI M.B ALAGANESH, AM ] ITA NOS.1744 & 1745 /KOL/2016 ASSESSMENT YEARS : 2007-08 & 2012-13 SHRI RANJIT KUMAR PAUL -VERSUS- D.C.I.T.,CENTRALC IRCLE-XXVII, KOLKATA KOLKATA (PAN:AFQPP 0502 B) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI SUBASH AGARWAL, ADVOCAT E FOR THE RESPONDENT: SHRI G.HANGSHING, CIT(DR) DATE OF HEARING : 09.01.2018. DATE OF PRONOUNCEMENT : 02.02.2018. ORDER PER N.V.VASUDEVAN, JM: THESE ARE APPEALS BY THE ASSESSEE AGAINST TWO ORDE RS BOTH DATED 15.06.2016 OF C.I.T.(A)-21, KOLKATA RELATING TO A.Y.2007-08 AND 2012-13. IN BOTH THESE APPEALS THE ASSESSEE HAS CHALLENGED THE ORDER OF CIT(A) WHE REBY THE CIT(A) CONFIRMED THE ORDER OF THE AO IMPOSING PENALTY ON THE ASSESSEE U/ S 271 (1)(C) OF THE INCOME TAX ACT, 1961 (ACT). 2. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENAL TY WAS IMPOSED ON THE ASSESSEE BY THE AO ARE AS FOLLOWS :- THE ASSESSEE IS AN INDIVIDUAL. THERE WAS A SEARCH A ND SEIZURE OPERATION U/S 132(1) OF THE ACT CONDUCTED IN THE PAUL GROUP OF CA SES ON 17.01.2012. THE ASSESSEE WAS ALSO SEARCHED AS PART OF THE PAUL GROUP OF CASE S. ON PERUSAL OF THE BOOKS OF ACCOUNT FOR A.Y.2007-08 AND 2012-13 THE AO NOTICED THAT THE ASSESSEE HAD SHOWN LOAN FROM M/S. PAUL BROTHERS TO THE TUNE OF RS.34,2 5,000/- IN A.Y.2007-08 AND RS.23,25,000/- IN A.Y.2012-13. THE ASSESSEE VIDE IT S LETTER 05.12.2013 SUBMITTED AS FOLLOWS :- 2 ITA NOS.1744 & 1745/KOL/2016 SHRI RANJIT KUMAR PAUL A.Y.2007-08 & 2012-13 I)FOR A.Y.2007-08 THE LOAN FROM M/S. PAUL BROTHERS TO THE TUNE OF RS.23,25,000/- FOR WHICH THE ASSESSEE FILED CONFIRMATION. WITH REGARD TO DIFFERENCE OF RS.11,00,000/- (34,25,000/- - 23,25,000/-) THE ASSESSEE SUBMITTED THAT IT WAS INCOME EARNED BY THE ASSESSEE FROM UNDISCLOSED SOURCES AND THE SAME WAS OFFERED TO TAX IN A.Y.2007-08. II)AS FAR AS A.Y.2012-13 IS CONCERNED THE ASSESSEE SUBMITTED THAT THE ENTIRE LOAN FROM M/S. PAUL BROTHERS AMOUNTING TO RS.23,25,000/- RELA TING TO INCOME FROM UNDISCLOSED SOURCES WHICH WAS OFFERED TO TAX IN A.Y.2012-1. 3. BASED ON THE ABOVE LETTER OF THE ASSESSEE THE AO BROUGHT TO TAX A SUM OF RS.11,00,000/- IN A.Y.2007-08 AND RS.23,25,000/- IN A.Y.2012-13 AS UNSECURED LOAN OFFERED AS UNDISCLOSED INCOME OF THE ASSESSEE. 4. IN RESPECT OF THE AFORESAID ADDITIONS IN THE COU RSE OF ASSESSMENT PROCEEDINGS THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR A.Y.2007-08 AND 2012-13 RESPECTIVELY. THE AO IMPOSED PENALTY IN AL. Y.2007-08 AND 2012-13 HOLDING THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME. PENALTY WAS IMPOSED OF 100% OF THE TAX SOUGHT TO BE EVADED. ORDER IMPOSING PENALTY U/S 271(1)(C) OF THE ACT CONFIRMED BY THE CIT(A) GIVING RISE TO THESE APPEAL S BY THE ASSESSEE BEFORE THE TRIBUNAL. 5. THE LD. COUNSEL DREW OUR ATTENTION TO THE SHOW C AUSE NOTICE ISSUED BY THE AO U/S 274 OF THE ACT BEFORE IMPOSING PENALTY U/S 271(1)(C ) OF THE ACT AND POINTED OUT THAT THE AO HAS NOT SPECIFIED THE CHARGE AGAINST THE ASS ESSEE AS TO WHETHER IT IS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE IRRELEVANT PORTION IN THE SHOW CAUSE NOTICE U/S 274 OF THE ACT HAS NOT BEEN STRUCK OFF. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTE NTION 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) 3 ITA NOS.1744 & 1745/KOL/2016 SHRI RANJIT KUMAR PAUL A.Y.2007-08 & 2012-13 359 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. 6. THE LD. DR SUBMITTED THAT IT IS NOT MANDATORY TO SPECIFY THE CHARGE IN THE SHOW CAUSE NOTICE U/S 274 OF THE ACT. IN THIS REGARD HE PLACED RELIANCE ON CERTAIN JUDICIAL PRONOUNCEMENTS. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. SIMILA R SUBMISSIONS MADE BY THE LD. DR IN THE CASE OF SHRI JEETMAL CHORARIA VS ACIT IN ITA NO.956/KOL/2016 ORDER DATED 01.12.2017 AND THIS TRIBUNAL DEALT WITH THIS SIMILAR ARGUMENTS OF THE LD. DR IN THE FOLLOWING PARAGRAPHS : 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 63 1 (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 4 ITA NOS.1744 & 1745/KOL/2016 SHRI RANJIT KUMAR PAUL A.Y.2007-08 & 2012-13 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. 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/200 9 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 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 LEARNE D 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 WRI TTEN 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 ESTA BLISHED THAT PREJUDICE IS CAUSED TO THE CONCERNED PERSON BY THE PROCEDURE FOL LOWED. THE ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING TH E ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN A S TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIK ING OF 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 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 OPPORTUNITY TO SHOW CAUSE. NO STATUTORY NOTICE HAS BEEN PRESCRIBED IN THIS BEHALF. HENCE, I T IS SUFFICIENT IF THE ASSESSEE WAS AWARE OF THE CHARGES HE HAD TO MEET AND WAS GIV EN 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 DECISION RENDERED IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA) FOR THE REASON THA T PENALTY IN THAT CASE WAS DELETED FOR SO MANY REASONS AND NOT SOLELY ON THE B ASIS OF DEFECT IN SHOW CAUSE 5 ITA NOS.1744 & 1745/KOL/2016 SHRI RANJIT KUMAR PAUL A.Y.2007-08 & 2012-13 NOTICE U/S.274 OF THE ACT. THIS IS NOT FACTUALLY CO RRECT. ONE OF THE PARTIES BEFORE THE GROUP OF ASSESSEES BEFORE THE KARNATAKA HIGH CO URT 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 P ERUSAL OF THE NOTICE ISSUED UNDER SECTION 271(1)(C) OF THE ACT, IT IS CLEAR THA T IT IS A STANDARD PROFORMA USED BY THE ASSESSING AUTHORITY. BEFORE ISSUING THE NOTI CE THE INAPPROPRIATE WORDS AND 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 INACCURATE DE TAILS. THE NOTICE IS NOT IN COMPLIANCE WITH THE REQUIREMENT OF THE PARTICULAR S ECTION AND THEREFORE IT IS A VAGUE NOTICE, WHICH IS ATTRIBUTABLE TO A PATENT NON APPLICATION OF MIND ON THE PART OF THE ASSESSING AUTHORITY. FURTHER, IT HELD T HAT THE ASSESSING OFFICER HAD MADE ADDITIONS UNDER SECTION 69 OF THE ACT BEING UN DISCLOSED INVESTMENT. IN THE APPEAL, THE SAID FINDING WAS SET-ASIDE. BUT ADDITIO N WAS SUSTAINED ON A NEW GROUND, THAT IS UNDER VALUATION OF CLOSING STOCK. S INCE THE ASSESSING AUTHORITY HAD INITIATED PENALTY PROCEEDINGS BASED ON THE ADDI TIONS MADE UNDER SECTION 69 OF THE ACT, WHICH WAS STRUCK DOWN BY THE APPELLATE AUTHORITY, THE INITIATED PENAL PROCEEDINGS, NO LONGER EXISTS. IF THE APPELLATE AUT HORITY 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 THE REFORE, 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 APRI L, 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 AP PEAL 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 INACCURATE PARTICULARS IS VALID AND LEGAL? 2. WHETHER THE PROCEEDINGS INITIATED BY THE ASSESSING AUTHORITY WAS LEGAL AND VALID? THE HONBLE KARNATAKA HIGH COURT HELD I N THE NEGATIVE AND AGAINST THE REVENUE ON BOTH THE QUESTIONS. THEREFORE THE D ECISION 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. 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, WH ICH 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.KAUSHALYA (SUPRA). 6 ITA NOS.1744 & 1745/KOL/2016 SHRI RANJIT KUMAR PAUL A.Y.2007-08 & 2012-13 13. IN THE CASE OF MAHESH M.GANDHI (SUPRA) THE MUM BAI ITAT THE ITAT HELD THAT THE DECISION OF THE HONBLE KARNATAKA HIGH COU RT 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 PEN ALTY PROCEEDINGS HAS HELD THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME AN D MERELY BECAUSE IN THE SHOW CAUSE NOTICE U/S.274 OF THE ACT, THERE IS NO M ENTION WHETHER THE PROCEEDINGS ARE FOR FURNISHING INACCURATE PARTICULA RS OR CONCEALING PARTICULARS OF INCOME, THAT WILL NOT VITIATE THE PENALTY PROCEE DINGS. IN THE PRESENT CASE THERE IS NO WHISPHER IN THE ORDER OF ASSESSMENT ON THIS A SPECT. WE HAVE POINTED OUT THIS ASPECT IN THE EARLIER PART OF THIS ORDER. HEN CE, 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 M UCH AS THE RATIO LAID DOWN IN THE SAID CASE WAS ONLY WITH REFERENCE TO SHOW CA USE NOTICE U/S.274 OF THE ACT. THE HONBLE COURT DID NOT LAY DOWN A PROPOSITION TH AT THE DEFECT IN THE SHOW CAUSE NOTICE WILL STAND CURED IF THE INTENTION OF T HE CHARGE U/S.271(1) (C ) IS DISCERNIBLE 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 HONBL E 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 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). 8. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE NO TICE 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 INAC CURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIK E OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSI TION OF PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD. COUNSEL FOR THE ASSE SSEE WHICH IS BASED ON THE DECISIONS 7 ITA NOS.1744 & 1745/KOL/2016 SHRI RANJIT KUMAR PAUL A.Y.2007-08 & 2012-13 REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS T O BE ACCEPTED. WE THEREFORE HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE CANCELLED. 9. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.02.2018. SD/- SD/- [M.BALAGANESH] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 02.02.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.SHRI RANJIT KUMAR PAUL, THANA ROAD, GANGARAMPUR, DAKSHIN DINAJPUR, PIN CODE- 733 124. 2. D.C.I.T., CENTRAL CIRCLE-XXVII, KOLKATA. 3. C.I.T.(A)-21, KOLKATA 4. C.I.T.- 2, KOLKAT A. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHES 8 ITA NOS.1744 & 1745/KOL/2016 SHRI RANJIT KUMAR PAUL A.Y.2007-08 & 2012-13