Anand Satishkumar Bhutada, Latur V. Income-tax Officer,

ITA 1756/PUN/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9554 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-05-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 22-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Initiation of penalty proceedings
• Section: 153A; 27; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI RAJESH KUMAR , AM . / ITA NO.1756/PUN/2014 / ASSESSMENT YEAR : 2005-06 ANAND SATISHKUMAR BHUTADA, 79-C, MARKET YARD, KAVA ROAD, LATUR - 413512 PAN : AIQPB0400M . / APPELLANT VS. THE INCOME TAX OFFICER, CENTRAL -1, NASHIK . RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : MS. ANN KAPTHUAMA DATE OF HEARING : 02.05.2017 / DATE OF PRONOUNCEMENT: 03.05.2017 / ORDER PER SUSHMA CHOWLA, JM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE IS AGAIN ST ORDER OF CIT(A)-I, NASHIK, DATED 25.08.2014 RELATING TO ASSESSMENT YEA R 2005-06 AGAINST PENALTY LEVIED PASSED UNDER SECTION 271(1)(C) OF TH E INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. DESPITE SERVICE OF NOTICE NONE APPEARED ON BEHAL F OF THE ASSESSEE AND WE PROCEED TO DECIDE THE PRESENT APPEAL AFTER HEARI NG THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. 3. BRIEFLY IN THE FACTS OF THE CASE SEARCH ACTION U NDER SECTION 132 (1) OF THE ACT WAS CARRIED OUT ON 28-08-2008 IN THE BHUTAD A GROUP OF CASES AT LATUR. THE RESIDENTIAL PREMISES AND BUSINESS PREMISES OF T HE ASSESSEE GROUP WERE ITA NO.1756/PUN/2014 2005-06 2 COVERED DURING THE SEARCH ACTION. DURING THE COURS E OF SEARCH, CERTAIN DOCUMENTS WERE SEIZED AND STATEMENT OF THE ASSESSEE WAS RECORDED. THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 153A OF THE ACT AND IN RESPONSE THERETO THE ASSESSEE FILED THE RETURN OF INCOME DEC LARING TOTAL INCOME OF RS.77,52,300/-. THE ASSESSING OFFICER NOTED THAT A SSESSEE HAD ORIGINALLY FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.2 ,52,300/-. HOWEVER, IN RESPONSE TO NOTICE ISSUED UNDER SECTION 153A OF THE ACT, THE ASSESSEE HAS DISCLOSED ADDITIONAL INCOME OF RS.75 LAKHS. SINCE THE ADDITIONAL INCOME OF RS.75 LAKHS WAS OFFERED FOR TAXATION AFTER THE SEAR CH ACTION, AS PER THE ASSESSING OFFICER, PENALTY PROCEEDINGS UNDER SECTIO N 274 R.W.S. 271(1)(C) OF THE ACT WERE SEPARATELY INITIATED. THE ASSESSEE DU RING THE COURSE OF SEARCH HAD DISCLOSED BUSINESS ACTIVITIES RUN UNDER THE NAM E OF M/S. ANAND TRADING COMPANY. THE ASSESSEE HAD DECLARED ADDITIONAL INCO ME @1.50% ON THE ESTIMATED TURNOVER AGAINST THE CASH DEPOSITS IN THE BANK ACCOUNTS, I.E. SOLAPUR JANATA SAHAKARI BANK AND JANTA SAHAKARI BAN K LTD., (OF M/S.ANAND TRADING COMPANY) PUNE BRANCHES AT LATUR. THE ASSES SEE WAS ASKED TO FURNISH THE DETAILS OF CASH DEPOSITS IN THE VARIOUS BANK ACCOUNTS AND IN REPLY THERETO THE ASSESSEE FURNISHED YEAR-WISE BANK CREDI TS, WHICH DETAILS ARE PLACED AT PAGE 3 OF THE ASSESSMENT ORDER. THE ASSE SSEE ALSO FURNISHED YEAR- WISE BREAKUP OF THE BUSINESS TURNOVER AND INCOME OF FERED BY IT. THE ASSESSING OFFICER OBSERVED THAT THE PLEA OF THE ASS ESSEE THAT IT HAD EARNED LESSER PROFIT PERCENTAGE THAN DECLARED DURING THE C OURSE OF SEARCH COULD NOT BE ACCEPTED. AGAINST THE TOTAL DEPOSITS IN THE BAN K ACCOUNT OF RS.66.84 CRORES PROFIT @1.50% WORKED OUT TO RS.1,00,26,914/- . THE ASSESSEE HAD SHOWN PROFIT OF RS.60 LAKHS ONLY IN THE RETURN OF I NCOME AND SINCE THERE WAS VARIATION IN THE TURNOVER, ADDITION OF RS.40,26,914 /- WAS MADE TO THE TOTAL INCOME ON ACCOUNT OF PROFIT FROM BUSINESS CARRIED O UT IN THE NAME OF M/S. ITA NO.1756/PUN/2014 2005-06 3 ANAND TRADING COMPANY. THE ASSESSING OFFICER FURTH ER OBSERVED THAT SINCE THE ASSESSEE HAD FILED INACCURATE PARTICULARS OF IN COME PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE SEPARATELY INITIATED. THE ASSESSING OFFICER DIRECTED THE ISSUE OF SHOW CAUSE NOTICE UND ER SECTION 274 R.W.S. 271(1)(C) OF THE ACT. 4. DURING THE PENALTY PROCEEDINGS, THE ASSESSING OF FICER OBSERVED THAT WHERE THE ASSESSEE HAD DECLARED THE ADDITIONAL INCO ME PURSUANT TO THE SEARCH OPERATION, THE ASSESSEE WAS LIABLE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. IN VIEW OF THE SAME, THE ASS ESSING OFFICER HELD THAT THE ASSESSEES CASE FITS INTO DEFAULT UNDER SECTION 271 (1)(C) OF THE ACT. THE ASSESSING OFFICER FURTHER HELD THAT IT IS AMPLY CLEAR THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF ITS INCOME. IN VIEW OF F ACTS, I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED HIS INCOME AND HAS RENDERED HIMSELF LIABLE FOR THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSING OFFICER THUS HELD THE ASSESSEE TO HAVE FURNISHED INACCURATE PARTICULA RS OF ITS INCOME AND THE ASSESSING OFFICER WAS SATISFIED THAT THE ASSESSEE H AS CONCEALED HIS INCOME AND WAS LIABLE FOR LEVY OF PENALTY UNDER SECTION 27 1(1)(C) OF THE ACT. 5. ON THE PERUSAL OF THE RECORD, THE MANDATE OF SEC TION 271(1)(C) OF THE ACT IS THAT WHERE THE ASSESSEE HAS CONCEALED ITS IN COME OR FURNISHED INACCURATE PARTICULARS OF INCOME, THEN THE ASSESSEE IS LIABLE FOR LEVY OF PENALTY FOR CONCEALMENT UNDER SECTION 271(1)(C) OF THE ACT. THE LEVY OF PENALTY IS ON EITHER OF THE TWO LIMBS OF SECTION 271(1)(C) OF THE ACT. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT IN THE PRESENT CASE WAS SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME AND CONSEQUENTLY WAS OF THE VIEW THAT INITIATION OF PENALTY PROCEEDI NGS 271(1)(C) OF THE ACT IS NECESSARY. CONSEQUENTLY HE DIRECTED THE ISSUE OF NOTICE UNDER SECTION 274 ITA NO.1756/PUN/2014 2005-06 4 R.W.S. 271(1)(C) OF THE ACT. HOWEVER, WHILE LEVYIN G THE PENALTY, THE ASSESSING OFFICER WAS SATISFIED THAT ASSESSEE HAD FILED INACC URATE PARTICULARS OF INCOME AND FURTHER SATISFIED THAT THE ASSESSEE HAS CONCEAL ED HIS INCOME AND HAS RENDERED HIMSELF LIABLE FOR PENALTY UNDER SECTION 2 71(1)(C) OF THE ACT. THE ASSESSING OFFICER IN THE FINAL ANALYSIS HAD HELD TH E ASSESSEE TO HAVE CONCEALED HIS INCOME AND ALSO FILED INACCURATE PART ICULARS OF INCOME. IN OTHER WORDS, THE ASSESSEE WAS HELD TO BE LIABLE FOR LEVY OF PENALTY FOR THE ADDITIONAL INCOME OF RS.75 LAKHS ON BOTH THE LIMBS OF SECTION 271(1)(C) OF THE ACT. 6. THERE IS NO MERIT IN THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER IN THIS REGARD WHEREIN HE HAS NOT COME TO A CONCLUS ION AS TO WHICH LIMB OF SECTION 271(1)(C) HAS BEEN FULFILLED BY THE ASSESSE E. IN ANY CASE, IN THE SATISFACTION RECORDED BY THE ASSESSING OFFICER, WHI LE INITIATING THE PENALTY PROCEEDINGS, HE WAS SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME WHEREAS THIS IS A CASE OF SEA RCH WHEREIN CERTAIN INCOME WAS NOT OFFERED TO TAX, HENCE AT BEST, IT IS A CASE OF CONCEALMENT OF INCOME AND NOT FURNISHING OF INACCURATE PARTICULARS OF INC OME. BE THAT AS MAY BE, THE ASSESSING OFFICER IN THE FINAL ANALYSIS HAS NOT LEV IED THE PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME BUT ALSO FOR CO NCEALING THE INCOME ON ONE ADDITION OF RS.75 LAKHS. THERE IS NO MERIT IN THE SAID ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE AC T. IN THIS REGARD, WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN KANHAIYALAL D. JAIN VS. ACIT IN ITA NOS.1201 TO 120 5/PUN/2014 RELATING TO ASSESSMENT YEARS 2003-04 TO 2007-08 ORDER DATED 30- 11-2016. THE TRIBUNAL IN KANHAIYALAL D. JAIN VS. ACIT (SUPRA) HELD AS UND ER : 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORD. THE ISSUE ARISING IN THE PRESENT BUNCH OF APPEALS IS JU RISDICTIONAL ISSUE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE RE QUIREMENT OF SECTION IS THAT WHERE THE ASSESSING OFFICER OR THE COMMISSIONER OF APPEALS OR THE PRINCIPAL COMMISSIONER OR COMMISSIONER, IN THE COURSE OF ANY PROCEEDINGS UNDER THE ITA NO.1756/PUN/2014 2005-06 5 ACT, IS SATISFIED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, TH EN HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY THE AMOUNTS AS S PECIFIED IN SUB-CLAUSE (III) WHICH WOULD BE IN ADDITION TO TAX, IF ANY, PAYABLE BY THE SAID PERSON. THE SECTION THUS REQUIRES THE CONCERNED OFFICER TO RECO RD SATISFACTION IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT, THAT THE PERSON H AS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF HIS INCOME. AFTER RECORDING THE SATISFACTION, DURING THE COURSE OF PENALTY PROCEEDINGS ALSO, THE CONCERNED OFFICER HAS COME TO A FINDING THAT AS TO WHETHER THE PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF SUCH INCOME AND THEREAFTER, LEVY THE PENALTY ACCORD INGLY. THE WORD USED BETWEEN THE TWO ACTS I.E. CONCEALMENT OF PARTICULAR S OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME IS OR. SO THE PENALTY LEVIED BY THE CONCERNED OFFICER IS ON SATISFACTION OF ANY OF THE LIMBS AND NOT THE SATISFACTION OF BOTH THE LIMBS. WHERE THE ASSESSEE HAD CONCEALE D THE PARTICULARS OF INCOME IN PARTICULAR CIRCUMSTANCES, THEN THE ASSESS ING OFFICER MAY RECORD SATISFACTION TO THAT EFFECT AND INITIATE PENALTY PR OCEEDINGS AND THEREAFTER ON FIXATION OF CHARGE, LEVY THE PENALTY FOR SUCH ACT O F CONCEALING THE PARTICULARS OF INCOME. SIMILARLY, IN CASES WHERE THE ASSESSEE CON CERNED HAD FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, THEN SIMILAR EXERCISE HAS TO BE CARRIED OUT BY THE CONCERNED OFFICER. 14. THE FIRST STAGE OF INVOCATION OF PROVISIONS OF SECTION 271(1)(C) OF THE ACT IS THE SATISFACTION TO BE RECORDED BY THE ASSES SING OFFICER, WHICH ADMITTEDLY, HAS TO BE DURING THE COURSE OF ASSESSME NT PROCEEDINGS. SO, WHERE THE ASSESSMENT PROCEEDINGS ARE PENDING, THEN THE ASSESSING OFFICER HAS TO APPLY HIS MIND AND ON BEING SATISFIED, HE HA S TO GIVE A FINDING THAT THE ASSESSEE BEFORE HIM HAS EITHER CONCEALED THE PARTIC ULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME IN RESPE CT OF THE ISSUE BEFORE HIM. THEREAFTER, THE NOTICE SHOULD BE ISSUED TO SUCH PER SON BY THE CONCERNED OFFICER, WHEREIN IT SHOULD BE CLEAR THAT THE ASSESS EE HAS TO JUSTIFY ITS CASE EITHER FOR CONCEALMENT OF INCOME OR FURNISHING OF I NACCURATE PARTICULARS OF INCOME. THERE MAY BE CASES WHERE THERE IS ISSUE OF BOTH CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME, BASED ON THE NATURE OF ADDITIONS, THEN IN SUCH CASES, SATISFACTI ON AND NOTICE THEREON SHOULD SPECIFY EXACT CHARGE AGAINST THE ASSESSEE. THE CHA RGE HAS TO BE FURTHER SPECIFIED WHILE COMPLETING PENALTY PROCEEDINGS AND THE ASSESSING OFFICER HAS TO COME TO A CONCLUSION AS TO WHETHER IT IS CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. TH E QUESTION WHICH FURTHER ARISES WHERE THE SATISFACTION RECORDED BY THE ASSES SING OFFICER AND THE NOTICE ISSUED THEREAFTER IS WITHOUT APPLICATION OF MIND, T HEN CAN THE SUBSEQUENT ORDER PASSED LEVYING PENALTY BE HELD TO BE VALID?. THE H ONBLE KARNATAKA HIGH COURT IN CIT & ANR. VS. MANJUNATHA COTTON AND GINNI NG FACTORY (SUPRA) HAD DEALT UPON THE ISSUE OF NOTICE UNDER SECTION 274 OF THE ACT FOR THE PURPOSE OF LEVYING PENALTY FOR CONCEALMENT AND OBSERVED AS UND ER:- 59. AS THE PROVISION STANDS, THE PENALTY PROCEEDIN GS CAN BE INITIATED ON VARIOUS GROUND SET OUT THEREIN. IF THE ORDER PAS SED BY THE AUTHORITY CATEGORICALLY RECORDS A FINDING REGARDING THE EXIST ENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN PENALTY PROCEEDI NGS IS INITIATED, IN THE NOTICE TO BE ISSUED UNDER SECTION 274, THEY COU LD CONVENIENTLY REFER TO THE SAID ORDER WHICH CONTAINS THE SATISFAC TION OF THE AUTHORITY WHICH HAS PASSED THE ORDER. HOWEVER, IF THE EXISTEN CE OF THE CONDITIONS COULD NOT BE DISCERNED FROM THE SAID ORD ER AND IF IT IS A CASE OF RELYING ON DEEMING PROVISION CONTAINED IN EXPLAN ATION-1 OR IN EXPLANATION-1(B), THEN THOUGH PENALTY PROCEEDINGS A RE IN THE NATURE OF CIVIL LIABILITY, IN FACT, IT IS PENAL IN NATURE. IN EITHER EVENT, THE PERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED IN SECTION 2 71 SHOULD BE MADE ITA NO.1756/PUN/2014 2005-06 6 KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEND IMPOSI NG PENALTY ON HIM AS THE SECTION 274 MAKES IT CLEAR THAT ASSESSEE HAS A RIGHT TO CONTEST SUCH PROCEEDINGS AND SHOULD HAVE FULL OPPOR TUNITY TO MEET THE CASE OF THE DEPARTMENT AND SHOW THAT THE CONDITIONS STIPULATED IN SECTION 271(1)(C) DO NOT EXIST AS SUCH HE IS NOT LI ABLE TO PAY PENALTY. THE PRACTICE OF THE DEPARTMENT SENDING A PRINTED FA RM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASS ESSEE NOT REBUTTING THE INITIAL PRESUMPTION IS SERIOUS IN NAT URE AND HE HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILITY. AS THE SAID PROVISIONS HAVE TO BE HELD TO BE STRICTLY CONSTRUED, NOTICE IS SUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY OTHERWISE, PRINCIPLES OF NATURAL JUSTICE IS OFFENDE D IF THE SHOW CAUSE NOTICE IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASSESSEE. 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 ATTRA CT BOTH THE OFFENCES AND IN SOME CASES THERE MAY BE OVERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES THE INITIATION OF THE PE NALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE OFFENCES. BUT DRAWING UP PENALTY PROCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSE E GUILTY OF ANOTHER OFFENCE OR FINDING HIM GUILTY FOR EITHER THE ONE OR THE OTHER CANNOT BE SUSTAINED IN LAW. IT IS NEEDLESS TO POINT OUT SATIS FACTION OF THE EXISTENCE OF THE GROUNDS MENTIONED IN SECTION 271(1)(C) WHEN IT IS A SINE QUA NON FOR INITIATION OR PROCEEDINGS, THE PENALTY PROC EEDINGS SHOULD BE CONFINED ONLY TO THOSE GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECIFICALLY STATED SO THAT THE ASSESSEE WOULD HAVE THE OPPORTUNITY TO MEET THOSE GROUNDS. AFTER, HE PLACES HIS VERSION AN D TRIES TO SUBSTANTIATE HIS CLAIM, IF AT ALL, PENALTY IS TO BE IMPOSED, IT SHOULD BE IMPOSED ONLY ON THE GROUNDS ON WHICH HE IS CALLED U PON TO ANSWER. IT IS NOT OPEN TO THE AUTHORITY, AT THE TIME OF IMPOSI NG PENALTY TO IMPOSE PENALTY ON THE GROUNDS OTHER THAN WHAT ASSESSEE WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENALTY PR OCEEDINGS MAY BE VALID AND LEGAL, THE FINAL ORDER IMPOSING PENALTY W OULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAINED. THUS ON CE THE PROCEEDINGS ARE INITIATED ON ONE GROUND, THE PENALTY SHOULD ALS O BE IMPOSED ON THE SAME GROUND. WHERE THE BASIS OF THE INITIATION OF P ENALTY PROCEEDINGS IS NOT IDENTICAL WITH THE GROUND ON WHICH THE PENAL TY WAS IMPOSED, THE IMPOSITION OF PENALTY IS NOT VALID. THE VALIDITY OF THE ORDER OF PENALTY MUST BE DETERMINED WITH REFERENCE TO THE INFORMATIO N, 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 VALIDATE 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 INCOME ARE DIF FERENT. THUS THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS TO COME TO THE CONCLUSION THAT WHETHER IS IT A CASE OF CONCEALMENT OF INCOME OR IS IT A CASE OF FURNISHING OF INACCURATE PARTICULARS. THE APEX COUR T IN THE CASE OF ASHOK PAI REPORTED IN [2007] 292 ITR 11 (SC) AT PAG E 19 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURATE PAR TICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THE GUJARAT HIGH COUR T IN THE CASE OF MANU ENGINEERING WORKS REPORTED IN [1980] 122 ITR 3 06 (GUJ) AND THE ITA NO.1756/PUN/2014 2005-06 7 DELHI HIGH COURT IN THE CASE OF CIT V. VIRGO MARKET ING P. LTD. REPORTED IN [2008] 171 TAXMAN 156, HAS HELD THAT LEVY OF PEN ALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSIT ION BEING UNCLEAR PENALTY IS NOT SUSTAINABLE. THEREFORE, WHEN THE ASS ESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT , THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. SIMILAR IS THE CASE FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE STANDARD PROF ORMA WITHOUT STRIKING OF THE RELEVANT CLAUSES WILL LEAD TO AN IN FERENCE AS TO NON- APPLICATION OF MIND . 15. THE HONBLE KARNATAKA HIGH COURT HAS LAID DOWN THE PROPOSITION THAT THE ASSESSING OFFICER IS TO BE SATISFIED IN THE COU RSE OF PROCEEDINGS THAT THERE IS EITHER CONCEALMENT OF INCOME OR FURNISHING OF IN ACCURATE PARTICULARS OF INCOME UNDER CLAUSE (C) TO SECTION 271(1) OF THE AC T. IT HAS BEEN CATEGORICALLY HELD THAT CONCEALMENT OF INCOME AND FURNISHING OF I NACCURATE PARTICULARS OF INCOME ARE DIFFERENT. THE HONBLE HIGH COURT HAS T HUS, LAID DOWN THAT THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS TO COME TO CONCLUSION THAT WHETHER IT IS CASE OF CONCEALMENT OF INCOME OR CASE OF FURN ISHING OF INACCURATE PARTICULARS OF INCOME. THE RELIANCE IN THIS REGARD WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN T. ASHOK PAI V S. CIT (2007) 292 ITR 11 (SC), WHEREIN AT PAGE 19 IT WAS HELD THAT CONCEA LMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY D IFFERENT CONNOTATION. APPLYING THE SAID PROPOSITION, IT WAS HELD THAT WHE RE THE ASSESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT , THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. SIMILARLY, FOR FURNISHING IN ACCURATE PARTICULARS OF INCOME, THE STANDARD PROFORMA WITHOUT STRIKING OF R ELEVANT CLAUSES, AS PER THE HONBLE HIGH COURT WOULD LEAD TO INFERENCE AS TO NO N-APPLICATION OF MIND. 16. FURTHER, THE HONBLE KARNATAKA HIGH COURT IN CI T VS. SSAS EMERALD MEADOWS (SUPRA) HAS DISMISSED THE APPEAL OF REVENUE , WHERE THE TRIBUNAL HAD ALLOWED THE APPEAL OF ASSESSEE HOLDING THAT THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 R.W.S. 271(1)(C ) OF THE ACT TO BE BAD IN LAW AS IT DOES NOT SATISFY WHICH LIMB OF SECTION 27 1(1)(C) OF THE ACT UNDER WHICH IT HAS BEEN INITIATED THE HONBLE HIGH COURT HAD RELIED ON DECISION OF DIVISION BENCH OF THE COURT RENDERED IN CIT & ANR. VS. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA). THE HONBLE SUPREME C OURT IN CIT VS. SSAS EMERALD MEADOWS (SUPRA) HAS DISMISSED THE SPECIAL L EAVE PETITION. 17. THE PUNE BENCH OF TRIBUNAL IN M/S. SAI VENKATA CONSTRUCTION VS. ADDL. CIT (SUPRA) AND IN SANJOG TARACHAND LODHA VS. ITO (SUPRA) HAVE APPLIED THE RATIO LAID DOWN BY THE HONBLE KARNATAK A HIGH COURT (SUPRA) AND HELD THAT WHERE THERE IS NO STRIKING OFF OF EITHER OF LIMBS, THEN NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT WAS I NVALID AND SUBSEQUENT PENALTY PROCEEDINGS WERE HELD TO BE VITIATED. 18. THE MUMBAI BENCH OF TRIBUNAL IN SANGHAVI SAVLA COMMODITY BROKERS P. LTD. VS. ACIT IN ITA NO.1746/MUM/2011, RELATING TO ASSESSMENT YEAR 2007-08, ORDER DATED 22.12.2015 WHILE DECIDING SIMI LAR ISSUE, WHEREIN THE ASSESSING OFFICER HAD INITIATED PENALTY PROCEEDINGS FOR CONCEALMENT OF PARTICULARS OF INCOME WITHOUT STRIKING INAPPROPRIAT E WORDS OR ANY PARTS OF NOTICE AND PROCEEDED TO LEVY PENALTY FOR CONCEALMEN T, THEN FOLLOWING THE RATIO LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT, THE TRIBUNAL HELD THAT NOTICE ISSUED FOR INITIATING PENALTY PROCEEDINGS WERE INVA LID AND CONSEQUENTLY PENALTY PROCEEDINGS WERE INVALID. ITA NO.1756/PUN/2014 2005-06 8 19. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY KOLKA TA BENCH OF TRIBUNAL IN SHRI DEEPAK KUMAR PATWARI VS. ACIT IN ITA NOS.616 T O 618/KOL/2013, RELATING TO ASSESSMENT YEARS 2007-08 TO 2009-10, ORDER DATED 03.02.2016 AND IT HAS BEEN FURTHER HELD THAT THE PROVISIONS OF SECTION 29 2B OF THE ACT CANNOT CURE THE BASIC DEFECT IN ASSUMPTION OF JURISDICTION AND COULD ONLY CURE THE MISTAKE, DEFECT OR OMISSION IN THE RETURN OF INCOME, ASSESSM ENT, NOTICE OR THE PROCEEDINGS. THE TRIBUNAL FURTHER HELD THAT SHOW C AUSE NOTICE AND THE REASONS MENTIONED IN THE SHOW CAUSE NOTICE WERE PAR T OF PROCESS OF NATURAL JUSTICE AND THE DEFECT IN SUCH NOTICE COULD NOT BE OVERLOOKED. SIMILAR PROPOSITION HAS FURTHER BEEN LAID DOWN IN OTHER DEC ISIONS OF VARIOUS BENCHES OF TRIBUNAL WHICH HAVE BEEN RELIED UPON BY THE ASSE SSEE BEFORE US. 20. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED HEAVY RELIANCE ON THE RATIO LAID DOWN BY THE HONBL E BOMBAY HIGH COURT IN CIT VS. SMT. KAUSHALYA (SUPRA). IN THE FACTS OF TH E CASE BEFORE THE HONBLE BOMBAY HIGH COURT, THE HONBLE HIGH COURT QUASHED T HE PENALTY LEVIED FOR ASSESSMENT YEAR 1967-68 AS THE SAME WAS IMPOSED WIT HOUT AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. IN RESPECT OF OTHER TWO YEARS WHERE THERE WAS NON-STRIKING OF INACCURATE PO RTION, THE HONBLE HIGH COURT HELD THAT THE SAME WOULD NOT INVALIDATE THE N OTICE ISSUED UNDER SECTION 274 OF THE ACT. IT WAS FURTHER HELD THAT THE ASSES SMENT ORDERS WERE ALSO MADE AND REASONS FOR ISSUING NOTICE UNDER SECTION 274 R. W.S. 271(1)(C) OF THE ACT WERE RECORDED BY THE ASSESSING OFFICER AND SINCE TH E ASSESSEE FULLY KNEW IN DETAIL THE EXACT CHARGE OF DEPARTMENT AGAINST HIM, IT COULD NOT BE SAID THAT EITHER THERE WAS NON-APPLICATION OF MIND BY THE ITO OR SO-CALLED AMBIGUITY WORDING IN THE NOTICE IMPAIRED OR PREJUDICED THE RI GHT OF ASSESSEE OF REASONABLE OPPORTUNITY OF BEING HEARD. THE JURISDI CTIONAL HIGH COURT DELIBERATED UPON THE PROVISIONS OF SECTION 274 OF T HE ACT WHICH CONTAINED PRINCIPLE OF NATURAL JUSTICE OF THE ASSESSEE BEING HEARD BEFORE LEVYING PENALTY. IT ALSO HELD THAT MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING OF INAPPROPRIATE PORTION COULD NOT ITSELF BE INVALIDAT ED THE NOTICE. IT WAS HELD THAT THE ENTIRE FACTUAL BACKGROUND WOULD FALL FOR CONSID ERATION IN THE MATTER AND NO ONE ASPECT WOULD BE DECISIVE. 21. IN RESPECT OF ASSESSMENT YEAR 1967-68, THE HON BLE HIGH COURT IN CIT VS. SMT. KAUSHALYA (SUPRA) ACKNOWLEDGED THAT THERE COULD EXIST A CASE WHERE VAGUENESS AND AMBIGUITY IN THE NOTICE COULD DEMONST RATE NON-APPLICATION OF MIND BY THE AUTHORITY AND / OR ULTIMATE PREJUDICE T O THE RIGHT OF OPPORTUNITY OF HEARING CONTEMPLATED UNDER SECTION 274 OF THE ACT. THE SHOW CAUSE NOTICE FOR ASSESSMENT YEAR 1967-68 WAS ISSUED EVEN BEFORE THE ASSESSMENT ORDER WAS MADE AND WHERE THE ASSESSEE HAD NO KNOWLEDGE OF EXACT CHARGE OF DEPARTMENT AGAINST HIM AS IN THE NOTICE NOT ONLY TH ERE WAS USE OF WORD OR BETWEEN THE GROUP OF CASES BUT THERE WAS USE OF WOR D DELIBERATELY ALSO. THE HONBLE HIGH COURT HELD THAT NOTICE CLEARLY DEMONST RATED NON-APPLICATION OF MIND ON THE PART OF ASSESSING OFFICER. THE VAGUENE SS AND AMBIGUITY IN THE NOTICE HAD ALSO PREJUDICED THE RIGHT OF REASONABLE OPPORTUNITY TO THE ASSESSEE SINCE HE DID NOT KNOW OF EXACT CHARGES HE HAD TO FA CE. IN THIS BACKGROUND, QUASHING OF PENALTY PROCEEDINGS FOR ASSESSMENT YEAR 1967-68 WAS HELD TO BE JUSTIFIED. APPLYING THE SAID PRINCIPLE LAID DOWN B Y THE JURISDICTIONAL HIGH COURT, APPLICATION OF MIND BEFORE ISSUING THE NOTIC E UNDER SECTION 274 OF THE ACT HAS TO BE CONSIDERED. THE HONBLE HIGH COURT C LEARLY HELD THAT WHERE THERE IS VAGUENESS AND AMBIGUITY IN THE NOTICE ISSU ED WHICH COULD DEMONSTRATE NON-APPLICATION OF MIND BY THE AUTHORIT Y WHICH IN TURN, WOULD ULTIMATELY PREJUDICE THE RIGHT OF OPPORTUNITY OF HE ARING OF THE ASSESSEE AS CONTEMPLATED UNDER SECTION 274 OF THE ACT, THEN SUC H NOTICE IS INVALID. ITA NO.1756/PUN/2014 2005-06 9 22. NOW, COMING TO THE FACTS OF THE CASE BEFORE US, WHEREIN SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT ON CHHORIYA GRO UP OF CONCERNS ON 22.08.2008 AND DECLARATION OF RS.11.44 CRORES WAS M ADE IN THE HANDS OF WHOLE GROUP FOR VARIOUS YEARS. CONSEQUENT TO THE N OTICES ISSUED UNDER SECTION 153A OF THE ACT FOR VARIOUS YEARS, DIFFEREN T ENTITIES FILED THE RETURN OF INCOME FOR THE RESPECTIVE YEARS AND CUMULATIVELY FO R RS.13.99 CRORES AS ADDITIONAL INCOME. THE INCOME WAS DECLARED ON ACCO UNT OF ON-MONEY ON SALE OF PLOTS, WHICH WAS DETECTED FROM THE DOCUMENTS SEI ZED DURING THE COURSE OF SEARCH. ADMITTEDLY, EXPLANATION 5A TO SECTION 271( 1)(C) OF THE ACT IS ATTRACTED IN SUCH CASES. HOWEVER, THE CASE OF ASSESSEE BEFOR E US IS THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT PROCEEDINGS HAD TO BE SATISFIED THAT THE ASSESSEE HAD EITHER CONCEALED THE INCOME OR FUR NISHED INACCURATE PARTICULARS OF INCOME AND IS LIABLE TO LEVY OF PENA LTY UNDER SECTION 271(1)(C) R.W.S. EXPLANATION 5A OF THE ACT. THE NOTICE IS TO BE ISSUED TO THE ASSESSEE UNDER SECTION 274 OF THE ACT. BEFORE ISSUING SUCH NOTICE, SATISFACTION HAS TO COME OUT FROM THE PROCEEDINGS GOING ON BEFORE THE A SSESSING OFFICER. THE PERUSAL OF ASSESSMENT ORDER PASSED IN THE PRESENT C ASE REFLECTS THAT THE ASSESSING OFFICER WHILE INITIATING PROCEEDINGS HAS RECORDED SATISFACTION AS TO THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F INCOME AND HAS ALSO CONCEALED THE INCOME. THE ONLY SOURCE OF ADDITION IN THE HANDS OF ASSESSEE IS ADDITIONAL INCOME OFFERED BY THE ASSESSEE PURSUA NT TO SEARCH OPERATIONS. IN SUCH CIRCUMSTANCES, IT IS CATEGORICALLY A CASE O F CONCEALMENT. HOWEVER, THE ASSESSING OFFICER REFERS TO BOTH THE LIMBS OF S ECTION 271(1)(C) OF THE ACT AND THE SATISFACTION RECORDED IN THIS CASE SUFFERS FROM INFIRMITY. FURTHER, EVEN IN THE NOTICE ISSUED UNDER SECTION 274 OF THE ACT, IRRELEVANT PART HAS NOT BEEN STRUCK OFF. WHILE COMPLETING PENALTY PROCEEDINGS A LSO, THE ASSESSING OFFICER MAKES REFERENCE TO BOTH THE LIMBS I.E. CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME AND IN THE FINA L, LEVIES PENALTY FOR CONCEALMENT OF INCOME. 23. HOWEVER, THE QUESTION WHICH IS RAISED BEFORE US BY WAY OF ADDITIONAL GROUND OF APPEAL IS ROOT OF START OF THE PROCEEDING S I.E. RECORDING OF SATISFACTION AND THE ISSUE OF NOTICE, WHICH HAS BEE N CHALLENGED BY THE ASSESSEE TO BE INVALID. APPLYING THE RATIO LAID DO WN BY THE HONBLE KARNATAKA HIGH COURT IN CIT & ANR. VS. MANJUNATH COTTON AND G INNING FACTORY (SUPRA) AND CIT VS. SSAS EMERALD MEADOWS (SUPRA) AND IN VI EW OF SLP BEING DISMISSED, WE FIND MERIT IN THE PLEA OF ASSESSEE TH AT THE SATISFACTION RECORDED IN THE PRESENT CASE TO INITIATE PENALTY PROCEEDINGS BOTH FOR CONCEALMENT OF INCOME AND FURNISHING OF PARTICULARS OF INCOME AGAI NST ADDITIONAL INCOME OFFERED BY THE ASSESSEE IS INCORRECT. FURTHER, WHE RE THE ASSESSEE IS NOT AWARE OF EXACT CHARGE AGAINST HIM, THE AMBIGUITY IN THE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT BY NOT STRI KING OF PORTION WHICH IS NOT APPLICABLE, PREJUDICE THE RIGHT OF REASONABLE OPPOR TUNITY TO THE ASSESSEE, AS HE WAS NOT MADE AWARE OF EXACT CHARGE HE HAD TO FAC E. IT IS A CLEAR-CUT CASE OF CONCEALMENT SINCE THE ASSESSEE HAD OFFERED ADDIT IONAL INCOME PURSUANT TO SEARCH CARRIED OUT AT ITS PREMISES. IT IS NOT THE CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AND HENCE, THE ASSESSING OFFI CER SHOULD HAVE RECORDED THE SATISFACTION ACCORDINGLY AND ISSUED THE NOTICE ACCORDINGLY. 24. WE FIND NO MERIT ON THE PARTIAL RELIANCE PLACED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE DECISION OF JURISDICTIONAL HIGH COURT IN CIT VS. SMT. KAUSHALYA (SUPRA). THE HONBLE HIGH COURT HAS CLEARLY LAID DOWN THE PROPOSITION THAT THE ASSESSIN G OFFICER HAS TO MAKE THE ASSESSEE FULLY AWARE OF EXACT CHARGE OF THE DEPARTM ENT AGAINST HIM. AS POINTED OUT, IN PRESENT CASE, IN THE ASSESSMENT ORD ER ITSELF WHILE RECORDING SATISFACTION FOR INITIATING PROCEEDINGS UNDER SECTI ON 271(1)(C) OF THE ACT, EXACT CHARGE OF THE DEPARTMENT AGAINST THE ASSESSEE IS NO T CLEAR. THE ASSESSING OFFICER RECORDS THE SATISFACTION FOR INITIATING PEN ALTY PROCEEDINGS ON BOTH THE COUNTS I.E. CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE HONBLE BOMBAY HIGH COURT HAD ALSO UPH ELD THE QUASHING OF ITA NO.1756/PUN/2014 2005-06 10 PENALTY PROCEEDINGS FOR ASSESSMENT YEAR 1967-68 TO BE JUSTIFIED ON ACCOUNT OF VAGUENESS AND AMBIGUITY IN THE NOTICE ISSUED. BUT THE HONBLE HIGH COURT FURTHER HELD THAT WHERE THE ASSESSEE WAS FULLY AWAR E OF EXACT CHARGE OF THE DEPARTMENT AGAINST HIM, THEN TECHNICAL NON-STRIKING OF CERTAIN TERMS IN THE NOTICE WOULD NOT INVALIDATE THE PROCEEDINGS. WHERE THERE IS DEFAULT IN THE FIRST STAGE OF MAKING THE ASSESSEE AWARE OF EXACT CHARGE OF THE DEPARTMENT, THEN INITIATION OF PENALTY PROCEEDINGS ARE VITIATED AND THE SAME ARE TO BE QUASHED. THE ISSUE OF NOTICE UNDER SECTION 274 OF THE ACT ON SUCH VAGUENESS AND AMBIGUITY MAKES SUCH NOTICE INVALID AND PROCEEDINGS THEREAFTER ARE TO BE QUASHED. 25. THE HONBLE SUPREME COURT IN T. ASHOK PAI VS. C IT (SUPRA) HAD HELD AS UNDER:- 23. SECTION 271(1)(C) REMAINS A PENAL STATUTE. TH E RULE OF STRICT CONSTRUCTION SHALL APPLY THERETO. THE INGREDIENTS FOR IMPOSING PENALTY REMAIN THE SAME. THE PURPOSE OF THE LEGISLATURE TH AT IT IS MEANT TO BE A DETERRENT TO TAX EVASION IS EVIDENCED BY THE INCR EASE IN THE QUANTUM OF PENALTY, FROM 20 PER CENT UNDER THE 1922 ACT TO 300 PER CENT IN 1985. 24. CONCEALMENT OF INCOME AND FURNISHING OF INAC CURATE PARTICULARS CARRY DIFFERENT CONNOTATIONS. CONCEAL MENT REFERS TO A DELIBERATE ACT ON THE PART OF THE ASSESSEE. A MERE OMISSION OR NEGLIGENCE WOULD NOT CONSTITUTE A DELIBERATE ACT OF SUPPRESSION VERY OR SUGGESTION FALSI. 26. WHERE CONCEALMENT OF INCOME AND FURNISHING OF I NACCURATE PARTICULARS OF INCOME ARE TWO DIFFERENT CONNOTATIONS, THEN AS P ER PROVISIONS OF THE ACT, THE SATISFACTION HAS TO BE RECORDED BY THE ASSESSING OF FICER BEFORE INITIATING PENALTY PROCEEDINGS AS TO UNDER WHICH LIMB THE CASE OF ASSESSEE FALLS. IN THE PRESENT SET OF FACTS, THE SATISFACTION AS RECORDED BY THE ASSESSING OFFICER WHICH IS EVIDENT FROM THE ASSESSMENT ORDER ITSELF D OES NOT ESTABLISH THE CASE OF REVENUE AGAINST THE ASSESSEE THAT IT IS LIABLE F OR LEVY OF PENALTY FOR CONCEALMENT UNDER WHICH LIMB I.E. FOR CONCEALMENT O F INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE NOTICE IS SUED UNDER SECTION 274 OF THE ACT BY THE ASSESSING OFFICER ALSO DOES NOT SHOW CAUSE THE ASSESSEE AS TO MAKE HIM AWARE OF EXACT CHARGE LEVIED AGAINST HIM. IN THE ABSENCE OF SAME, IT CAUSES PREJUDICE TO THE RIGHT OF REASONABLE OPPO RTUNITY TO BE ALLOWED TO THE ASSESSEE BEFORE LEVY OF PENALTY UNDER SECTION 271(1 )(C) OF THE ACT. CONSEQUENTLY, PENALTY NOTICE ISSUED IN THE PRESENT CASE SUFFERS FROM INFIRMITIES I.E. LACK OF SATISFACTION AND LACK OF N OTICE BEING ISSUED IN MAKING THE ASSESSEE AWARE OF EXACT CHARGE AGAINST HIM, HENCE T HE SAME IS QUASHED. THE PENALTY PROCEEDINGS COMPLETED PURSUANT TO SUCH NOTICE ARE VITIATED AND THE SAME ARE HELD TO BE INVALID. 27. NOW, COMING TO THE MERITS OF CASE, THE ASSESSEE HAD OFFERED ADDITIONAL INCOME ON ACCOUNT OF ON-MONEY ON SALE OF PLOTS. TH E ASSESSING OFFICER HAD ACCEPTED THE SAME AND HAD INITIATED PENALTY PROCEED INGS UNDER SECTION 271(1)(C) OF THE ACT. THE CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS RELATING TO SECTION 271(1)(C) OF THE ACT ISSUED ENH ANCEMENT NOTICE TO THE ASSESSEE. THEREAFTER, HE HAD GONE THROUGH THE SEIZ ED DOCUMENTS AND ELABORATELY REFERRED TO THEM AND EVEN REPRODUCED TH E SCANNED COPIES OF SUCH DOCUMENTS AND COMES TO CONCLUSION THAT LOANS WERE R ECEIVED FROM RATANLAL BAFNA, BUT STILL UPHOLDS THE PENALTY LEVIED UNDER S ECTION 271(1)(C) OF THE ACT. ONCE THE FINDING OF CIT(A) IS THAT THESE ARE LOANS RECEIVED FROM BAFNA AND ARE NOT ON-MONEY RECEIVED ON SALE OF PLOTS, THEN IN CAS ES WHERE PENALTY PROCEEDINGS HAVE BEEN INITIATED ON A DIFFERENT FOOT ING AND THE CIT(A) REVERSES THE SAME AND HOLDS THE SAME TO BE LOANS RECEIVED BY THE ASSESSEE, THERE IS CHANGE IN OPINION AND BASIS FOR LEVY OF PENALTY FOR CONCEALMENT VARIES. IN SUCH CIRCUMSTANCES, THERE IS NO MERIT IN LEVY OF PE NALTY UNDER SECTION ITA NO.1756/PUN/2014 2005-06 11 271(1)(C) OF THE ACT AND THERE IS NO MERIT AT ALL I N LEVYING THE PENALTY @ 150%. ACCORDINGLY, WE ALLOW THE CLAIM OF ASSESSEE EVEN ON MERITS. THUS, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AND ADDITI ONAL GROUND OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 7. THE ISSUE ARISING IN THE PRESENT APPEAL BEFORE U S IS SIMILAR TO THE ISSUE BEFORE THE PUNE BENCH OF THE TRIBUNAL AND IN VIEW O F OUR DELIBERATIONS IN THE PARAS HEREINABOVE WE FIND NO MERIT IN THE LEVY OF P ENALTY UNDER SECTION 271(1)(C) OF THE ACT AND ACCORDINGLY THE ASSESSING OFFICER IS DIRECTED TO DELETE THE SAME. THE GROUNDS OF APPEAL RAISED BY THE ASSE SSEE ARE THUS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON THIS 3 RD DAY OF MAY, 2017. SD/- SD/- (RAJESH KUMAR) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; DATED : 3 RD MAY, 2017. SATISH / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A)-I, NASHIK; 4. / THE CIT-I, NASHIK; 5. , , / DR A, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER // TRUE COPY // / ASSISTANT REGISTRAR, , / ITAT, PUNE