Raviraj Vikas Takawane, Pune V. Assistant Commissioner of Income-tax,

ITA 1875/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0280 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-12-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 13-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARI KRISHAN
• Keywords: Search and seizure; Document seized; Opportunity of being heard; Principle of natural justice; Retrospective amendment; Initiation of penalty proceedings; Documents seized
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO S . 1871 TO 1875 /PN/20 1 4 / ASSESSMENT YEAR S : 2005 06, 20 0 7 - 0 8 TO 20 10 - 11 SHRI RAVIRAJ VIKAS TAKAWAN E , RAJ YOG BUNGALOW, PLOT NO. 10, SECTOR NO.28, PRADHIKARAN, SECTOR NO.28, PRADHIKARAN, PUNE 411 044 . / APPELLANT PAN: ADUPT3134H VS. ASSISTANT COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 2(3), PUNE. . / RESPONDENT / APPELLANT BY : S HRI HARI KRISHAN / RESPONDENT BY : S HRI SUHAS KULKARNI / DATE OF HEARING : 1 9 . 1 2 .201 6 / DATE OF PRONOUNCEMENT: 28 . 12 .201 6 / ORDER PER SUSHMA CHOWLA, J M : PER SUSHMA CHOWLA, J M : THIS BUNCH OF FIVE APPEALS FILED BY THE ASSESSEE ARE AGAINST CONSOLIDATED ORDER OF CIT(A) - CENTRAL, PUNE, DATED 11.07.2014 RELATING TO ASSESSMENT YEARS 2005 - 06, 2007 - 08 TO 2010 - 11 AGAINST RESPECTIVE ORDERS LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . ITA NO S . 1871 TO 1875 /PN/20 1 4 SHRI RAVIRAJ VIKAS TAKAWAN, 2 2. ALL THE APPEALS RELATING TO THE SAME ASSESSEE ON IDENTICAL ISSUES WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, REFERENCE IS BEING MADE TO THE FACTS AND ISSUES IN ITA NO.1871/PN/2014 TO ADJUDICATE THE ISSUE. 3. THE ASSESSEE IN ITA NO.1871/PN/2014 HAS RAIS ED THE FOLLOWING GROUNDS OF APPEAL: - 1 . IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T (A) H AS FAILED TO APPRECIATE THAT THE INCOME DECLARED BY THE APPELLANT IN THE RETURN OF INCOME FILED AS PER STATEMENT U/S 132(4) OF THE IT ACT AND THEREFORE THE PENALTY LEVIED BY THE LEARNED ASSESSING OFFICER U/S 271[1] [C] OF THE I.T. ACT 1961 BY THE LEARNED ASSESSING OFFICER AND AS CONFIRMED BY THE LEARNED C.I.T.[A] BEING BAD IN LAW THE SAME MAY PLEASE BE DELETED. 2 . THE APPELLANT CRAVES THE PERMISSION TO ADD, AMEND, MODIFY, ALTER, REVISE, SUBSTITUTE, DELETE ANY OR ALL GROUNDS OF APPEAL , IF DEEMED NECESSARY AT THE TIME OF HEARING OF THE APPEAL. 4 . THE PRESENT APPEALS WERE FILED AFTER DELAY OF THREE DAYS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN FACT THE DELAY AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN FACT THE DELAY WAS OF ONE DAY SINCE TWO DAYS WERE SATURDAY AND SUNDAY AND THE APPEAL WAS FILED AFTER THE NEXT WORKING DAY. BECAUSE OF SMALLNESS OF THE DELAY, WE CONDONE THE DELAY IN FILING THE APPEALS LATE AND PROCEED TO DECIDE THE APPEALS ON THE ISSUES RAISED. 5 . THE ISSUE ARISING IN THE PRESENT BUNCH OF APPEALS IS AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT . 6 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN THIS REGARD POINTED OUT THAT THE ASSESSEE HAD DECLARED ADDITIONAL INCOME PURSUANT TO THE SEARCH ON THE PREMISES OF ASSESSEE WHICH WAS ADDED AS ADDITIONAL INCOME IN THE RETURN OF INCOME AND THEREAFTE R, PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIED. THE FIRST OBJECTION RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS AS TO WHETHER EXPLANATION 5A TO SECTION ITA NO S . 1871 TO 1875 /PN/20 1 4 SHRI RAVIRAJ VIKAS TAKAWAN, 3 271(1)(C) OF THE ACT IS ATTRACTED. THE SECOND LIMB OF OBJECTION OF THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IS THAT THE ASSESSING OFFICER HAS FAILED TO RECORD SATIS FACTION AS TO WHETHER THE ASSESSEE HAS CONCEALED PAR TICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME AND IN THE ABSENCE OF THE SA ME, THERE IS NO MERIT IN LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN VIEW OF RULE 29 OF ITAT RULES, THE ASSESSEE CAN RAISE THE SAID JURISDICTIONAL ISSUE DURING THE COURSE O F HEARING. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED OUT THAT EVEN IN THE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT, THERE IS NO STRIKING OF EITHER OF THE LIMBS. IN THIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN KANHAIYALAL D. JAIN VS. ACIT IN ITA NOS.1201 TO 1205/PN/2014, RELATING TO ASSESSMENT YEARS 2003 - 04 TO 2007 - 08 . 7 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, POINTED OUT THAT LOOKING AT THE PROVISIONS OF SECTION 271(1)( 1 B) OF THE ACT , WHERE DIRECTION HAS BEEN GIVEN BY THE ASSESSING OFFICER TO INITIATE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT ; HENCE SATISFACTION HAS BEEN RECORDED. THUS, THERE IS NO MERIT IN THE PLEA OF THE ASSESSEE IN THIS REGARD. HE FURTHER PLACED RELIANCE ON THE ORDERS OF ASSESSING OFFICER AND CIT(A). 8 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. BRIEFLY, IN THE FACTS OF THE CASE, SEARCH UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THE SIDDHESHWAR GROUP OF CASES ON 27.09.2010. THE PROCEEDINGS AGAINST THE ASSESSEE WERE INITIATED UNDER SE CTION 153A OF THE ACT AND IN RESPONSE, THE ASSESSEE FILED RETURNS OF INCOME IN THE RESPECTIVE YEARS AND OFFERED ADDITIONAL INCOME. DURING THE COURSE OF SEARCH, THE ASSESSEE OFFERED ADDITIONAL INCOME ITA NO S . 1871 TO 1875 /PN/20 1 4 SHRI RAVIRAJ VIKAS TAKAWAN, 4 IN RESPECT OF VARIOUS ASSESSMENT YEARS AT RS.1,94,26,374 / - FOR ASSESSMENT YEARS 2005 - 06, 2007 - 08 TO 2010 - 11 . THE BREAK - UP OF INCOME OFFERED BY THE ASSESSEE FROM YEAR TO YEAR IS AVAILABLE UNDER PARA 3 AT PAGE 2 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER ACCEPTED THE ADDITIONAL INCOME OFFERED BY THE ASSESSE E IN THE RETURNS OF INCOME AND WAS OF THE VIEW THAT SINCE THE ADDITIONAL INCOME WAS OFFERED ONLY AS A RESULT OF SEARCH ACTION IN HIS CASE, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE BEING SEPARATELY INITIATED. THEREAFTER, HE DIRECTS THAT NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT WAS INITIATED. SUCH WAS THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT IN ASSESSMENT YEAR 2005 - 06. IN ASSESSMENT YEAR 2007 - 08, THE ASSESSING OFFICER AFTER ACCEPTING THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE WAS OF THE VIEW THAT WHERE THE ADDITIONAL INCOME WAS OFFERED FOR TAXATION ONLY AS A RESULT OF SEARCH ACTION IN HIS CASE, PENALTY PROCEEDINGS UND ER SECTION 271(1)(C) OF THE ACT WERE SEPARATELY BEING INITIATED IN THE CASE OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. SIMILAR OBSERVATIONS HAVE BEEN MADE BY THE ASSESSING OFFICER IN ASSESSMENT YEARS 2008 - 09 TO 2010 - 11 . THE CASE OF THE ASSESSEE BEFORE US IS IN THE ABSENCE OF SATISFACTION BEING RECORDED AS TO WHICH LIMB OF SECTION 271(1)(C) OF THE ACT IS SATISFIED, THEN SUCH SATISFACTION RECORDED BY THE ASSESSING OFFICER TO INITIATE PENALTY PROCEEDINGS BOTH FOR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME AGAINST THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE IS INCORRECT. IT IS FURTHER CONTENDED THAT WHERE THE ASSESSEE IS NOT AWARE OF EXACT CHARGE AGAINST HIM , THE AMBIGUITY IN THE NOTICE ISSUED, THEREAFTER WITHOUT STRIKING OFF OF INAPPLICABLE PORTION, IT PREJUDICES THE RIGHT OF REASONABLE OPPORTUNITY ALLOWED TO THE ASSESSEE TO MEET THE CASE OF REVENUE, IN THE ABSENCE OF EXACT CHARGE HE HAD TO FACE. IN THE FACTS OF THE PRESENT CASE, WHERE THE ADD ITIONAL INCOME WAS OFFERED PURSUANT TO SEARCH, IT WAS CLEAR - CUT CASE OF CONCEALMENT OF INCOME ITA NO S . 1871 TO 1875 /PN/20 1 4 SHRI RAVIRAJ VIKAS TAKAWAN, 5 AND THE ASSESSING OFFICER SHOULD HAVE RECORDED SATISFACTION ACCORDINGLY AND ISSUE D NOTICE. THE ASSESSING OFFICER HAD LEVIED PENALTY UNDER SECTION 271(1)(C) OF TH E ACT WHICH WAS CONFIRMED BY THE CIT(A), AGAINST WHICH THE ASSESSEE IS IN APPEAL. 9 . WE FIND THAT SIMILAR ISSUE OF RECORDING OF SATISFACTION BY THE ASSESSING OFFICER BEFORE ISSUE OF NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT AROSE BEFORE THE TRI BUNAL IN KANHAIYALAL D. JAIN VS. ACIT (SUPRA), WHEREIN IT WAS HELD AS UNDER: - 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT BUNCH OF APPEALS IS JURISDICTIONAL ISSUE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE REQUIREMENT 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 ACT, IS SATISFIED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, THEN HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY THE AMOUNTS AS SPECIFIED 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 RECORD SATISFACTION IN THE COUR SE OF ANY PROCEEDINGS UNDER THE ACT, THAT THE PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF HIS INCOME. AFTER RECORDING THE SATISFACTION, DURING THE COURSE OF PENALTY PROCEEDINGS ALSO, 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 FURNISHED INACCURATE PARTICULARS OF SUCH INCOME AND THEREAFTER, LEVY THE PENALTY ACCORDINGLY. THE WORD USED BETWEEN THE TWO ACTS I.E. CONCEALMENT OF PARTICULARS 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 CONCEALED THE PARTICULARS OF INCOME IN PARTICULAR CIRCUMSTANCES, THEN THE ASSESSING OFFICER MAY RECORD SATISFACTION TO THAT EFFECT AND INITIATE PENALTY PROCEEDINGS AND THEREAFTER ON FIXATION OF CHARGE, LEVY THE PENALTY FOR SUCH ACT OF CONCEALING THE PARTICULARS OF INCOME. SIMILAR LY, IN CASES WHERE THE ASSESSEE CONCERNED 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 S ATISFACTION TO BE RECORDED BY THE ASSESSING OFFICER, WHICH ADMITTEDLY, HAS TO BE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. SO, WHERE THE ASSESSMENT PROCEEDINGS ARE PENDING, THEN THE ASSESSING OFFICER HAS TO APPLY HIS MIND AND ON BEING SATISFIED, HE HAS TO GIVE A FINDING THAT THE ASSESSEE BEFORE HIM HAS EITHER CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME IN RESPECT OF THE ISSUE BEFORE HIM. THEREAFTER, THE NOTICE SHOULD BE ISSUED TO SUCH PERSON BY THE CONCERNED OFFICE R, WHEREIN IT SHOULD BE CLEAR THAT THE ASSESSEE HAS TO JUSTIFY ITS CASE EITHER FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE 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, SATISFACTION AND NOTICE THEREON SHOULD SPECIFY EXACT CHARGE AGAINST THE ASSESSEE. THE CHARGE HAS TO BE FURTHER SPECIFIED WHILE COMPLETING PENALTY PROCEEDINGS AND THE ASSESSING OF FICER HAS TO COME TO A CONCLUSION AS TO WHETHER IT IS CASE OF CONCEALMENT OF INCOME OR ITA NO S . 1871 TO 1875 /PN/20 1 4 SHRI RAVIRAJ VIKAS TAKAWAN, 6 FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE QUESTION WHICH FURTHER ARISES WHERE THE SATISFACTION RECORDED BY THE ASSESSING OFFICER AND THE NOTICE ISSUED THEREAF TER IS WITHOUT APPLICATION OF MIND, THEN CAN THE SUBSEQUENT ORDER PASSED LEVYING PENALTY BE HELD TO BE VALID?. THE HONBLE KARNATAKA HIGH COURT IN CIT & ANR. VS. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) HAD DEALT UPON THE ISSUE OF NOTICE UNDER SECTIO N 274 OF THE ACT FOR THE PURPOSE OF LEVYING PENALTY FOR CONCEALMENT AND OBSERVED AS UNDER: - 59. AS THE PROVISION STANDS, THE PENALTY PROCEEDINGS CAN BE INITIATED ON VARIOUS GROUND SET OUT THEREIN. IF THE ORDER PASSED BY THE AUTHORITY CATEGORICALLY RECORD S A FINDING REGARDING THE EXISTENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN PENALTY PROCEEDINGS IS INITIATED, IN THE NOTICE TO BE ISSUED UNDER SECTION 274, THEY COULD CONVENIENTLY REFER TO THE SAID ORDER WHICH CONTAINS THE SATISFACTION OF THE AUTHOR ITY WHICH HAS PASSED THE ORDER. HOWEVER, IF THE EXISTENCE OF THE CONDITIONS COULD NOT BE DISCERNED FROM THE SAID ORDER AND IF IT IS A CASE OF RELYING ON DEEMING PROVISION CONTAINED IN EXPLANATION - 1 OR IN EXPLANATION - 1(B), THEN THOUGH PENALTY PROCEEDINGS AR E 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 271 SHOULD BE MADE KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEND IMPOSING PENALTY ON HIM AS THE SECTION 274 MAKES IT CLEAR THAT 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 EXIST AS SUCH HE IS NOT LIABLE TO PAY PENALTY. THE PRACTICE OF THE DEPARTMENT SENDING A PRINTED FARM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NOT REBUTTING THE INITIAL PRESUMPTION IS SERIOUS IN NATURE AND HE HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILITY. AS THE SAID PROVISIONS PENALTY FROM 100% TO 300% OF THE TAX LIABILITY. AS THE SAID PROVISIONS HAVE TO BE HELD TO BE STRICTLY CONSTRUED, NOTICE ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY OTHERWISE, PRINCIPLES OF NATURAL JUSTICE IS OFFENDED 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, THAT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICU LARS OF INCOME. NO DOUBT, THE FACTS OF SOME CASES MAY ATTRACT BOTH THE OFFENCES AND IN SOME CASES THERE MAY BE OVERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES THE INITIATION OF THE PENALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE OFFENCES. BUT DRAWING UP PE NALTY PROCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSEE 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 SATISFACTION OF THE EXISTENCE OF THE GROUNDS MENTIONED IN SEC TION 271(1)(C) WHEN IT IS A SINE QUA NON FOR INITIATION OR PROCEEDINGS, THE PENALTY PROCEEDINGS 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 GROUN DS. AFTER, HE PLACES HIS VERSION AND 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 UPON TO ANSWER. IT IS NOT OPEN TO THE AUTHORITY, AT THE TIME OF IMPOSING PENALTY TO IM POSE 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 PENALTY WOULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAINED . THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROUND, THE PENALTY SHOULD ALSO BE IMPOSED ON THE SAME GROUND. WHERE THE BASIS OF THE INITIATION OF PENALTY PROCEEDINGS IS NOT IDENTICAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, THE ITA NO S . 1871 TO 1875 /PN/20 1 4 SHRI RAVIRAJ VIKAS TAKAWAN, 7 IMPOSITION OF PE NALTY 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 THE 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 ACT TO INITIATE PENALTY PROCEEDINGS ONCE HE IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS THAT TH ERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF TOTAL INCOME UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICULARS OF INCOME ARE DIFFERENT. THUS THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS TO COME TO THE CONCLUSION THA T WHETHER IS IT A CASE OF CONCEALMENT OF INCOME OR IS IT A CASE OF FURNISHING OF INACCURATE PARTICULARS. THE APEX COURT IN THE CASE OF ASHOK PAI REPORTED IN [2007] 292 ITR 11 (SC) AT PAGE 19 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURATE PAR TICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEERING WORKS REPORTED IN [1980] 122 ITR 306 (GUJ) AND THE DELHI HIGH COURT IN THE CASE OF CIT V. VIRGO MARKETING P. LTD. REPORTED IN [2008] 171 TAXMAN 156, HAS HELD 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 SUSTAINABLE. THEREFORE, WHEN THE ASSESSING 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 PROFORMA WITHOUT STRIKING OF THE RELEVANT CLAUSES WILL LEAD TO AN INFERENCE 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 COURSE OF PROCEEDINGS THAT THERE THE ASSESSING OFFICER IS TO BE SATISFIED IN THE COURSE OF PROCEEDINGS THAT THERE IS EITHER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME UNDER CLAUSE (C) TO SECTION 2 71(1) OF THE ACT. IT HAS BEEN CATEGORICALLY HELD THAT CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME ARE DIFFERENT. THE HONBLE HIGH COURT HAS THUS, LAID DOWN THAT THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS TO COME TO CONCLU SION THAT WHETHER IT IS CASE OF CONCEALMENT OF INCOME OR CASE OF FURNISHING 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 VS. CIT (2007) 292 ITR 11 (SC), WHE REIN AT PAGE 19 IT WAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATION. APPLYING THE SAID PROPOSITION, IT WAS HELD THAT WHERE THE ASSESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEAL MENT, THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. SIMILARLY, FOR FURNISHING INACCURATE PARTICULARS OF INCOME, THE STANDARD PROFORMA WITHOUT STRIKING OF RELEVANT CLAUSES, AS PER THE HONBLE HIGH COURT WOULD LEAD TO INFERENCE AS TO NON - APPLICATION OF MI ND. 16. FURTHER, THE HONBLE KARNATAKA HIGH COURT IN CIT 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 2 74 R.W.S. 271(1)(C) OF THE ACT TO BE BAD IN LAW AS IT DOES NOT SATISFY WHICH LIMB OF SECTION 271(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. MAN JUNATHA COTTON AND GINNING FACTORY (SUPRA). THE HONBLE SUPREME COURT IN CIT VS. SSAS EMERALD MEADOWS (SUPRA) HAS DISMISSED THE SPECIAL LEAVE 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 KARNATAKA HIGH COURT (SUPRA) AND HELD THAT WHERE THERE IS NO STRIKING OFF OF EITHER OF LIMBS, THEN NOTICE ISSUED ITA NO S . 1871 TO 1875 /PN/20 1 4 SHRI RAVIRAJ VIKAS TAKAWAN, 8 UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT WAS INVALID 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 SIMILAR ISSUE, WHEREIN THE ASSESSING OFFICER HAD INITIATED PENALTY PROCEED INGS FOR CONCEALMENT OF PARTICULARS OF INCOME WITHOUT STRIKING INAPPROPRIATE WORDS OR ANY PARTS OF NOTICE AND PROCEEDED TO LEVY PENALTY FOR CONCEALMENT, THEN FOLLOWING THE RATIO LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT, THE TRIBUNAL HELD THAT NOTICE I SSUED FOR INITIATING PENALTY PROCEEDINGS WERE INVALID AND CONSEQUENTLY PENALTY PROCEEDINGS WERE INVALID. 19. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY KOLKATA BENCH OF TRIBUNAL IN SHRI DEEPAK KUMAR PATWARI VS. ACIT IN ITA NOS.616 TO 618/KOL/2013, RELATI NG TO ASSESSMENT YEARS 2007 - 08 TO 2009 - 10, ORDER DATED 03.02.2016 AND IT HAS BEEN FURTHER HELD THAT THE PROVISIONS OF SECTION 292B 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, ASSESSMENT, NOTICE OR THE PROCEEDINGS. THE TRIBUNAL FURTHER HELD THAT SHOW CAUSE NOTICE AND THE REASONS MENTIONED IN THE SHOW CAUSE NOTICE WERE PART OF PROCESS OF NATURAL JUSTICE AND THE DEFECT IN SUCH NOTICE COULD NOT BE OVERLOOKED. SIMILAR PROPOSITION HAS FURTHER BEEN LAID DOWN IN OTHER DECISIONS OF VARIOUS BENCHES OF TRIBUNAL WHICH HAVE BEEN RELIED UPON BY THE ASSESSEE BEFORE US. 20. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED HEAVY RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. SMT. KAUSHALYA (SUPRA). IN THE FACTS OF THE CASE BEFORE THE HONBLE BOMBAY HIGH COURT, THE HONBLE HIGH COURT QUASHED THE PENALTY LEVIED FOR ASSESSMENT YEAR 1967 - 68 AS THE SAME WAS IMPOSED WITHOUT AFFORDIN G REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. IN RESPECT OF OTHER TWO REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. IN RESPECT OF OTHER TWO YEARS WHERE THERE WAS NON - STRIKING OF INACCURATE PORTION, THE HONBLE HIGH COURT HELD THAT THE SAME WOULD NOT INVALIDATE THE NOTICE ISSUED UNDER SECTION 274 OF THE ACT. IT WAS F URTHER HELD THAT THE ASSESSMENT 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 THE 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 RIGHT OF ASSESSEE OF REASONABLE OPPORTUNITY OF BEING HEARD. THE JURISDICTIONAL HIGH COURT DELIBERATED U PON THE PROVISIONS OF SECTION 274 OF THE 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 ITSEL F BE INVALIDATED THE NOTICE. IT WAS HELD THAT THE ENTIRE FACTUAL BACKGROUND WOULD FALL FOR CONSIDERATION IN THE MATTER AND NO ONE ASPECT WOULD BE DECISIVE. 21. IN RESPECT OF ASSESSMENT YEAR 1967 - 68, THE HONBLE HIGH COURT IN CIT VS. SMT. KAUSHALYA (SUP RA) ACKNOWLEDGED THAT THERE COULD EXIST A CASE WHERE VAGUENESS AND AMBIGUITY IN THE NOTICE COULD DEMONSTRATE NON - APPLICATION OF MIND BY THE AUTHORITY AND / OR ULTIMATE PREJUDICE TO THE RIGHT OF OPPORTUNITY OF HEARING CONTEMPLATED UNDER SECTION 274 OF THE A CT. 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 THERE WAS USE OF WORD OR BETWEEN THE G ROUP OF CASES BUT THERE WAS USE OF WORD DELIBERATELY ALSO. THE HONBLE HIGH COURT HELD THAT NOTICE CLEARLY DEMONSTRATED NON - APPLICATION OF MIND ON THE PART OF ASSESSING OFFICER. THE VAGUENESS 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 FACE. IN THIS BACKGROUND, QUASHING OF PENALTY PROCEEDINGS FOR ASSESSMENT YEAR 1967 - 68 WAS HELD TO BE ITA NO S . 1871 TO 1875 /PN/20 1 4 SHRI RAVIRAJ VIKAS TAKAWAN, 9 JUSTIFIED. APPLYING THE SAID PRINCIPLE LAID DOWN BY THE JURISDIC TIONAL HIGH COURT, APPLICATION OF MIND BEFORE ISSUING THE NOTICE UNDER SECTION 274 OF THE ACT HAS TO BE CONSIDERED. THE HONBLE HIGH COURT CLEARLY HELD THAT WHERE THERE IS VAGUENESS AND AMBIGUITY IN THE NOTICE ISSUED WHICH COULD DEMONSTRATE NON - APPLICATIO N OF MIND BY THE AUTHORITY WHICH IN TURN, WOULD ULTIMATELY PREJUDICE THE RIGHT OF OPPORTUNITY OF HEARING OF THE ASSESSEE AS CONTEMPLATED UNDER SECTION 274 OF THE ACT, THEN SUCH NOTICE IS INVALID. 22. NOW, COMING TO THE FACTS OF THE CASE BEFORE US, WHERE IN SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT ON CHHORIYA GROUP OF CONCERNS ON 22.08.2008 AND DECLARATION OF RS.11.44 CRORES WAS MADE IN THE HANDS OF WHOLE GROUP FOR VARIOUS YEARS. CONSEQUENT TO THE NOTICES ISSUED UNDER SECTION 153A OF THE ACT FOR VAR IOUS YEARS, DIFFERENT ENTITIES FILED THE RETURN OF INCOME FOR THE RESPECTIVE YEARS AND CUMULATIVELY FOR RS.13.99 CRORES AS ADDITIONAL INCOME. THE INCOME WAS DECLARED ON ACCOUNT OF ON - MONEY ON SALE OF PLOTS, WHICH WAS DETECTED FROM THE DOCUMENTS SEIZED DUR ING 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 BEFORE US IS THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT PROCEEDINGS HAD TO BE SATISFIED THAT TH E ASSESSEE HAD EITHER CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME AND IS LIABLE TO LEVY OF PENALTY 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. B EFORE ISSUING SUCH NOTICE, SATISFACTION HAS TO COME OUT FROM THE PROCEEDINGS GOING ON BEFORE THE ASSESSING OFFICER. THE PERUSAL OF ASSESSMENT ORDER PASSED IN THE PRESENT CASE REFLECTS THAT THE ASSESSING OFFICER WHILE INITIATING PROCEEDINGS HAS RECORDED SA TISFACTION AS TO THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND HAS ALSO CONCEALED THE INCOME. THE ONLY SOURCE OF ADDITION IN THE HANDS OF ASSESSEE IS ADDITIONAL INCOME OFFERED BY THE ASSESSEE PURSUANT TO SEARCH OPERATIONS. IN SUCH CIRCU MSTANCES, IT IS CATEGORICALLY A CASE OF CONCEALMENT. HOWEVER, IN SUCH CIRCU MSTANCES, IT IS CATEGORICALLY A CASE OF CONCEALMENT. HOWEVER, THE ASSESSING OFFICER REFERS TO BOTH THE LIMBS OF SECTION 271(1)(C) OF THE ACT AND THE SATISFACTION RECORDED IN THIS CASE SUFFERS FROM INFIRMITY. FURTHER, EVEN IN THE NOTICE ISSUED UNDER SECTI ON 274 OF THE ACT, IRRELEVANT PART HAS NOT BEEN STRUCK OFF. WHILE COMPLETING PENALTY PROCEEDINGS ALSO, THE ASSESSING OFFICER MAKES REFERENCE TO BOTH THE LIMBS I.E. CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME AND IN THE FINAL, 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 PROCEEDINGS I.E. RECORDING OF SATISFACTION AND THE ISSUE OF NOTICE, WHICH HAS BEEN CHALLENGED BY THE ASSESSEE TO BE INVALID. APPLYING THE RATIO LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN CIT & ANR. VS. MANJUNATH COTTON AND GINNING FACTORY (SUPRA) AND CIT VS. SSAS EMERALD MEADOWS (SUPRA) AND IN VIEW OF SLP BEING DISMISSED, WE FIND MERIT IN THE PLEA OF ASSESSEE THAT THE SATISFACTION RECORDED IN THE PRESENT CASE TO INITIATE PENALTY PROCEEDINGS BOTH FOR CONCEALMENT OF INCOME AND FURNISHING OF PARTICULARS OF INCOME AGAINST ADDITIONAL INCOME OFFERED BY THE ASSESSEE IS INCORRECT. FURTHER, WHERE THE A SSESSEE 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 STRIKING OF PORTION WHICH IS NOT APPLICABLE, PREJUDICE THE RIGHT OF REASONABLE OPPORTUNITY TO THE ASSESSEE, AS HE WAS NOT MADE AWARE OF EXACT CHARGE HE HAD TO FACE. IT IS A CLEAR - CUT CASE OF CONCEALMENT SINCE THE ASSESSEE HAD OFFERED ADDITIONAL 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 OFFICER 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 TH AT THE ASSESSING OFFICER HAS TO MAKE THE ITA NO S . 1871 TO 1875 /PN/20 1 4 SHRI RAVIRAJ VIKAS TAKAWAN, 10 ASSESSEE FULLY AWARE OF EXACT CHARGE OF THE DEPARTMENT AGAINST HIM. AS POINTED OUT, IN PRESENT CASE, IN THE ASSESSMENT ORDER ITSELF WHILE RECORDING SATISFACTION FOR INITIATING PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT, EXACT CHARGE OF THE DEPARTMENT AGAINST THE ASSESSEE IS NOT CLEAR. THE ASSESSING OFFICER RECORDS THE SATISFACTION FOR INITIATING PENALTY PROCEEDINGS ON BOTH THE COUNTS I.E. CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE HONBLE BOMBAY HIGH COURT HAD ALSO UPHELD THE QUASHING OF 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 AWARE 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 DEPA RTMENT, 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 H ONBLE SUPREME COURT IN T. ASHOK PAI VS. CIT (SUPRA) HAD HELD AS UNDER: - 23. SECTION 271(1)(C) REMAINS A PENAL STATUTE. THE RULE OF STRICT CONSTRUCTION SHALL APPLY THERETO. THE INGREDIENTS FOR IMPOSING PENALTY REMAIN THE SAME. THE PURPOSE OF THE LEGIS LATURE THAT IT IS MEANT TO BE A DETERRENT TO TAX EVASION IS EVIDENCED BY THE INCREASE 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 INACCURATE PARTICULARS CARRY DIFF ERENT CONNOTATIONS. CONCEALMENT REFERS TO A DELIBERATE ACT ON THE PART OF THE ASSESSEE. A MERE OMISSION OR 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 INACC URATE PARTICULARS OF INCOME ARE TWO DIFFERENT CONNOTATIONS, THEN AS PER PROVISIONS OF THE ACT, THE SATISFACTION HAS TO BE RECORDED BY THE ASSESSING OFFICER BEFORE INITIATING PENALTY PROCEEDINGS AS TO UNDER WHICH LIMB THE CASE OF ASSESSEE FALLS. IN THE PRE SENT SET OF FACTS, THE SATISFACTION AS RECORDED BY THE ASSESSING OFFICER WHICH IS EVIDENT FROM THE ASSESSMENT ORDER ITSELF DOES NOT ESTABLISH THE CASE OF REVENUE AGAINST THE ASSESSEE THAT IT IS LIABLE FOR LEVY OF PENALTY FOR CONCEALMENT UNDER WHICH LIMB I. E. FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE NOTICE ISSUED 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 OPPORTUNITY 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 NOTICE BEING ISSUED IN MAKING THE ASSESSEE AWARE OF EXACT CHARGE AGAINST HIM, HENCE THE 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. THE ASSESSING OFFICER HAD ACCEPTED THE SAME AND HAD INITIATED PENALTY PROCEEDINGS 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 ENHANCEMENT NOTICE TO THE ASSESSEE. THEREAFTER, HE HAD GONE THROUGH THE SEIZED DOCUMENTS AND ELABORATELY REFERRED TO THEM AND EVEN REPRODUCED THE SCANNED COPIES OF SUCH D OCUMENTS AND COMES TO CONCLUSION THAT LOANS WERE RECEIVED FROM RATANLAL ITA NO S . 1871 TO 1875 /PN/20 1 4 SHRI RAVIRAJ VIKAS TAKAWAN, 11 BAFNA, BUT STILL UPHOLDS THE PENALTY LEVIED UNDER SECTION 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 CASES WHERE PENALTY PROCEEDINGS HAVE BEEN INITIATED ON A DIFFERENT FOOTING 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 CONCEA LMENT VARIES. IN SUCH CIRCUMSTANCES, THERE IS NO MERIT IN LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND THERE IS NO MERIT AT ALL IN LEVYING THE PENALTY @ 150%. ACCORDINGLY, WE ALLOW THE CLAIM OF ASSESSEE EVEN ON MERITS. THUS, THE GROUNDS OF APP EAL RAISED BY THE ASSESSEE AND ADDITIONAL GROUND OF APPEAL RAISE D BY THE ASSESSEE ARE ALLOWED. 10 . FURTHER, IN BUNCH OF CASES I.E. IN NANDKISHOR TULSIDAS KATORE VS. ACIT IN ITA NOS.2174 TO 2180/PN/2014, RELATING TO ASSESSMENT YEARS 2002 - 03 TO 2008 - 09, ORDER DATED 14.12.2016 , REFERENCE WAS MADE TO THE JUDGMENT OF HONBLE HIGH COURT OF KARNATAKA IN CIT VS. SSAS EMERALD MEADOWS (2016) 73 TAXMANN.COM 241 (KAR) , WHEREIN THE ISSUE NO.1 RAISED BEFORE THE HONBLE HIGH COURT AND ITS REPLY WAS AS UNDER: - (1) WH ETHER, OMISSION IF ASSESSING OFFICER TO EXPLICITLY MENTION THAT PENALTY PROCEEDINGS ARE BEING INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OR THAT FOR CONCEALMENT OF INCOME MAKES THE PENALTY ORDER LIABLE FOR CANCELLATION EVEN WHEN IT HAS BEEN PROVED BEYOND LIABLE FOR CANCELLATION EVEN WHEN IT HAS BEEN PROVED BEYOND REASONABLE DOUBT THAT THE ASSESSEE HAD CONCEALED INCOME IN THE FACTS AND CIRCUMSTANCES OF THE CASE? (2) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN HOLDING THAT THE PENALTY NOTICE UNDER SECTION 2 74 R.W.S. 271(1)(C) IS BAD IN LAW AND INVALID DESPITE THE AMENDMENT OF SECTION 271(1B) WITH RETROSPECTIVE EFFECT AND BY VIRTUE OF THE AMENDMENT, THE ASSESSING OFFICER HAS INITIATED THE PENALTY BY PROPERLY RECORDING THE SATISFACTION FOR THE SAME? 1 1 . THE HONBLE HIGH COURT HAD ALLOWED THE CLAIM OF ASSESSEE WHERE THE ASSESSING OFFICER HAD NOT EXPLICITLY MENTIONED THAT AS TO WHETHER THE PENALTY PROCEEDINGS WERE INITIATED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME, SUFFERS FR OM INFIRMITY EVEN IF IT IS ESTABLISHED THAT THE ASSESSEE HAD CONCEALED THE INCOME IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE APEX COURT HAS DISMISSED THE SLP FILED BY THE DEPARTMENT. 1 2 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HAS STRE SSED THAT IN VIEW OF THE PROVISIONS OF SECTION 271(1)( 1 B) OF THE ACT, WHERE THE ORDER CONTAINS DIRECTIONS FOR INITIATION OF PENALTY PROCEEDINGS, SUCH AN ITA NO S . 1871 TO 1875 /PN/20 1 4 SHRI RAVIRAJ VIKAS TAKAWAN, 12 ORDER OF ASSESSMENT OR RE - ASSESSMENT SHALL BE DEEMED TO CONSTITUTE SATISFACTION OF THE ASSESSING OF FICER FOR INITIATING PENALTY PROCEEDINGS UNDER CLAUSE (C). ADMITTEDLY, THE SATISFACTION HAS TO BE RECORDED IN THE ORDER OF ASSESSMENT OR RE - ASSESSMENT BY THE ASSESSING OFFICER WHILE FINALIZING THE ASSESSMENT ORDER . HOWEVER, THE ASSESSING OFFICER HAS TO AT INITIA L STAGE ITSELF COME TO A FINDING AS TO WHETHER THE ADDITIONS MADE IN THE HANDS OF ASSESSEE JUSTIFY THE LEVY OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF IN COME. WE FIND THAT IN THE PRESENT SET OF FACTS, THE ASSESSING OFFICER IN THE FIRST YEAR I.E. ASSESSMENT YEAR 2005 - 06 HAS ONLY GIVEN A DIRECTION AND HAS NOT EVEN MENTIONED AS TO WHICH LINK OF SECTION 271(1)(C) OF THE ACT IS APPLICABLE IN THE FACTS OF THE C ASE. IN RESPECT OF OTHER ASSESSMENT YEAR S, THE ASSESSING OFFICER HAS RECORDED SATISFACTION FOR INITIATING PENALTY PROCEEDINGS ON ACCOUNT OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. UNDER THE PROVISIONS OF SECTION 271(1)(C ) OF THE ACT, PENALTY FOR CONCEALMENT IS LEVIABLE WHERE THE ASSESSEE HAS FULFILLED EITHER CONDITIONS I.E. CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER WHILE INITIATING PENALTY PROCEEDINGS HAS TO BE SATISFI ED AS TO UNDER WHICH LIMB, THE PENALTY IS LEVIABLE AND CONSEQUENT THERETO, ISSUE NOTICE IN THIS REGARD. HOWEVER, IN THE FACTS OF THE PRESENT CASE AND AS POINTED OUT HEREIN ABOVE, THE ASSESSING OFFICER HAS FAILED TO RECORD SATISFACTION CORRECTLY AND CONSEQU ENTLY, WE HOLD THAT INITIATION OF PENALTY PROCEEDINGS AGAINST THE ASSESSEE ARE NOT VALID FOR NON - RECORDING OF SATISFACTION BY THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT PROCEEDINGS. FURTHER, THE ASSESSING OFFICER HAS FAILED TO STRIKE OFF EITHER OF THE LIMBS OF SECTION 271(1)(C) OF THE ACT , WHICH ARE NOT SATISFIED BY THE ASSESSEE AND CONSEQUENTLY, NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT IS BAD IN LAW AND ORDER LEVYING PENALTY FOR CONCEALMENT THEREAFTER, IS INFRUCTUOUS. ACCORDINGL Y, WE HOLD SO. THE ITA NO S . 1871 TO 1875 /PN/20 1 4 SHRI RAVIRAJ VIKAS TAKAWAN, 13 STATUTE HAS PROVIDED DISTINCTION BETWEEN CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME, WHICH MAY BE THIN LINE OF DISTINCTION, BUT THE SAME HAS TO BE KEPT IN MIND WHILE RECORDING SATISFACTION BY THE ASSESSING OFFICER. FOLLOWING THE SAME PARITY OF REASONING AS LAID DOWN BY THE HONBLE HIGH COURT OF KARNATAKA IN CIT & ANR. VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565 (KAR) , CIT VS. SSAS EMERALD MEADOWS (SUPRA) AND THE PUNE BENCH OF TRIBUNAL IN KANHAIYALAL D. JAIN VS. ACIT (SUPRA), WE SET ASIDE THE ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT LEVYING PENALTY FOR CONCEALMENT IN THE RESPECTIVE YEARS. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOW ED. 1 3 . IN THE RESULT, ALL THE APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON THIS 28 TH DAY OF DECEMBER, 2016. SD/ - S D/ - (R.K. PANDA ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 28 TH DECE MBER , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - CENTRAL , PUNE ; 4. / THE CIT (CENTRAL) , PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE