Smt. Rehanabanu A. Shaikh, Vapi V. The Income Tax Officer, Ward-3, Vapi

ITA 1979/AHD/2015

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2117 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 03-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K CHANDANI
• Assessee Lawyers: SURESH K KABRA
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Question of law
• Section: 271(1)(c)

Judgement Text

SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 1 OF 13 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT . . , . . , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A NO. 1978&1979/AHD/2015 / A.Y.:2006-7 & A.Y. 2007-08 SMT. REHANABANU A. SHAIKH RBL-14/166 CHANOD COLONY VAPI PAN:AUBPS3926Q V S . INCOME TAX OFFICER WARD-3, VAPI APPELLANT /RESPONDENT /ASSESSEE BY SHRI SURESH K. KABRA, CA /REVENUE BY SHRI J. K. CHANDANI, JCIT SR. D.R. / DATE OF HEARING: 26.04.2018 /PRONOUNCEMENT ON 26.04.2018 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE TWO SEPARATE ORDERS OF LEARNED OF COMMISSIONER OF INCOME TAX (APPEALS)-VALSAD (IN SHORT THE CIT (A)) DATED 01.05.2015 PERTAINING TO ASSESSMENT YEAR 2006-07 & 2007-08, WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ITO WARD-3 VAPI (IN SHORT THE AO) DATED 13.09.2013 UNDER SECTION 271(1)(C) OF INCOME TAX ACT,1961 (IN SHORT THE ACT). SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 2 OF 13 2. GROUND NO. 1 STATES THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN LEVYING PENALTY OF RS.37,200 U/S. 271(1)(C) LEVIED BY THE ASSESSING OFFICER. 3. ADDITIONAL GROUND: DURING THE CURRENCY OF APPEAL THE ASSESSEE HAS TAKEN AN ADDITIONAL GROUND WHICH STATES THAT THE LEARNED ASSESSING OFFICER HAS ERRED AND WAS NOT JUST AND PROPER ON THE FACTS OF THE CASE AND IN LAW BY INITIATING THE PENALTY ON CONCEALMENT OF INCOME IN THE ASSESSMENT ORDER AND IMPOSING PENALTY ON FURNISHING OF INACCURATE PARTICULARS IN THE PENALTY ORDER THE LD. ASSESSING OFFICER HAS ERRED AND WAS NOT JUST AND PROPER ON THE FACTS OF CASE AND IN LAW BY NOT SCORING OUT THE SPECIFIC LIMB ON WHICH THE PENALTY IS INITIATED IN THE NOTICE ISSUED U/S. 274 READ WITH SECTION 271(1)(C) OF THE ACT. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEGAL GROUND OF NOT RECORDING OF SPECIFIC CHARGE IN NOTICE UNDER SECTION 271(1)(C) BE ADMITTED AS ITS OMISSION IN THE MAIN GROUND IS PURELY UNINTENTIONAL. THE SAID ADDITIONAL GROUND OF APPEAL BE ADMITTED AS IT IS BEING PURELY A LEGAL ISSUE, GOES TO THE ROOT OF THE MATTER AND NO FURTHER INQUIRY IS REQUIRED FOR DECIDING THE SAME AS ALL FACTS ARE ALREADY ON RECORD AND ISSUE ARISE OUT OF IMPUGNED ORDER. THE LD. A.R. ALSO PLACED RELIANCE ON FOLLOWING DECISIONS: SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 3 OF 13 NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 ITR 383 (SC), AND JUTE CORPORATION OF INDIA V. CIT 187 ITR 688. 5. ON THE OTHER HAND, THE LD. SR. D.R. OPPOSED THE ADMISSION OF ADDITIONAL GROUND. 6. WE HAVE CONSIDERED THE FACTS AND MATERIAL ON RECORD. THE ADDITIONAL GROUND BEING LEGAL ONE, HENCE, ADMITTED. RELIANCE IS PLACED ON THE DECISION OF APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 ITR 383(SC) WHEREIN IT WAS HELD THAT THE ADDITIONAL GROUND OF APPEAL CAN BE ADMITTED WHERE THE ISSUE INVOLVED IS PURE QUESTION OF LAW NOT INVOLVING ANY INVESTIGATION OF FACTS. 7. ADDITIONAL GROUND: NOW WE WILL DEAL WITH THE ADDITIONAL GROUND. 8. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 16.11.2006 DECLARING TOTAL INCOME OF RS. 7,57,240, WHICH WAS ASSESSED ON 11.03.2013 UNDER SECTION 143 (3) AT RS.8,78,750 BY MAKING ADDITION OF RS.1,26,506 ON ACCOUNT OF UNEXPLAINED CASH CREDIT ON WHICH PENALTY UNDER SECTION 271(1)(C) WAS ALSO INITIATED FOR CONCEALMENT OF INCOME. A SHOW-CAUSE NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(C) WAS ISSUED ON 03.11.2013 FOR CONCEALMENT OF INCOME. THE ASSESSEE HAS FILED SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 4 OF 13 REPLY BUT SAME WAS NOT FOUND ACCEPTABLE AND THEREFORE, PENALTY OF RS. 37,200 WAS LEVIED FOR FURNISHING INACCURATE PARTICULARS. 9. BEING, AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A). HOWEVER, LD. CIT (A) OBSERVED THAT THE APPELLANT HAS MAINTAINED TWO BANK ACCOUNT WITH BANK OF BARODA AND STATE BANK OF INDIA AT UTTARSANDA WHERE HER IN LAWS WERE STAYING. THERE TRANSACTION IN THESE BANK ACCOUNT WAS NOT DISCLOSED ON WHICH ADDITION WAS MADE ON WHICH ALSO NO APPEAL PREFERRED. THEREFORE, MEANS REA IS INVALID HENCE, CONFIRMED THE PENALTY LEVIED BY THE AO. 10. BEING AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITIONAL GROUND OF APPEAL TAKEN UNDER RULE 11 OF INCOME TAX APPELLATE TRIBUNAL RULES 1963 IS AGAINST THE IMPOSING PENALTY BY ISSUING VAGUE AND CRYPTIC SHOW-CAUSE NOTICE FOR IMPOSITION OF PENALTY WITHOUT MAKING THE ASSESSEE AWARE OF SPECIFIC CHARGE, HENCE, PENALTY DESERVE TO BE CANCELLED. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED IN THE ASSESSMENT ORDER PANEL PROCEEDING WERE INITIATED WITHOUT ANY SATISFACTION AS TO CHARGE OF CONCEALMENT OF INCOME . SUCH PROCEEDINGS WERE NOT INITIATED EITHER FOR FURNISHED INACCURATE PARTICULARS OF INCOME OR FOR SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 5 OF 13 CONCEALMENT OF INCOME . THE LD. COUNSEL FOR THE ASSESSEE TOOK US THE COPY OF SHOW-CAUSE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271 DTD. 03.11.2013, WHICH ARE VAGUE AND CRYPTIC NOTICE INASMUCH AS IN THE SAID NOTICE, NON APPLICABLE CLAUSE WAS NOT STRUCK OFF BY THE AO. THE PENALTY NOTICES UNDER SECTION 274 READ WITH SECTION 271(1) (C) WERE ISSUED IN THE TYPED FORMAT WITHOUT THE STRIKING OFF EITHER OF THE TWO CHARGES I.E. WHICH IS REPRODUCED AS UNDER: * HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR ...OR FURNISHED INACCURATE PARTICULARS OF INCOME . THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT SHOW- CAUSE NOTICE UNDER SECTION 274 IS NOT MERE EMPTY FORMALITY BUT IT HAS A DEFINITE PURPOSE TO MAKE THE ASSESSEE AWARE OF THE EXACT CHARGES AGAINST HIM AND THE CASE, WHICH IS REQUIRED TO MEET OUT. A CLEAR NOTICE NOT ONLY A STATUTORY REQUIREMENT BUT EVEN FOR THE PURPOSE OF PRINCIPLE OF AUDI ALTERAM PARTEM WHICH REQUIRES THAT NO ONE SHOULD BE CONDEMNED UNHEARD, A NOTICE IN CLEAR TERM SPECIFYING THE CLEAR CHARGES AGAINST AN ASSESSEE IS REQUIRED TO BE GIVEN BY AN ASSESSING OFFICER BEFORE IMPOSING A PENALTY. IT WAS SUBMITTED THAT BY NOT STRIKING OFF THE INAPPLICABLE CLAUSE, THE LD. AO HAS LEFT THE MATTER OPEN FOR A COMPLETE GUESS WORK ON THE PART OF THE APPELLANT FOR PRESUMING CHARGES LEVELED AGAINST HIM SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 6 OF 13 AND IN SUCH SITUATION, IT CANNOT BE SAID THAT AN EFFECTIVE OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE APPELLANT AS CONTEMPLATED UNDER SECTION 274 OF THE ACT. THUS, THE PENALTY PROCEEDINGS WERE INITIATED WITHOUT SPECIFYING ANY PARTICULARS OR SPECIFIC CHARGE AGAINST THE ASSESSEE IN EITHER THE ASSESSMENT ORDER OR EVEN THE PENALTY NOTICE. IT IS IMPORTANT TO POINT OUT THAT NO CHARGE EITHER OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS WAS MADE IN THE ASSESSMENT ORDERS IN ALL THESE CASES. ON THIS PROPOSITION THE LD. COUNSEL FOR THE ASSESSEE RELIED IN THE CASE OF CIT V. MANJUNATHA COTTON GINNING FACTORY [2013] 359 ITR 565 (KAR)/263 CTR 153/ 93 DTR 111 (KARN) [2012] 82 CCH 282 KAR HC, AND DECISION OF COORDINATED BENCH OF MUMBAI TRIBUNAL IN THE CASE OF UTTAM VALUE STEELS LIMITED V. ACIT CC-41 MUMBAI IN I.T.A. NO. 3622/MUM/2016 DATED 22.05.2017 ( COPY FILED) RELYING ON THE JUDGEMENT IN THE CASE OF CIT V. SSA`S EMERALD MEADOWS [2016] 8 TMI 1145(SC) IN SUPPORT OF HIS CLAIM AND OTHER VARIOUS CASE LAWS AS REFERRED TO THEREIN PENALTY US 271(1)(C) WAS FOR NOT ,GIVEN FOR SPECIFIC CHARGES IN PENALTY SHOW- CAUSE NOTICE ISSUED US 274 READ WITH SECTION 27111C OF THE ACT. IT WAS SUBMITTED IN THE CASE OF CIT V. MANJUNATHA COTTON GINNING FACTORY [2013] 359 ITR 565 (KAR)/263 CTR 153/ 93 DTR 111(KARN) SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 7 OF 13 IT WAS OBSERVED IN PARA 59 THAT THE PRACTICE OF THE DEPARTMENT SENDING A PRINTED FORM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY THE REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NOT REBUTTING THE INITIATED PRESUMPTION IS SERIOUS IN NATURE 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, NOTICES ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS, WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLE OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NOTICE IS VAGUE. BASED ON SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASSESSEE. 11. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT PENALTY WAS INITIATED ON ACCOUNT OF CONCEALMENT OF INCOME AS MENTIONED IN ASSESSMENT ORDER BUT IT WAS LEVIED FOR FURNISHED INACCURATE PARTICULARS OF INCOME. THE LEARNED COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF HON`BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY [2017] 392 ITR 4 (BOMBAY) /[2017] 88 TAXMANN.COM 413 (BOMBAY) WHEREIN IT WAS HELD THAT WHERE THE AO HAS INITIATED PENALTY PROCEEDINGS FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND IMPOSING PENALTY FOR CONCEALMENT OF INCOME- ORDER IMPOSING PENALTY TO BE SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 8 OF 13 MADE ONLY ON GROUND ON WHICH PENALTY PROCEEDINGS INITIATED AND NOT ON FRESH GROUND OF WHICH ASSESSEE HAD NO NOTICE- PENALTY TO BE DELETED 12. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF S. CHANDRASHEKAR V. ACIT [2017] 88 TAXMANN.COM 459 (KARNATAKA) ; 396 ITR 538 (KARNATAKA) AND VASANTLAL PRANSHANKR RAWAL V. ITO I.T.A. NO. 1139/AHD/2016 A.Y. 11-12 DTD. 26.10.2017 OF SURAT TRIBUNAL IN SUPPORT OF HIS CLAIM. THEREFORE, IT WAS SUBMITTED THAT THE LD. CIT (A) GROSSLY ERRED IN CONFIRMING THE PENALTY LEVIED UNDER SECTION 271(1) (C) IN THESE CASES, WHICH MAY KINDLY BE DELETED. 13. ON THE OTHER HAND, THE LD. CIT (DR) SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. IT WAS SUBMITTED THAT THE AO HAS DULY RECORDED THE SATISFACTION IN RESPECT OF EACH ITEMS OF CONCEALMENT OF INCOME IN HIS ASSESSMENT ORDER HENCE, NOT MENTIONING OR NON STRIKING OUT OF RELEVANT COLUMN IN SHOW-CAUSE NOTICE DOES NOT REQUIRED TO BE IN A PARTICULAR MANNER OR REDUCE IN WRITING. THEREFORE, IT WAS URGED UPON US TO UPHOLD THE ORDER OF LD. CIT (A). 14. WE HAVE CONSIDERED THE FACTS, PERUSED THE MATERIAL ON RECORD, AND GONE THROUGH THE ASSESSMENT ORDER AND PENALTY ORDER SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 9 OF 13 AND CASE LAWS RELIED BY THE PARTIES. A PERUSAL OF THE PENALTY ORDER REVEALS THAT THE AO HAS REJECTED THE CONTENTIONS OF THE ASSESSEE ON THE BASIS THAT THE TRANSACTION IN TWO BANK ACCOUNT WERE NOT DISCLOSED. THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THESE ADDITIONS. WE FIND THAT THE PENALTY NOTICES UNDER SECTION 274 READ WITH SECTION 271(1)(C) WERE ISSUED IN THE TYPED FORMAT WITHOUT THE STRIKING OFF EITHER OF THE TWO CHARGES I.E. * HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR ..OR FURNISHED INACCURATE PARTICULARS OF INCOME . THUS, THE PENALTY PROCEEDINGS WERE INITIATED WITHOUT SPECIFYING ANY PARTICULAR OR SPECIFIC CHARGE AGAINST THE ASSESSEE IN EITHER THE ASSESSMENT ORDER OR EVEN THE PENALTY NOTICE. IT IS IMPORTANT TO POINT OUT THAT NO CHARGE EITHER OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS WAS MADE IN THE ASSESSMENT ORDERS IN ALL THESE CASES. THUS, WE FIND THAT THE CHARGE AGAINST WHICH THE PENALTY IS TO BE LEVIED WAS NOT SPECIFIC. IT IS NOW A SETTLED PROPOSITION THAT WHEN THE CHARGE ITSELF IS NOT A SPECIFIC AND IS VAGUE, PENALTY CANNOT BE LEVIED. RELIANCE IN THE CASE OF CIT V. MANJUNATHA COTTON GINNING FACTORY [2013] 359 ITR 565 (KAR)/263 CTR 153/ 93 DTR 111(KARN)[2012] 82 CCH 282 KAR HC, WHEREIN, IT WAS OBSERVED IN PARA 59 AS UNDER: THE PRACTICE SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 10 OF 13 OF THE DEPARTMENT SENDING A PRINTED FORM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY THE REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NOT REBUTTING THE INITIATED PRESUMPTION IS SERIOUS IN NATURE 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, NOTICES ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS, WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLE OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASSESSEE. 15. THE ABOVE DECISION WAS FURTHER FOLLOWED BY THE HON`BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. SSA`S EMERALD MEADOWS [I.T.A. NO. 380/2015 DATED 23 RD NOVEMBER 2015] WHEREIN THE HON`BLE HIGH COURT HAS DISMISSED THE APPEAL OF THE REVENUE BY OBSERVING THAT THE TRIBUNAL HAD ALLOWED THE APPEAL OF THE ASSESSEE HOLDING THAT THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF INCOME TAX ACT,1961 WAS BAD-IN-LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. THE TRIBUNAL , WHILE SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 11 OF 13 ALLOWING THE APPEAL OF THE ASSESSEE, HAD RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF CIT V. MANJUNATHA COTTON GINNING FACTORY [2013] 359 ITR 565. IT WAS FURTHER POINTED OUT THAT SLP FILED BY THE DEPARTMENT AGAINST THIS DECISION WAS DISMISSED BY HON`BLE SUPREME COURT ON 05-08-2016 REPORTED AS CIT V. SSA`S EMERALD MEADOWS [2016] 73 TAXMANN.COM 248 (SC). THE LEARNED COUNSEL ALSO SUBMITTED THAT EVEN IN THE MATTER OF SEARCH CASE WHERE PENALTY IS LEVIED UNDER EXPLANATION 5A TO SECTION 271(1)(C), FOLLOWING DECISION OF CIT V. MANJUNATHA COTTON GINNING FACTORY [2013] 359 ITR 565 (KARNATAKA), IT HAS BEEN HELD THAT THE SHOW CAUSE NOTICE UNDER SECTION 274 WAS DEFECTIVE AS IT DOES NOT SPELL OUT THE GROUNDS ON WHICH THE PENALTY IS SOUGHT TO BE IMPOSED AND CONSEQUENTLY, PENALTY IMPOSED WAS CANCELLED. 16. WE FURTHER FIND THAT THE NOTICE ISSUED U/S. 274 BY THE AO IS UNTENABLE AS IT SUFFERS FROM THE VICE OF NON-APPLICATION OF MIND. IN THIS CASE THOUGH THE AO RECORDED IN THE ASSESSMENT ORDER THAT PENALTY PROCEEDING UNDER SECTION 271(1)(C) ARE TO BE INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME, HOWEVER, IN THE NOTICE U/S. 274 BOTH THE LIMBS OF SECTION 271(1)(C) WERE REPRODUCED IN THE PREFORMA NOTICE AND THE SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 12 OF 13 RELEVANT CLAUSES WERE NOT STRUCK OFF. WHEREAS IN THE CASE OF THE ASSESSEE NO SPECIFIC CHARGES WERE LEVIED IN THE ASSESSMENT ORDER AS WELL AS PENALTY SHOW CAUSE NOTICE. 17. WE ALSO NOTICE THAT PENALTY PROCEEDING WERE INITIATED FROM CONCEALMENT OF INCOME BUT LEVIED ON FURNISHING OF INACCURATE PARTICULARS OF INCOME, WHICH IS ALSO NOT TENABLE IN LAW IN THE LIGHT OF DECISION OF HON`BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. SAMSON PERINCHERY [2017] 392 ITR 4(BOM) HELD THAT WHERE THE AO HAS INITIATED PENALTY PROCEEDINGS FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND IMPOSING PENALTY FOR CONCEALMENT OF INCOME- ORDER IMPOSING PENALTY TO BE MADE ONLY ON GROUND ON WHICH PENALTY PROCEEDINGS INITIATED AND NOT ON FRESH GROUND OF WHICH ASSESSEE HAD NO NOTICE- PENALTY TO BE DELETED 18. CONSIDERING ABOVE FACTS AND CIRCUMSTANCES AND RELYING JUDICIAL PRECEDENTS AS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT PENALTY LEVIED UNDER SECTION 271(1)(C) IS NOT SUSTAINABLE IN LAW, AS NO SPECIFIC CHARGE WAS LEVIED IN PENALTY SHOW CAUSE NOTICES, HENCE, IT IS CANCELLED. ACCORDINGLY, THE APPEAL OF ASSESSEE IS ALLOWED. SMT. REHANANBANU A. SHAIKH V. ITO, WARD-3 VAPI /I.T.A. NO.1978&197 /AHD/2015/A.Y.06-07 &:07-08 PAGE 13 OF 13 19. FURTHER THE REGULAR GROUNDS OF APPEAL REGARDING PENALTY IS NOT LEVIABLE IS NOT REQUIRED TO BE ADJUDICATED AS APPEAL OF THE ASSESSEE IS ALLOWED ON LEGAL GROUND. I.T.A. NO. 1979/AHD/2015 A.Y. 2007-08. 20. FOR THE ASSESSMENT YEAR 2007-08, ALSO THE ASSESSEE HAS TAKEN AS ADDITIONAL GROUND ON LEGAL ASPECT AND FACTS OF THIS A.Y. IDENTICAL, HENCE, FOLLOWING THE REASONING FOR A.Y. 2006-07 IN THE CASE OF THE ASSESSEE PENALTY OF 5,85,840 LEVIED FOR A.Y. 2007-08 IS ALSO DELETED AND REGULAR GROUND AND APPEAL IS ALLOWED FOR I.T.A. NO. 1979/AHD/2015. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. 22. THE ORDER PRONOUNCED IN THE OPEN COURT ON 26.04.2018 SD/ - ( . . ) SD/ - ( . . ) ( C.M. GARG) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER / SURAT: / DATED : 26 TH APRIL, 2018/OPM COPY SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT