SUNIL T. DOSHI, MUMBAI V. DCIT CIR 24(2), MUMBAI

ITA 238/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0071 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 24-02-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 07-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR A K NAYAK
• Assessee Lawyers: F V IRANI
• Keywords: Unexplained expenditure; Principle of natural justice
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH E, MU MBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 238/MUM/2013 (ASSESSMENT YEAR- 2001-02) SHRI SUNIL T. DOSHI M/S. NATVARLAL VEPARI & CO., ORICON HOSUE, 4 TH FLOOR, 12, K. DUBASH MARG, MUMBAI-400023 PAN: ABXPD4329F VS. THE DCIT, CIRCLE-24(2), INCOME TAX DEPARTMENT, C/13, 6 TH FLOOR, PRATYAKSHA KAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI F. V. IRANI (AR) REVENUE BY : DR. A.K. NAYAK (DR) DATE OF HEARING : 21.06.2017 DATE OF PRONOUNCEMENT : 21.06.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE U/S. 253 OF THE INCOME-TAX ACT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-34 [THE CIT(A)], MUMBAI DATED 30.10.2012 FOR THE ASSESSMENT YEAR 2001-02. THOUGH THE ASSESSEE HAS RAISED AS MANY AS SIX GROUN DS OF APPEAL, HOWEVER, AS PER OUR CONSIDERED VIEW, THE ONLY SUBSTANTIAL GR OUND OF APPEAL IS WHETHER THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY OF R S. 9,82,799/- LEVIED U/S. 271(1)(C) OF THE ACT. RESTS OF THE GROUNDS OF APPE AL ARE ARGUMENTATIVE IN NATURE. ITA NO.238/M/2013- SHRI SUNIL T. DOSHI 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF EVENT PROMOTION AND IS PROPRIETOR OF TWO CONCERNS V IZ., M/S LIMELIGHT AND M/S. ALLIANCE MEDIA & ENTERTAINMENT. THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS COMPLETED ON 15.03.2014 U/S 143(3 ) OF THE ACT ASSESSING THE TOTAL INCOME AT RS. 92,28,192/- AGAINST THE RET URN INCOME OF RS. 57,78,192/-. THE ASSESSING OFFICER (AO) WHILE FRAMI NG THE ASSESSMENT DISALLOWED THE LIABILITY SHOWN AGAINST THE NAME OF SH. ABHISHEK BACHCHAN, MS. RANI MUKHERJEE AND SHRI AMITABH BACHCHAN OF RS. 17,50,000/-, RS. 6,00,000/- AND RS. 5,00,000/- RESPECTIVELY U/S . 69C AS UNEXPLAINED EXPENDITURE. ON APPEAL BEFORE THE LD. CIT(A), THE A SSESSEE WAS GRANTED PARTIAL RELIEF AGAINST THE LIABILITY OF MS. RANI MU KHERJEE AND SHRI AMITABH BACHCHAN FOR AN AMOUNT OF RS. 6,00,000/- AND RS. 50 ,000/- RESPECTIVELY. REST OF THE ADDITION WAS CONFIRMED. FURTHER, APPEAL S BEFORE THE TRIBUNAL WAS DISMISSED VIDE ITA NO. 1938/MUM/2007 DATED 01.01.20 10. THE AO ISSUED NOTICE U/S 274 R.W.S. 271 ON 15.03.2004. THE ASSESS EE CONTESTED THE NOTICE AND FILED HIS REPLY. THE REPLY OF ASSESSEE WAS NOT ACCEPTED BY AO AND LEVIED THE PENALTY @ 100% ON THE TAX SOUGHT TO BE EVADED. THE AO WORKED OUT THE PENALTY AT RS. 9,82,799/-. ON APPEAL BEFORE THE LD. CIT(A) THE PENALTY WAS SUSTAINED. THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE PRESENT APPEAL IS FILED BEFORE US. ITA NO.238/M/2013- SHRI SUNIL T. DOSHI 3 3. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE (AR ) OF THE ASSESSEE AND LD. DEPARTMENT REPRESENTATIVE (DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR OF THE ASS ESSEE ARGUED THAT WHILE ISSUING NOTICE U/S 274 R.W.S. 271 OF THE ACT. THE A O HAS NOT STRIKE OUT THE IRRELEVANT PORTION OF THE NOTICE. THE LD. AR OF THE ASSESSEE PLACED ON RECORD THE COPY OF NOTICE DATED 15.03.2004. THE ORIGINAL O F THE NOTICE WAS ALSO SHOWN TO US DURING THE COURSE OF HEARING. IT WAS AR GUED THAT THE QUANTUM ASSESSMENT PROCEEDING HAS BECOME FINAL AFTER THE DI SMISSAL OF APPEAL OF THE ASSESSEE BY THE TRIBUNAL. AS THE ASSESSEE HAS NOT G ONE ANY FURTHER APPEAL BEFORE THE HIGH COURT. IT WAS FURTHER ARGUED THAT THE PENALTY NOTICE U/S 274 R.W.S. 271 OF THE ACT, COPY OF WHICH IS PLACED ON R ECORD REVEALS NONE- APPLICATION OF MIND BY THE AO AS MUCH AS THE IRRELE VANT PORTION OF THE NOTICE HAS NOT BEEN STUCK OFF. THE LD. AR OF THE ASSESSEE, THEREFORE, CONTENDED THAT THE LEVY OF PENALTY IS ILLEGAL AND DESERVE TO BE SE T-ASIDE/DELETED. IN SUPPORT OF HIS SUBMISSION, THE LD. AR OF THE ASSESSEE RELIE D UPON THE FOLLOWING DECISIONS: SR NO. PARTICULARS 1 CIT VS. M/S SSA'S EMERALD MEADOWS. [ITA 380/2015 (H IGH COURT KARNATAKA - BANGALURU & SUPREME COURT OF INDI A)] 2 CIT VS. MANJUNATHA COTTON AND GINNING FACTORY, MA NJUNATHA GINNING AND PRESSING, VEERABHADRAPPA SANGAPPA AND CO., V.S. LAD AND SONS AND G. M. EXPORTS [359 ITR 565 (KARNAT AKA)] 3 DILIP N. SHROFF VS. JCIT. [161 TAXMAN 218 (SC)] 4 CIT VS. RELIANCE PETROPRODUCTS (P) LTD. [189 TAXM AN 322 (SC)] ITA NO.238/M/2013- SHRI SUNIL T. DOSHI 4 5 DR. SARITA MILIND DAVARE VS. ACIT [ITA 2187/MUM-2 014] 6 SHRI SAMSON PERINCHERY VS. ACIT [ITA 4625 TO 4630 /MUM- 2013] 7 CIT VS. SHRI SAMSON PERINCHERY [ITA 1154,953,1097 AND 1226/MUM-2014] 8 SHRI HAFEEZ S CONTRACTOR VS. ACIT [ITA 6222 AND 6 223/MUM- 2013 9 M/S. PARINEE DEVELOPERS PVT LTD. VS. ACIT [ITA 67 72/MUM- 2013] 10 SANGHAVI SAVLA COMMODITY BROKERS PVT LTD. VS. AC IT [ITA 17 46/MUM-2011] 11 SUVAPRASSANA BHATACHARYA VS ACIT [ITA 1303/KOLKA TA- 2010] 12 H. LAKSHMINARAYANA VS. INCOME TAX OFFICER [61 TA XMAN 373 (BANGALORE.)] 13 IDEAL UNEMPLOYED ENGINEERS CO-OPERATIVE SOCIETY LTD. VS. DEPUTY CIT [ITA NO.2460/KOLKATA-2013] 14 MEHERJEE CASSINATH HOLDINGS PRIVATE LIMITE LIMIT ED VS. ACIT [ITA 2555/MUM/2012] 15 GUPTA GEMHOUSE PVT. LTD. VS. INCOME TAX OFFICER (1)(4), MUMBAI [ITA 7370/MUM/2014 AND 7371/MUM/2014] 16 JEHANGIR HC JEHANGIR VS. ACIT [ITA 1261/MUM/2011 ] 17 DCIT VS. M/S. ITTINA PROPERTIES PVT. LTD.[ITA 36 /BANG/2014] 18 M/S. DHARNI DEVELOPERS VS. ACIT [ITA 1848 TO 185 1/MUM/2012] 4. IT WAS FURTHER ARGUED THAT HE SPECIFICALLY RELYING ON A RECENT DECISION OF THIS BENCH IN MEHERJEE CASSINATH HOLDING PVT. LTD. VS. A CIT. ON THE OTHER HAND, LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF AUTHO RITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDER OF AUTHORITIES BELOW. THIS BENCH WHILE CONSIDERING WITH ALMOST SIMILAR CONTENTION IN CASE OF MEHERJEE CASSI NATH HOLDING PVT. LTD.(SUPRA) HELD AS UNDER: 8 . WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION S. SEC. 271(1)(C) OF THE ACT EMPOWERS THE ASSESSING OFFICER TO IMPOSE PENALTY TO THE EXTENT SPECIFIED IF, IN THE ITA NO.238/M/2013- SHRI SUNIL T. DOSHI 5 COURSE OF ANY PROCEEDINGS UNDER THE ACT, HE IS SATI SFIED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF SUCH INCOME. IN OTHER WORDS, WHAT SEC. 271(1)(C) OF THE ACT POSTULATES IS THAT THE PENALTY CAN BE LEVIED ON THE EXISTENCE OF ANY OF THE TWO SI TUATIONS, NAMELY, FOR CONCEALING THE PARTICULARS OF INCOME OR FOR FURNISHING INACCUR ATE PARTICULARS OF INCOME. THEREFORE, IT IS OBVIOUS FROM THE PHRASEOLOGY OF SE C. 271(1)(C) OF THE ACT THAT THE IMPOSITION OF PENALTY IS INVITED ONLY WHEN THE COND ITIONS PRESCRIBED U/S 271(1)(C) OF THE ACT EXIST. IT IS ALSO A WELL ACCEPTED PROPOSITI ON THAT 'CONCEALMENT OF THE PARTICULARS OF INCOME' AND 'FURNISHING OF INACCURAT E PARTICULARS OF INCOME' REFERRED TO IN SEC. 271(1)(C) OF THE ACT DENOTE DIFFERENT CONNO TATIONS. IN FACT, THIS DISTINCTION HAS BEEN APPRECIATED EVEN AT THE LEVEL OF HON'BLE SUPRE ME COURT NOT ONLY IN THE CASE OF DILIP N. SHROFF (SUPRA) BUT ALSO IN THE CASE OF T. ASHOK PAI, 292 ITR 11 (SC). THEREFORE, IF THE TWO EXPRESSIONS, NAMELY 'CONCEALM ENT OF THE PARTICULARS OF INCOME' AND 'FURNISHING OF INACCURATE PARTICULARS OF INCOME ' HAVE DIFFERENT CONNOTATIONS, IT IS IMPERATIVE FOR THE ASSESSEE TO BE MADE AWARE AS TO WHICH OF THE TWO IS BEING PUT AGAINST HIM FOR THE PURPOSE OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, SO THAT THE ASSESSEE CAN DEFEND ACCORDINGLY. IT IS IN THIS BACK GROUND THAT ONE HAS TO APPRECIATE THE PRELIMINARY PLEA OF ASSESSEE, WHICH IS BASED ON THE MANNER IN WHICH THE NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 10.12.201 0 HAS BEEN ISSUED TO THE ASSESSEE- COMPANY. A COPY OF THE SAID NOTICE HAS BEEN PLACED ON RECORD AND THE LEARNED REPRESENTATIVE CANVASSED THAT THE SAME HAS BEEN ISS UED BY THE ASSESSING OFFICER IN A STANDARD PROFORMA, WITHOUT STRIKING OUT THE IRRELEV ANT CLAUSE. IN OTHER WORDS, THE NOTICE REFERS TO BOTH THE LIMBS OF SEC. 271(1)(C) O F THE ACT, NAMELY CONCEALMENT OF THE PARTICULARS OF INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. QUITE CLEARLY, NON-STRIKING-OFF OF THE IRRELEVANT L IMB IN THE SAID NOTICE DOES NOT CONVEY TO THE ASSESSEE AS TO WHICH OF THE TWO CHARG ES IT HAS TO RESPOND. THE AFORESAID INFIRMITY IN THE NOTICE HAS BEEN SOUGHT TO BE DEMON STRATED AS A REFLECTION OF NON- APPLICATION OF MIND BY THE ASSESSING OFFICER, AND I N SUPPORT, REFERENCE HAS BEEN MADE TO THE FOLLOWING SPECIFIC DISCUSSION IN THE OR DER OF HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA):- '83. IT IS OF SOME SIGNIFICANCE THAT IN THE STANDAR D PROFORMA USED BY THE ASSESSING OFFICER IN ISSUING A NOTICE DESPITE THE F ACT THAT THE SAME POSTULATES THAT INAPPROPRIATE WORDS AND PARAGRAPHS WERE TO BE DELETED, BUT THE SAME HAD NOT BEEN DONE. THUS, THE ASSESSING OFFICER HIMSELF WAS NOT SURE AS TO WHETHER HE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD CO NCEALED HIS INCOME OR HE HAD FURNISHED INACCURATE PARTICULARS. EVEN BEFORE U S, THE LEARNED ADDITIONAL SOLICITOR GENERAL WHILE PLACING THE ORDER OF ASSESS MENT LAID EMPHASIS THAT HE HAD DEALT WITH BOTH THE SITUATIONS. 84. THE IMPUGNED ORDER, THEREFORE, SUFFERS FROM NON -APPLICATION OF MIND. IT WAS ALSO BOUND TO COMPLY WITH THE PRINCIPLES OF NATURAL JUSTICE. ( SEE MALABAR INDUSTRIAL CO. LTD. V. CIT [2000] 2 SCC 718]' ITA NO.238/M/2013- SHRI SUNIL T. DOSHI 6 9. FACTUALLY SPEAKING, THE AFORESAID PLEA OF ASSESS EE IS BORNE OUT OF RECORD AND HAVING REGARD TO THE PARITY OF REASONING LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA), THE NOTICE IN THE INSTANT CASE DOES SUFFER FROM THE VICE OF NON-APPLICATION OF MIND BY THE ASSESSING OF FICER. IN FACT, A SIMILAR PROPOSITION WAS ALSO ENUNCIATED BY THE HON'BLE KARN ATAKA HIGH COURT IN THE CASE OF M/S. SSA'S EMERALD MEADOWS (SUPRA) AND AGAINST SUCH A JUDGMENT, THE SPECIAL LEAVE PETITION FILED BY THE REVENUE HAS SINCE BEEN DISMISSED BY THE HON'BLE SUPREME COURT VIDE ORDER DATED 5.8.2016, A COPY OF WHICH IS ALSO PLACED ON RECORD. 10. IN FACT, AT THE TIME OF HEARING, THE LD. CIT-DR HAS NOT DISPUTED THE FACTUAL MATRIX, BUT SOUGHT TO POINT OUT THAT THERE IS DUE APPLICATI ON OF MIND BY THE ASSESSING OFFICER WHICH CAN BE DEMONSTRATED FROM THE DISCUSSION IN TH E ASSESSMENT ORDER, WHEREIN AFTER DISCUSSING THE REASONS FOR THE DISALLOWANCE, HE HAS RECORDED A SATISFACTION THAT PENALTY PROCEEDINGS ARE INITIATED U/S 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OUR CONSIDERED OPINION, T HE ATTEMPT OF THE LD. CIT-DR TO DEMONSTRATE APPLICATION OF MIND BY THE ASSESSING OF FICER IS NO DEFENCE INASMUCH AS THE HON'BLE SUPREME COURT HAS APPROVED THE FACTUM O F NON-STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE AS REFLECTIVE OF NO N-APPLICATION OF MIND BY THE ASSESSING OFFICER. SINCE THE FACTUAL MATRIX IN THE PRESENT CASE CONFORMS TO THE PROPOSITION LAID DOWN BY THE HON'BLE SUPREME COURT, WE PROCEED TO REJECT THE ARGUMENTS ADVANCED BY THE LD. CIT-DR BASED ON THE O BSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. FURTHER, IT IS ALS O NOTICEABLE THAT SUCH PROPOSITION HAS BEEN CONSIDERED BY (SUPRA) AND THE DECISION O F THE TRIBUNAL HOLDING LEVY OF PENALTY IN SUCH CIRCUMSTANCES BEING BAD, HAS BEEN A PPROVED. 11. APART FROM THE AFORESAID, THE LD. CIT-DR MADE A N ARGUMENT BASED ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CA SE OF SMT. KAUSHALYA & OTHERS, 216 ITR 660 (BOM.) TO CANVASS SUPPORT FOR HIS PLEA THAT NON-STRIKING OFF OF THE IRRELEVANT PORTION OF NOTICE WOULD NOT INVALIDATE T HE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. WE HAVE CAREFULLY CONSIDERED THE SAID ARGUMENT SET-UP BY THE LD. CIT-DR AND FIND THAT A SIMILAR ISSUE HAD COME U P BEFORE OUR COORDINATE BENCH IN THE CASE OF DR. SARITA MILIND DAVARE (SUPRA). OUR C OORDINATE BENCH, AFTER CONSIDERING THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN TH E CASE OF SMT. KAUSHALYA & ORS., (SUPRA) AS ALSO THE JUDGMENTS OF THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) AND DHARMENDRA TEXTILE PROCESSORS , 306 ITR 277 (SC) DEDUCED AS UNDER :- '12. A COMBINED READING OF THE DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. B KAUSHALYA AND OTHERS (S UPRA) AND THE DECISION RENDERED BY HON'BLE SUPREME COURT IN THE CASE OF DI LIP N SHROFF (SUPRA) WOULD MAKE IT CLEAR THAT THERE SHOULD BE APPLICATION OF M IND ON THE PART OF THE AO AT THE TIME OF ISSUING NOTICE. IN THE CASE OF LAKHDIR LALJI (SUPRA), THE AO ISSUED ITA NO.238/M/2013- SHRI SUNIL T. DOSHI 7 NOTICE U/S 274 FOR CONCEALMENT OF PARTICULARS OF IN COME BUT LEVIED PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE HO N'BLE GUJARAT HIGH COURT QUASHED THE PENALTY SINCE THE BASIS FOR THE PENALTY PROCEEDINGS DISAPPEARED WHEN IT WAS HELD THAT THERE WAS NO SUPPRESSION OF I NCOME. THE HON'BLE KERALA HIGH COURT HAS STRUCK DOWN THE PENALTY IMPOSED IN T HE CASE OF N.N.SUBRAMANIA IYER VS. UNION OF INDIA (SUPRA), WHEN THERE IS NO I NDICATION IN THE NOTICE FOR WHAT CONTRAVENTION THE PETITIONER WAS CALLED UPON T O SHOW CAUSE WHY A PENALTY SHOULD NOT BE IMPOSED. IN THE INSTANT CASE, THE AO DID NOT SPECIFY THE CHARGE FOR WHICH PENALTY PROCEEDINGS WERE INITIATED AND FURTHE R HE HAS ISSUED A NOTICE MEANT FOR CALLING THE ASSESSEE TO FURNISH THE RETUR N OF INCOME. HENCE, IN THE INSTANT CASE, THE ASSESSING OFFICER DID NOT SPECIFY THE CHARGE FOR WHICH THE PENALTY PROCEEDINGS WERE INITIATED AND ALSO ISSUED AN INCORRECT NOTICE. BOTH THE ACTS OF THE AO, IN OUR VIEW, CLEARLY SHOW THAT THE AO DID NOT APPLY HIS MIND WHEN HE ISSUED NOTICE TO THE ASSESSEE AND HE WAS NO T SURE AS TO WHAT PURPOSE THE NOTICE WAS ISSUED. THE HON'BLE BOMBAY HIGH COURT HA S DISCUSSED ABOUT NON- APPLICATION OF MIND IN THE CASE OF KAUSHALYA (SUPRA ) AND OBSERVED AS UNDER:- '....THE NOTICE CLEARLY DEMONSTRATED NON-APPLICATIO N OF MIND ON THE PART OF THE INSPECTING ASSISTANT COMMISSIONER. THE VAGUENESS AN D AMBIGUITY IN THE NOTICE HAD ALSO PREJUDICED THE RIGHT OF REASONABLE OPPORTU NITY OF THE ASSESSEE SINCE HE DID NOT KNOW WHAT EXACT CHARGE HE HAD TO FACE. IN T HIS BACK GROUND, QUASHING OF THE PENALTY PROCEEDINGS FOR THE ASSESSMENT YEAR 196 7-68 SEEMS TO BE FULLY JUSTIFIED.' IN THE INSTANT CASE ALSO, WE ARE OF THE VIEW THAT T HE AO HAS ISSUED A NOTICE, THAT TOO INCORRECT ONE, IN A ROUTINE MANNER. FURTHER THE NOT ICE DID NOT SPECIFY THE CHARGE FOR WHICH THE PENALTY NOTICE WAS ISSUED. HENCE, IN OUR VIEW, THE AO HAS FAILED TO APPLY HIS MIND AT THE TIME OF ISSUING PENALTY NOTICE TO T HE ASSESSEE.' 12. THE AFORESAID DISCUSSION CLEARLY BRINGS OUT AS TO THE REASONS WHY THE PARITY OF REASONING LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) IS TO PREVAIL. FOLLOWING THE DECISION OF OU R COORDINATE BENCH IN THE CASE OF DR. SARITA MILIND DAVARE (SUPRA), WE HEREBY REJECT THE AFORESAID ARGUMENT OF THE LD. CIT-DR. 13. APART FROM THE AFORESAID DISCUSSION, WE MAY ALS O REFER TO THE ONE MORE SEMINAL FEATURE OF THIS CASE WHICH WOULD DEMONSTRATE THE IM PORTANCE OF NON-STRIKING OFF OF IRRELEVANT CLAUSE IN THE NOTICE BY THE ASSESSING OF FICER. AS NOTED EARLIER, IN THE ASSESSMENT ORDER DATED 10.12.2010 THE ASSESSING OFF ICER RECORDS THAT THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ARE TO BE INIT IATED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. HOWEVER, IN THE NOTICE ISSUE D U/S 274 R.W.S. 271(1)(C) OF THE ACT OF EVEN DATE, BOTH THE LIMBS OF SEC. 271(1)(C) OF THE ACT ARE REPRODUCED IN THE PROFORMA NOTICE AND THE IRRELEVANT CLAUSE HAS NOT B EEN STRUCK-OFF. QUITE CLEARLY, THE OBSERVATION OF THE ASSESSING OFFICER IN THE ASSESSM ENT ORDER AND NON-STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE CLEARLY BRINGS OUT THE DIFFIDENCE ON THE PART OF ASSESSING OFFICER AND THERE IS NO CLEAR AND CRYSTAL LISED CHARGE BEING CONVEYED TO THE ITA NO.238/M/2013- SHRI SUNIL T. DOSHI 8 ASSESSEE U/S 271(1)(C), WHICH HAS TO BE MET BY HIM. AS NOTED BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA ), THE QUASI-CRIMINAL PROCEEDINGS U/S 271(1)(C) OF THE ACT OUGHT TO COMPLY WITH THE P RINCIPLES OF NATURAL JUSTICE, AND IN THE PRESENT CASE, CONSIDERING THE OBSERVATIONS OF T HE ASSESSING OFFICER IN THE ASSESSMENT ORDER ALONGSIDE HIS ACTION OF NON-STRIKI NG OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE SHOWS THAT THE CHARGE BEING MADE AGAINST THE ASSESSEE QUA SEC. 271(1)(C) OF THE ACT IS NOT FIRM AND, THEREFORE, THE PROCEEDI NGS SUFFER FROM NON-COMPLIANCE WITH PRINCIPLES OF NATURAL JUSTICE INASMUCH AS THE ASSESSING OFFICER IS HIMSELF UNSURE AND ASSESSEE IS NOT MADE AWARE AS TO WHICH OF THE T WO LIMBS OF SEC. 271(1)(C) OF THE ACT HE HAS TO RESPOND. 14. THEREFORE, IN VIEW OF THE AFORESAID DISCUSSION, IN OUR VIEW, THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 274 R.W.S. 271(1)(C) OF T HE ACT DATED 10.12.2010 IS UNTENABLE AS IT SUFFERS FROM THE VICE OF NON- APPLI CATION OF MIND HAVING REGARD TO THE RATIO OF THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) AS WELL AS THE JUDGMENT OF THE HON'BLE BOMB AY HIGH COURT IN THE CASE OF SHRI SAMSON PERINCHERY (SUPRA). THUS, ON THIS COUNT ITSELF THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT IS LIABLE TO BE DELETED. 6. CONSIDERING THE DECISION OF THIS BENCH REFERRED ABO VE, IN OUR VIEW A NOTICE ISSUED BY AO U/S 274 R.W.S. 271 OF THE ACT DATED 15 .03.2004 SUFFERED FROM NON-APPLICATION OF MIND HAVING REGARD TO THE RATIO OF HONBLE APEX COURT IN CASE OF DILIP N. SHROFF VS. JCIT [(161 TAXMAN 218 ( SC)] AS WELL AS THE DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF SH RI SAMSON PERINCHERY VS. ACIT [ITA 1154, 953, 1097 AND 1226/MUM/2014] DA TED 05.01.2017. THUS, ON THE LEGAL GROUND, THE PENALTY LEVIED U/S 2 71(1)(C) OF THE ACT IS TO BE DELETED. WE ORDER ACCORDINGLY. HENCE, THE LEGAL ARG UMENT RAISED BY LD. AR OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DAY OF JUNE 2017. SD/- SD/- (G.S. PANNU) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ITA NO.238/M/2013- SHRI SUNIL T. DOSHI 9 MUMBAI; DATED 21/06/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //E COPY/