Gouri Das Maity, Purba Medinipur V. Income Tax Officer-Ward-2, Haldia, Purba Medinipur

ITA 2590/KOL/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3100 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 02-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 13-11-2013
• Court: TRIBUNAL
• Department Lawyers: A R R OY JCIT LD
• Assessee Lawyers: VIANESHWAR NATH DUT TA LD
• Keywords: Retrospective amendment; Initiation of penalty proceedings
• Section: 143(3); 133A; 68

Judgement Text

ITA NO. 2590/KOL/2013-C-AM SMT. GOURI DAS MAITY 1 IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, KOLKATA BEFORE : SHRI MAHAVIR SINGH, JUDICIAL MEMBER, AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER I.T.A NO. 2590/KOL/2013 A.Y 2007-08 SMT. GOURI DAS MAITY VS. I.T.O WARD NO.(2), H ALDIA PAN: ACRPD 6703E (APPELLANT) (RE SPONDENT) FOR THE APPELLANT: SHRI VIANESHWAR NATH DUT TA, ADVOCATE, LD.AR FOR THE RESPONDENT : SHRI A.R R OY, JCIT, LD.SR.DR DATE OF HEARING: 02-02-2016 DATE OF PRONOUNCEMENT: 02 -02-2 016 ORDER SHRI M.BALAGANESH, AM THIS APPEAL OF THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED CIT(A)- XXXIII, KOLKATA IN APPEAL NO. 37/CIT(A)-XXXIII/ITO WARD 2, HAL/11-12 DATED 21- 08-2013 FOR THE ASST YEAR 2007-08 AGAINST THE ORDE R OF PENALTY LEVIED BY THE LEARNED AO U/S. 271(1) ( C) OF THE INCOME TAX ACT, 1961 (H EREINAFTER REFERRED TO AS THE ACT). 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL OF THE ASSESSEE IS AS TO WHETHER THE PENALTY U/S. 271(1) ( C) OF THE ACT COULD BE LEVIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSES SMENT U/S. 143(3) OF THE ACT WAS COMPLETED ON 29-12-2009, WHEREIN ADDITION TO THE E XTENT OF RS.10,61,538/- WAS MADE BY THE LD.AO TOWARDS CASH DEPOSITS (RS.10,11,000/-) IN THE BANK ACCOUNT U/S. 68 OF THE ACT AND INTEREST INCOME (RS.50,538/-) FROM DEPOSIT S. THE LD.AO INITIATED THE PENALTY PROCEEDINGS U/S. 271(1) ( C) OF THE ACT FOR CONCEA LMENT OF INCOME AND FURNISHING ITA NO. 2590/KOL/2013-C-AM SMT. GOURI DAS MAITY 2 INACCURATE PARTICULARS OF INCOME IN THE ASSESSMENT ORDER WITHOUT MENTIONING THE SPECIFIC CHARGE ON WHICH THE SAID PENALTY PROCEEDIN GS HAVE BEEN INITIATED BY HIM. THE LD. AO VIDE HIS ORDER DATED 25-06-2010 LEVIED THE IMPUGNED PENALTY U/S. 271(1)( C) OF THE ACT. THIS ACTION OF THE LD.AO WAS UPHELD BY THE LD. CIT(A) ON 1 ST APPEAL. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- 1. FOR THAT THE PENALTY U/S 271(1) (C) OF THE ACT IS NOT EXIGIBLE AND IS NOT TENABLE IN FACT NOR IN LAWS. 2. FOR THAT THE LD. CIT (A) ERRED IN CONFIRMING THE PENALTY U/S 271(1) (C) OF THE ACT IN RESPECT OF THE ADDITION OF RS.6,88,277/- . 3. FOR THAT NO PROPER OPPORTUNITIES WERE AVAILED BY THE ASSESSEE. 4. FOR THAT APPELLANT CRAVES LEAVE TO AMEND, ALTER, ADD, DELETE OR SUBSTITUTE ANY OTHER GROUNDS OF APPEAL BEFORE OR AT THE TIME O F HEARING OF THE APPEAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND LOT OF FORCE IN THE ARGUMENTS OF TH E LD.AR OF THE ASSESSEE THAT THE LD.AO HAD NOT MENTIONED ANY SPECIFIC CHARGE ON WHIC H THE SAID PENALTY PROCEEDINGS HAVE BEEN INITIATED BY HIM EITHER IN THE ASSESSMENT ORDER OR IN THE SHOW-CAUSE NOTICE ISSUED U/S. 271(1) ( C) R.W.S 274 OF THE ACT. WE HO LD THAT MENTIONING SPECIFIC CHARGE IS PRE-REQUISITE FOR INITIATING THE PENALTY PROCEEDIN GS ON THE ASSESSEE. WE ALSO PLACE THE THE FOLLOWING DECISIONS IN SUPPORT OF OUR CONTENTIO NS :- DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN T HE CASE OF CHANDRA PRAKASH BUBNA VS. ITO, W 27(3), KOLKATA REPORTED IN (2015) 64 TAXMANN.COM 155(KOL- TRIB.), WHEREIN IT WAS HELD AS UNDER:- 10 . IN THIS CASE, THE ASSESSING OFFICER HAS NOT B ROUGHT OUT ANY SPECIFIC CHARGE FOR WHICH THE PENALTY HAS BEEN IMPO SED 011 THE ASSESSEE ULS 271(1)(C) OF THE ACT HE HAS NOT BROUGH T OUT WHETHER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOM E OR WHETHER THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F INCOME. 11. THE ASSESSING OFFICER IN THIS CASE LEVIED THE P ENALTY FOR BOTH THE CHARGES WITHOUT MENTIONING ANY SPECIFIC CHARGE. IN CIT V. ATUL MOHAN BINDAL [2009] 317 ITR 1(SC), WHERE HON'BLE SU PREME COURT WAS CONSIDERING THE SAME PROVISION, IT OBSERVED TH AT THE ASSESSING OFFICER HAS TO BE SATISFIED THAT A PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF ITA NO. 2590/KOL/2013-C-AM SMT. GOURI DAS MAITY 3 SUCH INCOME. THUS THE SATISFACTION OF THE ASSESSING OFFICER ABOUT THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISH ING OF INACCURATE PARTICULARS OF SUCH INCOME IS ESSENTIAL BEFORE LEVYING ANY PENALTY U/S 271(L)(C). THE ASSESSING OFFICER AS IS APPARENT FROM THE PENALTY ORDER HAS NOT SATISFIED ABOUT THE CONCE ALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME ON THE PART OF THE ASSESSEE, ON THIS BASIS ITSELF THE PENALTY DELETED') DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN T HE CASE OF SUVAPRASANNA BHATTACHARYA VS. ACIT, CIR-55, KOLKATA IN ITA NO. 1 303/KOL/2010 FOR A.Y 2006-07 VIDE ORDER DATED 06-11-2015 , WHICH IN TURN PLACED RELIANCE ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR VS. MANJUNATHA COTTON AND GINNING FACTORY REPORTED IN 3 59 ITR 565 (KAR) AND WHICH CONSIDERED THE APPLICABILITY OF NEWLY INSERTE D PROVISION OF SECTON 271(1B) OF THE ACT WITH RETROSPECTIVE EFFECT FROM 1 .4.1989 AND THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF MS. MAD HUSHREE GUPTA VS UNION OF INDIA REPORTED IN 317 ITR 107 (DEL) IN DISPOSING THE APPEAL OF ASSESSEE ON PENALTY LEVIED U/S. 271(1) ( C ) OF THE ACT. THE I TAT HAS HELD AS UNDER:- 6. WE SHALL NOW DEAL WITH THE QUESTION WHETHER PRO PER SATISFACTION WAS ARRIVED AT BY THE AO FOR INITIATIN G PENALTY PROCEEDINGS U/S.271(1)(C), IN THE COURSE OF CONCLUD ING THE ASSESSMENT PROCEEDINGS, WHEREIN THE ADDITIONS IN RE SPECT OF WHICH PENALTY WAS IMPOSED WERE MADE. ON THE ABOVE ISSUE, THE FIRST ASPECT WHICH, WE NOTICE IS THAT IN THE ORDER OF ASS ESSMENT, WHICH WE HAVE EXTRACTED IN THE EARLIER PART OF THIS ORDER, N OWHERE SPELLS OUT OR INDICATES THAT THE AO WAS OF THE VIEW THAT THE A SSESSEE WAS GUILTY OF EITHER CONCEALING PARTICULARS OF INCOME OR FURNI SHING INACCURATE PARTICULARS OF INCOME. THE OFFER TO TAX OF INCOME BY THE ASSESSEE HAS JUST BEEN ACCEPTED. IT IS NO DOUBT TRUE THAT I T IS NOT THE REQUIREMENT OF THE LAW THAT THE SATISFACTION HAS TO BE RECORDED IN A PARTICULAR MANNER, ESPECIALLY AFTER THE INTRODUCTIO N OF THE PROVISIONS OF SEC.271(1B) OF THE ACT WITH RETROSPEC TIVE EFFECT FROM 1.4.1989. NEVERTHELESS, AS LAID DOWN BY THE HONBL E DELHI HIGH COURT IN THE CASE OF MS.MADHUSHREE GUPTA (SUPRA), T HE POSITION OF LAW BOTH PRE AND POST SEC.271(1B) OF THE ACT IS SIM ILAR, INASMUCH, THE AO WILL HAVE TO ARRIVE AT A PRIMA FACIE SATISFA CTION DURING THE COURSE OF PROCEEDINGS WITH REGARD TO THE ASSESSEE H AVING CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS, BEFORE HE INITIATES PENALTY PROCEEDINGS PRIMA FACIE SATISFACTION OF THE AO THAT THE CASE MAY DESERVE THE IMPOSITION OF PENALTY SHOULD BE ITA NO. 2590/KOL/2013-C-AM SMT. GOURI DAS MAITY 4 DISCERNIBLE FROM THE ORDER PASSED DURING THE COURSE OF THE PROCEEDINGS. AT THE STAGE OF INITIATION OF PENALTY PROCEEDING, THE ORDER PASSED BY THE AO NEED NOT REFLECT SATISFACTIO N VIS-A-VIS EACH AND EVERY ITEM OF ADDITION OR DISALLOWANCE, IF OVER ALL SENSE GATHERED FROM THE ORDER IS THAT A FURTHER PROGNOSIS IS CALLED FOR. THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF MAK DATA (P) LTD. (SUPRA) HAS TO BE UNDERSTOOD IN THE C ONTEXT OF THE FACTS OF THE SAID CASE. THE RELEVANT PORTION OF THE JUDGMENT IN THE AFORESAID CASE, READS THUS: 9. WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SUR RENDER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEARCH C ONDUCTED IN THE SISTER CONCERN OF THE ASSESSEE. IN THAT SITUATI ON, IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NOTICED THAT C ERTAIN DOCUMENTS COMPRISING OF SHARE APPLICATION FORMS, BA NK STATEMENTS, MEMORANDUM OF ASSOCIATION OF COMPANIES, AFFIDAVITS, COPIES OF INCOME TAX RETURNS AND ASSESSMENT ORDERS AND BLANK SHARE TRANSFER 8 DEEDS DULY SIGNED, HAVE BEEN IMPOU NDED IN THE COURSE OF SURVEY PROCEEDINGS UNDER SECTION 133A CON DUCTED ON 16.12.2003, IN THE CASE OF A SISTER CONCERN OF THE ASSESSEE. THE SURVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN THE INTENTI ON OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS IN COME, IT WOULD HAVE FILED THE RETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING THE COURSE OF TH E ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLEAR THAT THE ASS ESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IT IS THE STA TUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOK S OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DE CLARE ITS TRUE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEA R TO YEAR. THE AO, IN OUR VIEW, HAS RECORDED A CATEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED TRUE PART ICULARS OF INCOME AND IS LIABLE FOR PENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. 10. THE AO HAS TO SATISFY WHETHER THE PENALTY PROCE EDINGS BE INITIATED OR NOT DURING THE COURSE OF THE ASSESSMEN T PROCEEDINGS AND THE AO IS NOT REQUIRED TO RECORD HIS SATISFACTI ON IN A PARTICULAR MANNER OR REDUCE IT INTO WRITING. 7. THE REVENUE PLACES RELIANCE ONLY ON THE SENTENCE APPEARING IN PARA-10 OF THE JUDGMENT WITHOUT READING IT IN THE C ONTEXT OF THE ITA NO. 2590/KOL/2013-C-AM SMT. GOURI DAS MAITY 5 OBSERVATIONS IN THE LAST PORTION OF PARA-9 OF THE SAID JUDGMENT. THEREFORE EVEN THE HONBLE SUPREME COURTS DECISION SUGGESTS THAT THE SATISFACTION NEED NOT BE RECORDED IN A PARTICUL AR MANNER BUT FROM A READING OF THE ASSESSMENT ORDER AS A WHOLE S UCH SATISFACTION SHOULD BE CLEARLY DISCERNIBLE. IF THE AO ACCEPTS AL L THE CONTENTIONS OF THE ASSESSEE AND THE OFFER OF INCOME THAT HAS NO T BEEN DECLARED IN THE RETURN OF INCOME TO TAX WITHOUT INDICATING E ITHER DIRECTLY OR INDIRECTLY THAT THE ASSESSEE HAS CONCEALED PARTICUL ARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME, IT CANN OT BE SAID THAT SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS IS DISCERNIBLE FROM THE ORDER OF ASSESSMENT. IF THE ASSESSEE IN GOOD FA ITH OFFERS INCOME TO TAX VOLUNTARILY PRIOR TO ANY POSITIVE DETECTION BY THE AO, SUCH VOLUNTARY OFFER CANNOT BE TAKEN ADVANTAGE OF BY THE AO TO INITIATE PENALTY PROCEEDINGS AGAINST THE ASSESSEE WITHOUT SP ECIFYING THE REASONS WHY PENALTY PROCEEDINGS ARE INITIATED U/S.2 71(1)(C) OF THE ACT. IN THE PRESENT CASE, WE HAVE READ THE ORDER OF ASSESSMENT AS A WHOLE AND ARE SATISFIED THAT SATISFACTION FOR INITI ATION OF PENALTY PROCEEDINGS IS NOT DISCERNIBLE FROM THE ORDER OF AS SESSMENT. WE THEREFORE CONCUR WITH THE ARGUMENT OF THE LEARNED C OUNSEL FOR THE ASSESSEE THAT INITIATION OF PENALTY PROCEEDINGS WAS NOT PROPER IN THE PRESENT CASE AND ON THAT GROUND THE IMPOSITION OF PENALTY U/S.271(1)( C) OF THE ACT IS UNSUSTAINABLE. 8.2 THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY (SUPR A) HAS LAID DOWN THE FOLLOWING PRINCIPLES TO BE FOLLOWED IN THE MATTER OF IMPOSING PENALTY U/S.271(1)(C) OF THE ACT. THE FINAL CONCLUSION OF THE HONBLE COURT WAS AS F OLLOWS:- 63. IN THE LIGHT OF WHAT IS STATED ABOVE, WHAT EME RGES IS AS UNDER: A) PENALTY UNDER SECTION 271(1)(C) IS A CIVIL LIAB ILITY. B) MENS REA IS NOT AN ESSENTIAL ELEMENT FOR IMPOSI NG PENALTY FOR BREACH OF CIVIL OBLIGATIONS OR LIABILITIES. C) WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDI ENT FOR ATTRACTING CIVIL LIABILITY. D) EXISTENCE OF CONDITIONS STIPULATED IN SECTION 2 71(1)(C) IS A SINE QUA NON FOR INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271. E) THE EXISTENCE OF SUCH CONDITIONS SHOULD BE DISC ERNIBLE FROM THE ASSESSMENT ORDER OR ORDER OF THE APPELLATE AUTHORIT Y OR REVISIONAL AUTHORITY. ITA NO. 2590/KOL/2013-C-AM SMT. GOURI DAS MAITY 6 F) EVEN IF THERE IS NO SPECIFIC FINDING REGARDING THE EXISTENCE OF THE CONDITIONS MENTIONED IN SECTION 271(1)(C), AT LEAST THE FACTS SET OUT IN EXPLANATION 1(A) & (B) IT SHOULD BE DISCERNIBLE FROM THE SAID ORDER WHICH WOULD BY A LEGAL FICTION CONSTITUTE CON CEALMENT BECAUSE OF DEEMING PROVISION. G) EVEN IF THESE CONDITIONS DO NOT EXIST IN THE AS SESSMENT ORDER PASSED, AT LEAST, A DIRECTION TO INITIATE PROCEEDIN GS UNDER SECTION 271(L)(C) IS A SINE QUA NON FOR THE ASSESSMENT OFFI CER TO INITIATE THE PROCEEDINGS BECAUSE OF THE DEEMING PROVISION CONTAI NED IN SECTION 1(B). H) THE SAID DEEMING PROVISIONS ARE NOT APPLICABLE TO THE ORDERS PASSED BY THE COMMISSIONER OF APPEALS AND THE COMMI SSIONER. I) THE IMPOSITION OF PENALTY IS NOT AUTOMATIC. J) IMPOSITION OF PENALTY EVEN IF THE TAX LIABILITY IS ADMITTED IS NOT AUTOMATIC. K) EVEN IF THE ASSESSEE HAS NOT CHALLENGED THE ORD ER OF ASSESSMENT LEVYING TAX AND INTEREST AND HAS PAID TAX AND INTER EST THAT BY ITSELF WOULD NOT BE SUFFICIENT FOR THE AUTHORITIES EITHER TO INITIATE PENALTY PROCEEDINGS OR IMPOSE PENALTY, UNLESS IT IS DISCERN IBLE FROM THE ASSESSMENT ORDER THAT, IT IS ON ACCOUNT OF SUCH UNE ARTHING OR ENQUIRY CONCLUDED BY AUTHORITIES IT HAS RESULTED IN PAYMENT OF SUCH TAX OR SUCH TAX LIABILITY CAME TO BE ADMITTED AND IF NOT I T WOULD HAVE ESCAPED FROM TAX NET AND AS OPINED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. L) ONLY WHEN NO EXPLANATION IS OFFERED OR THE EXPL ANATION OFFERED IS FOUND TO BE FALSE OR WHEN THE ASSESSEE FAILS TO PROVE THAT THE EXPLANATION OFFERED IS NOT BONA FIDE, AN ORDER IMPO SING PENALTY COULD BE PASSED. M) IF THE EXPLANATION OFFERED, EVEN THOUGH NOT SUB STANTIATED BY THE ASSESSEE, BUT IS FOUND TO BE BONA FIDE AND ALL FACT S RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL I NCOME HAVE BEEN DISCLOSED BY HIM, NO PENALTY COULD BE IMPOSED. N) THE DIRECTION REFERRED TO IN EXPLANATION IB TO SECTION 271 OF THE ACT SHOULD BE CLEAR AND WITHOUT ANY AMBIGUITY. O) IF THE ASSESSING OFFICER HAS NOT RECORDED ANY S ATISFACTION OR HAS NOT ISSUED ANY DIRECTION TO INITIATE PENALTY PROCEE DINGS, IN APPEAL, IF THE APPELLATE AUTHORITY RECORDS SATISFACTION, THEN THE PENALTY PROCEEDINGS HAVE TO BE INITIATED BY THE APPELLATE A UTHORITY AND NOT THE ASSESSING AUTHORITY. ITA NO. 2590/KOL/2013-C-AM SMT. GOURI DAS MAITY 7 P) NOTICE UNDER SECTION 274 OF THE ACT SHOULD SPEC IFICALLY STATE THE GROUNDS MENTIONED IN SECTION 271(1)(C), I.E., WHETH ER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INCORREC T PARTICULARS OF INCOME Q) SENDING PRINTED FORM WHERE ALL THE GROUND MENTI ONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW. R) THE ASSESSEE SHOULD KNOW THE GROUNDS WHICH HE H AS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLES OF NATURAL JUST ICE IS OFFENDED. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED TO THE ASSESSEE. S) TAKING UP OF PENALTY PROCEEDINGS ON ONE LIMB AN D FINDING THE ASSESSEE GUILTY OF ANOTHER LIMB IS BAD IN LAW. T) THE PENALTY PROCEEDINGS ARE DISTINCT FROM THE A SSESSMENT PROCEEDINGS. THE PROCEEDINGS FOR IMPOSITION OF PENA LTY THOUGH EMANATE FROM PROCEEDINGS OF ASSESSMENT, IT IS INDEP ENDENT AND SEPARATE ASPECT OF THE PROCEEDINGS. U) THE FINDINGS RECORDED IN THE ASSESSMENT PROCEED INGS IN SO FAR AS 'CONCEALMENT OF INCOME' AND 'FURNISHING OF INCORREC T PARTICULARS' WOULD NOT OPERATE AS RES JUDICATA IN THE PENALTY PR OCEEDINGS. IT IS OPEN TO THE ASSESSEE TO CONTEST THE SAID PROCEEDING S ON MERITS. HOWEVER, THE VALIDITY OF THE ASSESSMENT OR REASSESS MENT IN PURSUANCE OF WHICH PENALTY IS LEVIED, CANNOT BE THE SUBJECT MATTER OF PENALTY PROCEEDINGS. THE ASSESSMENT OR REASSESSMENT CANNOT BE DECLARED A S INVALID IN THE PENALTY PROCEEDINGS. (EMPHASIS SUPPLIED) IT IS CLEAR FROM THE AFORESAID DECISION THAT ON THE FACTS OF THE PRESENT CASE THAT THE SHOW CAUSE NOTICE U/S. 274 OF THE ACT IS DEFECTIVE AS IT DOES NOT SPELL OUT THE GROUNDS ON WHICH THE PENALTY IS S OUGHT TO BE IMPOSED. FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIG H COURT, WE HOLD THAT THE ORDERS IMPOSING PENALTY IN ALL THE ASSESSM ENT YEARS HAVE TO BE HELD AS INVALID AND CONSEQUENTLY PENALTY IMPOSED IS CANCELLED. RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS, WE HAVE NO HESITATION IN CANCELLING THE IMPUGNED PENALTY LEVIED U/S. 271 ( 1) ( C ) OF THE ACT BY THE LD. AO AND CONFIRMED BY THE LD. CIT(A). THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL IS ALLOWED. ITA NO. 2590/KOL/2013-C-AM SMT. GOURI DAS MAITY 8 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED AS STATED ABOVE. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 02 - 02- 2016 1.. THE APPELLANT: SMT. GOURI DAS MAITY VILL JARAN AGAR P.O HARIA, CONTAI, DIST PURBA MEDINIPUR PIN 721430. 2 THE RESPONDENT- THE I T O, W 2 HALDIA, BASUDEVP UR P.O KHANJANCHAK PURBA MEDINIPUR -721 602. 3 /THE CIT, 4.THE CIT(A ) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS SD/- ( MAHAVIR SINGH, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE: DATE 02 -02-2016 COPY OF THE ORDER FORWARDED TO:-