Subhash Kumar Agarwal , Howrah V. ITO, Ward - 46(1) , Kolkata

ITA 2658/KOL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3564 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 24-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C J SINGH J
• Assessee Lawyers: K M ROY; MANOJ KUMAR JAIN
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 69; 271(1)(c)

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO.2658-2659/KOL/2018 ASSESSMENT YEAR: 2014-15 SUBHASH KUMAR AGARWAL 1, KALITALA LANE SALKIA, HOWRAH-711106 [ PAN NO. AFWPA 1923 K ] / V/S . INCOME TAX OFFICER WARD-46(1), 3, GOVERNMENT PLACE, EAST, KOLKATA-700 001 /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI K.M. ROY, FCA & MANOJ KUMAR JAIN, FCA ! /BY REVENUE SHRI C.J. SINGH, JCIT-DR /DATE OF HEARING 31-01-2019 /DATE OF PRONOUNCEMENT 20-02-2019 /O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THESE TWO ASSESSEES APPEALS FOR ASSESSMENT YEAR 2 014-15 ARISE AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-14, KOLKATAS SEPARATE ORDERS DATED 25.06.2018 & 15.06.2018 PASSED IN CASE NO.10489, 10 037/CIT(A)-14/WD- 46(1)/2016-17, AFFIRMING THE ASSESSING OFFICERS AC TION IMPOSING PENALTY OF 1 LAC & 6,63,297 (ASSESSMENT YEAR-WISE) INVOLVING PROCEEDIN GS 271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE(S) PERUSED. 2. IT TRANSPIRES AT THE OUTSET THAT BOTH THE ASSESS EES INSTANT APPEAL(S) SUFFER FROM IDENTICAL DELAY OF 107 DAYS IN FILING. HIS CONDONA TION PETITION / AFFIDAVIT DATED ITA NO.2658-59/KOL/2018 ASSESSMENT YE AR 2014-15 SUBHASH KR. AGARWAL VS ITO WD-46(1), KOL. PAGE 2 21.12.2018 PLEADS THAT SAME IS NEITHER INTENTIONAL NOR DELIBERATE BUT ON ACCOUNT OF ILL HEALTH. HE HAS PLACED ON RECORD MEDICAL CERTIFICATE TO THIS EFFECT AS WELL. THE REVENUE IS FAIR ENOUGH IN NOT DISPUTING CORRECTNESS OF THE SAID SOLEMN AVERMENTS. WE THEREFORE CONDONE THE IMPUGNED IDENTICAL DELAY OF 107 DAYS I N FILING OF BOTH THESE APPEALS. THESE TWO CASES ARE NOW TAKEN UP FOR ADJUDICATION O N MERITS. 3. IT EMERGES DURING THE COURSE OF HEARING THAT BOT H THE LOWER AUTHORITIES HAVE IMPOSED THE IMPUGNED PENALT(IES) IN ASSESSEES CASE U/S 271(1)(C) OF THE ACT. LEARNED COUNSEL REPRESENTING ASSESSEE BEFORE US HAS FILED A COPY OF THE THIS TRIBUNALS CO- ORDINATE BENCHS DECISION IN ITA NO. 956/KOL/2016 DECIDED ON 01.12.2017 IN JEEETMAL CHORARIA VS. ACIT WHEREIN THE RELEVANT PEN ALTY STOOD DELETED SINCE ITS HAD NOT INDICATED THE RELEVANT COMPONENT OF EITHER CONC EALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME ALIKE THE FACTS IN THE INSTAN T CASE INVOLVING SIMILAR PENALTY NOTICE. LEARNED CO-ORDINATE BENCHS DETAILED DISCUS SION IN ASSESSEES FAVOUR READS AS FOLLOWS:- 3. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY U/S 271(1)(C) OF THE ACT WAS IMPOSED ON THE ASSESSEE BY THE AO ARE AS FOLLOWS :- THE ASSESSEE IS AN INDIVIDUAL. HE CARRIES ON THE BU SINESS OF TRADING IN CLOTH AND ACTS AS COMMISSION AGENT IN CLOTH DEALING AND R EADY-MADE GARMENTS AS PROPRIETOR M/S J.M JAIN. IN THE ASSESSMENT COMPLETE D ULS.143(3) OF THE ACT, THE AO NOTICED THAT OUT OF THE SUM OF RS.14,21,052 WHICH WAS CLAIMED AS EXPENSES UNDER THE ELECTRICITY EXPENSES, A SUM OF R S.1,81,730 DID NOT RELATE TO THE BUSINESS PREMISES OF THE ASSESSEE. THE SAID SUM WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IN RESPECT OF THE AFORESAID ADDITION MADE IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)( C) OF THE ACT. THERE WERE SEVEN OTHER ADDITIONS MADE T O THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. THE INITIATIO N OF PENALTY PROCEEDINGS WAS NOT MADE WITH REFERENCE TO ANY SPECIFIC ITEM OF ADD ITION. IN THE LAST PARAGRAPH OF THE ORDER OF ASSESSMENT, THE AO HAS OBSERVED AS FOLLOWS: 'PENALTY PROCEEDINGS U/S.271 (1)(C) HAS BEEN INIT IATED IN THIS REGARD' 4. IN THE PENALTY PROCEEDINGS THE ASSESSEE TRIED TO EXPLAIN THAT THE CLAIM FOR DEDUCTION ON ACCOUNT OF ELECTRICITY EXPENSES WHICH DID NOT RE LATE TO THE PREMISES IN WHICH BUSINESS WAS NOT CARRIED WAS MADE INADVERTENTLY. WH EN THE MISTAKE WAS POINTED OUT IT WAS ACCEPTED BY THE ASSESSEE. THE ASSESSEE THUS PLE ADED THAT THERE WAS NO INTENTION TO CONCEAL OR FURNISH PARTICULARS OF INCOME. THIS E XPLANATION WAS NOT ACCEPTED IN THE PENALTY PROCEEDINGS AND PENALTY U/S 271(1)(C) OF TH E ACT WAS IMPOSED ON THE ASSESSEE BY THE AO. THE ORDER OF AO WAS CONFIRMED BY CIT(A). AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE HAS FILED THE PRESENT APPEAL BE FORE THE TRIBUNAL. 5. THE ID. COUNSEL FOR THE ASSESSEE SUBMITTED BEFOR E US THAT THE SHOW CAUSE NOTICE ISSUED U/S 274 OF THE ACT BEFORE IMPOSING PENALTY D OES NOT CONTAIN THE SPECIFIC CHARGE ITA NO.2658-59/KOL/2018 ASSESSMENT YE AR 2014-15 SUBHASH KR. AGARWAL VS ITO WD-46(1), KOL. PAGE 3 THE SHOW CAUSE NOTICE U/S 274 OF THE ACT WAS FILED BEFORE US AND PERUSAL OF THE SAME REVEALS THAT AO HAS NOT STRUCK OUT THE IRRELEVANT P ORTION IN THE SHOW CAUSE NOTICE AND THEREFORE THE SHOW CAUSE NOTICE DOES NOT SPECIFY TH E CHARGE AGAINST THE ASSESSEE NAMELY AS TO WHETHER THE CHARGE IS OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE SAME IS REPRODUCED FOR THE PURPOSE OF READY REFERENCE: ' HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FU RNISHED INACCURATE PARTICULARS OF SUCH INCOME. ' 6. THE ID. COUNSEL FOR THE ASSESSEE DREW OUR ATTENT ION TO THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSA'S E MERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN THE HON'BLE KARNATAKA HIG H COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTO N AND GINNING FACTORY (2013) 359 ITR 565 TOOK A VIEW THAT IMPOSING OF PENALTY U/ S 271(1)(C) OF THE ACT IS BAD IN LAW AND INVALID FOR THE REASON THAT THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETH ER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THE ID. COUNSEL FURTHER BROUGHT TO OUR NOTICE THAT AS AGAIN ST THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEA L IN SLP IN CC NO.11485 OF 2016 AND THE HON'BLE SUPREME COURT BY ITS ORDER DAT ED 05.08.2016 DISMISSED THE SLP PREFERRED BY THE DEPARTMENT. THE ID. COUNSEL ALSO B ROUGHT TO OUR NOTICE THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO. 1154 OF 2014 DATED 05.01.2017 WHEREIN THE H ON'BLE BOMBAY HIGH COURT FOLLOWING THE DECISION OF THE HON'BLE KARNATAKA HIG H COURT IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) CAME TO THE CONCLUSION THAT IMPOSITION OF PENALTY ON DEFECTIVE SHOW CAUSE NOTIC E WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT BE SUSTAINED. OUR ATTEN TION WAS ALSO DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS ACIT IN ITA NO. 1303/KO1/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS BEEN FOLLOWED BY THE TRIBUNAL. 7. THE LEARNED DR SUBMITTED THAT THE HON'BLE CALCUT TA HIGH COURT IN THE CASE OF DR.SYAMAL BARAN MONDAL VS. CIT (2011) 244 CTR 631 ( CAL) HAS TAKEN A VIEW THAT SEC.271 DOES NOT MANDATE THAT THE RECORDING OF SATI SFACTION ABOUT CONCEALMENT OF INCOME MUST BE IN SPECIFIC TERMS AND WORDS AND THAT SATISFACTION OF AO MUST REFLECT FROM THE ORDER EITHER WITH EXPRESSED WORDS RECORDED BY THE AO OR BY HIS OVERT ACT AND ACTION. IN OUR VIEW THIS DECISION IS ON THE QUESTIO N OF RECORDING SATISFACTION AND NOT IN THE CONTEXT OF SPECIFIC CHARGE IN THE MANDATORY SHO W CAUSE NOTICE U/S.274 OF THE ACT. THEREFORE REFERENCE TO THIS DECISION, IN OUR VIEW I S NOT OF ANY HELP TO THE PLEA OF THE REVENUE BEFORE US. 8. THE LEARNED DR RELIED ON THREE DECISIONS OF MUMB AI ITAT VIZ., (I) DHANRAJ MILLS PVT. LTD. VS. ACIT ITA NO.3830 & 3833/MUM/2009 DATE D 21.3.2017; (II) EARTHMOVING EQUIPMENT SERVICE CORPORATION VS. DCIT 22(2), MUMBAI, (2017) 84 TAXMANN.COM 51 (III) MAHESH M.GANDHI VS. ACIT VS. A CIT ITA NO.2976/MUM/2016 DATED 27.2.2017. RELIANCE WAS PLAC ED ON TWO DECISIONS OF THE HON'BLE BOMBAY HIGH COURT VIZ., (I) CIT VS. KAUSHAL YA 216 ITR 660(BOM) AND (II) MLS.MAHARAJ GARAGE & CO. VS. CIT DATED 22.8.2017. T HIS DECISION WAS REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LEARNED DR. THIS IS A N UNREPORTED DECISION AND A COPY OF ITA NO.2658-59/KOL/2018 ASSESSMENT YE AR 2014-15 SUBHASH KR. AGARWAL VS ITO WD-46(1), KOL. PAGE 4 THE SAME WAS NOT FURNISHED. HOWEVER A GIST OF THE R ATIO LAID DOWN IN THE DECISION HAS BEEN GIVEN IN THE WRITTEN NOTE FILED BEFORE US. 9. IN THE CASE OF CIT VS. KAUSHALYA (SUPRA), THE HO N'BLE BOMBAY HIGH COURT HELD THAT SECTION 274 OR ANY OTHER PROVISION IN THE ACT OR TH E RULES, DOES NOT EITHER MANDATE THE GIVING OF NOTICE OR ITS ISSUANCE IN A PARTICULAR FO RM. PENALTY PROCEEDINGS ARE QUASI- CRIMINAL IN NATURE. SECTION 274 CONTAINS THE PRINCI PLE OF NATURAL JUSTICE OF THE ASSESSEE BEING HEARD BEFORE LEVYING PENALTY. RULES OF NATURA L JUSTICE CANNOT BE IMPRISONED IN ANY STRAIGHT-JACKET FORMULA. FOR SUSTAINING A COMPL AINT OF FAILURE OF THE PRINCIPLES OF NATURAL JUSTICE ON THE GROUND OF ABSENCE OF OPPORTU NITY, IT HAS TO BE ESTABLISHED THAT PREJUDICE IS CAUSED TO THE CONCERNED PERSON BY THE PROCEDURE FOLLOWED. THE ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS T O WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING O F THE INACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE ITAT MUMBAI BENCH IN THE CASE OF DHANRAJ MILLS PVT.LTD. (SUPRA) FOLLOWED THE DECISION RENDERED BY THE JURISDICTIONAL HON'BLE BOMBAY HIGH COURT IN THE CASE OF KAUSHALYA (SUPRA) AND CHO SE NOT TO FOLLOW DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNA THA COTTON & GINNING FACTORY (SUPRA). RELIANCE WAS ALSO PLACED BY THE ITAT MUMBA I IN THIS DECISION ON THE DECISION OF HON'BLE PATNA HIGH COURT IN THE CASE OF CIT V. MITHILA MOTOR'S (P.) LTD. [1984] 149 ITR 751 (PATNA) WHEREIN IT WAS HELD THAT UNDER SECTION 274 OF THE INCOME- TAX ACT, 1961, ALL THAT IS REQUIRED IS THAT THE ASS ESSEE SHOULD BE GIVEN AN OPPORTUNITY TO SHOW CAUSE. NO STATUTORY NOTICE HAS BEEN PRESCRIBED IN THIS BEHALF. HENCE, IT IS SUFFICIENT IF THE ASSESSEE WAS AWARE OF THE CHARGES HE HAD TO MEET AND WAS GIVEN AN OPPORTUNITY OF BEING HEARD. A MISTAKE IN THE NOTICE WOULD NOT INVALIDATE PENALTY PROCEEDINGS. 10. IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE CO RPORATION (SUPRA), THE ITAT MUMBAI DID NOT FOLLOW THE DECISION RENDERED IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA) FOR THE REASON THAT PENALTY IN THAT CASE WAS DELETED FOR SO MANY REASONS AND NOT SOLELY ON THE BASIS OF DEFECT IN SHOW CAUSE NOTICE U/S.274 OF THE ACT. THIS IS NOT FACTUALLY CORRECT. ONE OF THE PART IES BEFORE THE GROUP OF ASSESSEES BEFORE THE KARNATAKA HIGH COURT IN THE CASE OF MANJ UNATHA COTTON & GINNING (SUPRA) WAS AN ASSESSEE BY NAME M/S.VEERABHADRAPPA SANGAPPA & CO., IN ITA NO.5020 OF 2009 WHICH WAS AN APPEAL BY THE REVENUE. THE TRIBUN AL HELD THAT ON PERUSAL OF THE NOTICE ISSUED UNDER SECTION 271(1)(C) OF THE ACT, I T IS CLEAR THAT IT IS A STANDARD PRO FORMA USED BY THE ASSESSING AUTHORITY. BEFORE ISSUI NG THE NOTICE THE INAPPROPRIATE WORDS AND PARAGRAPHS WERE NEITHER STRUCK OFF NOR DE LETED. THE ASSESSING AUTHORITY WAS NOT SURE AS TO WHETHER SHE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD EITHER CONCEALED ITS INCOME OR HAS FURNISHED INACCURATE DE TAILS. THE NOTICE IS NOT IN COMPLIANCE WITH THE REQUIREMENT OF THE PARTICULAR S ECTION AND THEREFORE IT IS A VAGUE NOTICE, WHICH IS ATTRIBUTABLE TO A PATENT NON APPLI CATION OF MIND ON THE PART OF THE ASSESSING AUTHORITY. FURTHER, IT HELD THAT THE ASSE SSING OFFICER HAD MADE ADDITIONS UNDER SECTION 69 OF THE ACT BEING UNDISCLOSED INVES TMENT. IN THE APPEAL, THE SAID FINDING WAS SET-ASIDE. BUT ADDITION WAS SUSTAINED O N A NEW GROUND, THAT IS UNDER VALUATION OF CLOSING STOCK. SINCE THE ASSESSING AUT HORITY HAD INITIATED PENALTY PROCEEDINGS BASED ON THE ADDITIONS MADE UNDER SECTI ON 69 OF THE ACT, WHICH WAS STRUCK DOWN BY THE APPELLATE AUTHORITY, THE INITIAT ED PENAL PROCEEDINGS, NO LONGER EXISTS. IF THE APPELLATE AUTHORITY HAD INITIATED PE NAL PROCEEDINGS ON THE BASIS OF THE ADDITION SUSTAINED UNDER A NEW GROUND IT HAS A LEGA L SANCTUM. THIS WAS NOT SO IN THIS ITA NO.2658-59/KOL/2018 ASSESSMENT YE AR 2014-15 SUBHASH KR. AGARWAL VS ITO WD-46(1), KOL. PAGE 5 CASE AND THEREFORE, ON BOTH THE GROUNDS THE IMPUGNE D ORDER PASSED BY THE APPELLATE AUTHORITY AS WELL AS THE ASSESSING AUTHORITY WAS SE T-ASIDE BY ITS ORDER DATED 9TH APRIL, 2009. AGGRIEVED BY THE SAID ORDER, THE REVEN UE FILED APPEAL BEFORE HIGH COURT. THE HON'BLE HIGH COURT FRAMED THE FOLLOWING QUESTIO N OF LAW IN THE SAID APPEAL VIZ., 1. WHETHER THE NOTICE ISSUED UNDER SECTION 271(1)(C ) IN THE PRINTED FORM WITHOUT SPECIFICALLY MENTIONING WHETHER THE PROCEED INGS ARE INITIATED ON THE GROUND OF CONCEALMENT OF INCOME OR ON ACCOUNT OF FU RNISHING OF INACCURATE PARTICULARS IS VALID AND LEGAL? 2. WHETHER THE PROCEEDINGS INITIATED BY THE ASSESSI NG AUTHORITY WAS LEGAL AND VALID? THE HON'BLE KARNATAKA HIGH COURT HELD IN THE NEGATI VE AND AGAINST THE REVENUE ON BOTH THE QUESTIONS. THEREFORE THE DECISI ON RENDERED BY THE ITAT MUMBAI IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE CORPORATION (SUPRA) IS OF NO ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US. 11. IN THE CASE OF M/S.MAHARAJ GARAGE & CO. VS. CIT DATED 22.8.2017 REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LEARNED DR, WHICH IS AN UNREPORTED DECISION AND A COPY OF THE SAME WAS NOT FURNISHED, THE SAME PROPOSITION AS WAS LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUP RA) APPEARS TO HAVE BEEN REITERATED, AS IS EVIDENT FROM THE EXTRACTS FURNISH ED IN THE WRITTEN NOTE FURNISHED BY THE LEARNED DR BEFORE US. 12. IN THE CASE OF TRISHUL ENTERPRISES ITA NO.384 & 385/MUM/2014, THE MUMBAI BENCH OF ITAT FOLLOWED THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUPRA). 13. IN THE CASE OF MAHESH M.GANDHI (SUPRA) THE MUMB AI ITAT THE ITAT HELD THAT THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE MANJUNATHA COTTON & GINNING (SUPRA) WILL NOT BE APPLICABLE TO THE FACTS OF THAT CASE BECAUSE THE AO IN THE ASSESSMENT ORDER WHILE INITIATING PENALTY PROCEEDIN GS HAS HELD THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME AND MERELY BECAUSE IN THE SHOW CAUSE NOTICE U/S.274 OF THE ACT, THERE IS NO MENTION WHETHER THE PROCEED INGS ARE FOR FURNISHING INACCURATE PARTICULARS OR CONCEALING PARTICULARS OF INCOME, TH AT WILL NOT VITIATE THE PENALTY PROCEEDINGS. IN THE PRESENT CASE THERE IS NO WHISPE R IN THE ORDER OF ASSESSMENT ON THIS ASPECT. WE HAVE POINTED OUT THIS ASPECT IN THE EARL IER PART OF THIS ORDER. HENCE, THIS DECISION WILL NOT BE OF ANY ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US. EVEN OTHERWISE THIS DECISION DOES NOT FOLLOW THE RATIO L AID DOWN BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNI NG (SUPRA) IN AS MUCH AS THE RATIO LAID DOWN IN THE SAID CASE WAS ONLY WITH REFE RENCE TO SHOW CAUSE NOTICE U/S.274 OF THE ACT. THE HON'BLE COURT DID NOT LAY DOWN A PR OPOSITION THAT THE DEFECT IN THE SHOW CAUSE NOTICE WILL STAND CURED IF THE INTENTION OF THE CHARGE U/S271(1)(C) IS DISCERNIBLE FROM A READING OF THE ASSESSMENT ORDER IN WHICH THE PENALTY WAS INITIATED. 14. FROM THE AFORESAID DISCUSSION IT CAN BE SEEN TH AT THE LINE OF REASONING OF THE HON'BLE BOMBAY HIGH COURT AND THE HON'BLE PATNA HIG H COURT IS THAT ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING TH E ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS T O WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING O F THE INACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUNAL BENCHES AT MUMBAI AND PATNA BEING ITA NO.2658-59/KOL/2018 ASSESSMENT YE AR 2014-15 SUBHASH KR. AGARWAL VS ITO WD-46(1), KOL. PAGE 6 SUBORDINATE TO THE HON'BLE BOMBAY HIGH COURT AND PA TNA HIGH COURT ARE BOUND TO FOLLOW THE AFORESAID VIEW. THE TRIBUNAL BENCHS AT B ANGALORE HAVE TO FOLLOW THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT. AS FA R AS BENCHES OF TRIBUNAL IN OTHER JURISDICTIONS ARE CONCERNED, THERE ARE TWO VIEWS ON THE ISSUE, ONE IN FAVOUR OF THE ASSESSEE RENDERED BY THE HON'BLE KARNATAKA HIGH COU RT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) AND OTHER OF THE HON'BLE B OMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA. IT IS SETTLED LEGAL POSITION THAT WH ERE TWO VIEWS ARE AVAILABLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO B E FOLLOWED. WE THEREFORE PREFER TO FOLLOW THE VIEW EXPRESSED BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA). 15. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE NO TICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIK E OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSI TION OF PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE ID. COUNSEL FOR THE ASSE SSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS T O BE ACCEPTED. WE THEREFORE HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE CANCELLED. 4. WE ADOPT THE ABOVE DETAILED DISCUSSIONS MUTATIS MUTANDIS TO CONCLUDE THAT THE SAME IS NOT LIABLE TO BE SUSTAINED. THE SAME STAND QUASHED ACCORDINGLY. 5. THESE TWO ASSESSEES APPEALS ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 20/02/2019 SD/- SD/- ( !) () !) (J.SUDHAKAR REDDY) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER *DKP-SR.PS * - 20/02/2019 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-SUBHASH KR. AGARWAL,1 KALITALA LANE SALK IA, HOWRAH-711106 2. ! /REVENUE-ITO WARD-46(1), 3, GOVERNMENT PLACE EAST- 700001 3. - . / CONCERNED CIT 4. . - / CIT (A) 5. / ))- , - /DR, ITAT, KOLKATA 6. 3 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ / -,