Dr Pramod Sureka, Kolkata V. D.C.I.T.Central Circle-XIII, Kolkata, Kolkata

ITA 2872/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4765 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2013
• Court: TRIBUNAL
• Department Lawyers: RAJAT KR KUREEL
• Assessee Lawyers: MANISH TIWARI F C A LD
• Keywords: Search and seizure; Principle of natural justice; Initiation of penalty proceedings
• Section: 143(3); 142(1); 153A

Judgement Text

1 ITA NO.2872/KOL/2013 DR.PRAMOD SUREKA IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, K OLKATA BEFORE : SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A NO. 2872/KOL/2013 A.Y 2009-10 DR. PRAMOD SUREKHA VS. D.C.I.T, C.C-XIII, KOLKA TA PAN: ALBPS1153N (APPELLANT) (RESPON DENT) FOR THE APPELLANT/ASSESSEE : SHRI MANISH TIW ARI, FCA, LD.AR FOR THE RESPONDENT/DEPARTMENT: SHRI RAJAT KR. KUREEL, JCIT, LD.DR DATE OF HEARING: 12-07-2016 DATE OF PRONOUNCEMENT: 03 -08- 2016 ORDER SHRI S.S. VISWANETHRA RAVI, JM THIS APPEAL OF THE ASESSEE ARISES OUT OF THE ORDER OF THE CIT(A)-CENTRAL-II, KOLKATA IN APPEAL NO. 182/CC-XIII/CIT(A)C-II//11-12 DATED 22-10-2013 FOR THE ASSESSMENT YEAR 2009-10 CONFIRMING THE ORDER OF PEN ALTY LEVIED U/S. 271(1) ( C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT). 2. THE ONLY GROUND IN THIS APPEAL IS AS TO WHETHER CIT-A JUSTIFIED IN CONFIRMING THE PENALTY LEVIED BY THE AO U/S 271(1)(C) IN THE C IRCUMSTANCES OF THE CASE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS A MEDICAL PRACTITIONER AND DERIVES HIS INCOME FROM SUCH PROF ESSION. A SEARCH AND SEIZURE WAS CONDUCTED ON THE PREMISES OF THE ASSESSEE ON 17-03 -2010 AND IN RESPONSE TO NOTICE 2 ITA NO.2872/KOL/2013 DR.PRAMOD SUREKA U/SEC 153A OF THE ACT FILED HIS RETURN DECLARING A TOTAL INCOME OF RS.32,25,850/- AND THE AO FOUND THAT THE ASSESSEE DECLARED HIS TOTAL I NCOME AT RS.7,25,850/-. UNDER SCRUTINY, NOTICES U/SEC 143(2) AND 142(1) WERE ISSU ED. DURING SUCH PROCEEDINGS, THE AO DETERMINED TOTAL INCOME AT RS.32,26,430/- TO TH AT EFFECT AN ASSESSMENT ORDER DT:19- 12-07 WAS PASSED U/SEC 143(3) OF THE ACT. THE ASSES SING OFFICER HAS INITIATED THE PENALTY PROCEEDINGS U/S. 271(1) (C) FOR WILLFUL CON CEALMENT AND FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND LEVIED PENALTY OF RS.8,49,750/- U/SEC 271(1)(C) OF THE ACT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEA L BEFORE THE LD.CIT(A). BEFORE THE LD. CIT(A) THE CONTENTION OF THE ASSESSEE WAS THAT DURING THE SEARCH AND UNDER SCRUTINY PROCEEDINGS AND HE OFFERED ADDITIONAL INCOME OF RS .25,00,000/- VOLUNTARILY AS INCOME AND URGED NO PENAL ACTION SHOULD BE INITIATED. THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER IN IMPOSING PENALTY U/S. 271(1)( C) OF THE ACT. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. DURING THE COURSE OF ARGUMENTS THE LD. AR FOR TH E ASSESSEE SUBMITTED THAT THE CASE UNDER CONSIDERATION IS COVERED BY THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COT TON AND GINNING FACTORY, 359 ITR 565 (KARN), AND ALSO BY THE ORDER OF THE TRIBUNAL I N THE CASE OF SUVAPRASANNA BHATTACHARYA VS. ACIT, CIR-55, KOLKATA DATED 06-11- 2015 WHICH CONSIDERED DECISION OF THE HONBLE KARNATAKA HIGH COURT SUPRA AND PASSED DETAILED ORDER THE SAID ISSUE. ON THE CONTRARY, THE LD. DR HAS RELIED ON THE ORDER S OF THE LOWER AUTHORITIES. 5. HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. THE QUESTION BEFORE US IS AS TO WHETHER THE PENALTY ORD ER PASSED BY THE AO AND CONFIRMED BY THE LD.CIT(A) IS FALLS FOR OUR CONSIDERATION IN PURSUANCE OF THE LAW LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT SUPRA . THE HONBLE KARNATAKA HIGH COURT IN THE CASE 3 ITA NO.2872/KOL/2013 DR.PRAMOD SUREKA OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACT ORY, 359 ITR 565 (KARN), HAS HELD THAT NOTICE U/S. 274 OF THE ACT SHOULD SPECIFI CALLY STATE AS TO WHETHER PENALTY IS BEING PROPOSED TO BE IMPOSED FOR CONCEALMENT OF PAR TICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. FURTHE R SUBMITTED BY THE LD.AR THE AFORESAID DECISION WILL SQUARELY APPLICABLE TO THE PRESENT CASE AND ALL THE ORDERS IMPOSING PENALTY HAVE TO BE HELD AS BAD IN LAW AND LIABLE TO BE QUASHED. 6. AS RIGHTLY POINTED OUT BY THE LD.AR, THE BENCH B KOLKATA TRIBUNAL IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS. ACIT B Y AN ORDER DATED 06-11-2015 CONSIDERED THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT SUPRA THE RELEVANT PORTION OF WHICH REPRODUCED HEREUNDER: 8. THE NEXT ARGUMENT THAT THE SHOW CAUSE NOTICE U/ S.274 OF THE ACT WHICH IS IN A PRINTED FORM DOES NOT STRIKE OUT AS T O WHETHER THE PENALTY IS SOUGHT TO BE LEVIED ON THE FOR FURNISHING INACCURA TE PARTICULARS OF INCOME OR CONCEALING PARTICULARS OF SUCH INCOME. ON THI S ASPECT WE FIND THAT IN THE SHOW CAUSE NOTICE U/S.274 OF THE ACT THE AO HAS NOT STRUCK OUT THE IRRELEVANT PART. IT IS THEREFORE NOT SPELT OUT AS T O WHETHER THE PENALTY PROCEEDINGS ARE SOUGHT TO BE LEVIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALING PARTICULARS OF SUCH INCOME. 8.1 THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 565 (KARN), HAS HELD THAT NOTICE U/S. 274 OF THE ACT SHOULD SPECIFICALLY STATE AS TO WHETHER PENALTY IS BEING PROPOSED TO BE IMPOSED FOR CONCEAL MENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE HONBLE HIGH COURT HAS FURTHER LAID DOWN THAT CERTA IN PRINTED FORM WHERE ALL THE GROUNDS GIVEN IN SECTION 271 ARE GIVE N WOULD NOT SATISFY THE REQUIREMENT OF LAW. THE COURT HAS ALSO HELD THA T INITIATING PENALTY PROCEEDINGS ON ONE LIMB AND FIND THE ASSESSEE GUILT Y IN ANOTHER LIMB IS BAD IN LAW. IT WAS SUBMITTED THAT IN THE PRESENT CA SE, THE AFORESAID DECISION WILL SQUARELY APPLY AND ALL THE ORDERS IMP OSING PENALTY HAVE TO BE HELD AS BAD IN LAW AND LIABLE TO BE QUASHED. 4 ITA NO.2872/KOL/2013 DR.PRAMOD SUREKA 8.2 THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) HAS LAID DOWN THE FOLLOWING PRINCIPLES TO BE FOLLOWED IN THE MATTER O F IMPOSING PENALTY U/S.271(1)(C) OF THE ACT. NOTICE UNDER SECTION 274 59. AS THE PROVISION STANDS, THE PENALTY PROCEEDING S CAN BE INITIATED ON VARIOUS GROUND SET OUT THEREIN. IF THE ORDER PASSED BY THE AUTHORITY CATEGORICALLY RECORDS A FINDING REGARDING THE EXIST ENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN PENALTY PROCEEDI NGS IS INITIATED, IN THE NOTICE TO BE ISSUED UNDER SECTION 274, THEY COU LD CONVENIENTLY REFER TO THE SAID ORDER WHICH CONTAINS THE SATISFACTION O F THE AUTHORITY 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 ARE IN THE NATURE O F CIVIL LIABILITY, IN FACT, IT IS PENAL IN NATURE. IN EITHER EVENT, THE P ERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED IN SECTION 271 SHOULD BE M ADE KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEND IMPOSING PENALTY O N HIM AS THE SECTION 274 MAKES IT CLEAR THAT ASSESSEE HAS A RIGHT TO CON TEST SUCH PROCEEDINGS AND SHOULD HAVE FULL OPPORTUNITY TO MEET THE CASE O F 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 MENTION ED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NOT REBUTTING THE INIT IAL PRESUMPTION IS SERIOUS IN NATURE AND HE HAD TO PAY PENALTY FROM 10 0% TO 300% OF THE TAX LIABILITY. AS THE SAID PROVISIONS HAVE TO BE HE LD TO BE STRICTLY CONSTRUED, NOTICE ISSUED UNDER SECTION 274 SHOULD S ATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE, PRINC IPLES OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NOTICE IS VAG UE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON TH E ASSESSEE. 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, TH AT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS 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. 5 ITA NO.2872/KOL/2013 DR.PRAMOD SUREKA BUT DRAWING UP PENALTY PROCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSEE GUILTY OF ANOTHER OFFENCE OR FINDING HIM G UILTY FOR EITHER THE ONE OR THE OTHER CANNOT BE SUSTAINED IN LAW. IT IS NEED LESS TO POINT OUT SATISFACTION OF THE EXISTENCE OF THE GROUNDS MENTIO NED IN SECTION 271(1)(C) WHEN IT IS A SINE QUA NON FOR INITIATION OR PROCEEDINGS, THE PENALTY PROCEEDINGS SHOULD BE CONFINED ONLY TO THOS E GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECIFICALLY STATED SO THAT THE ASSESSEE WOULD HAVE THE OPPORTUNITY TO MEET THOSE GROUNDS. AFTER, HE PLACES HIS VERSION AND TRIES TO SUBSTANTIATE HIS CLAIM, IF AT ALL, PEN ALTY IS TO BE IMPOSED, IT SHOULD BE IMPOSED ONLY ON THE GROUNDS ON WHICH HE I S CALLED UPON TO ANSWER. IT IS NOT OPEN TO THE AUTHORITY, AT THE TIM E OF IMPOSING PENALTY TO IMPOSE PENALTY ON THE GROUNDS OTHER THAN WHAT ASSES SEE WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENALTY PROCEEDINGS MAY BE VALID AND LEGAL, THE FINAL ORDER IMPOSING PENALTY W OULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAINED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROUND, THE PENALTY SHOULD ALS O BE IMPOSED ON THE SAME GROUND. WHERE THE BASIS OF THE INITIATION OF P ENALTY PROCEEDINGS IS NOT IDENTICAL WITH THE GROUND ON WHICH THE PENAL TY WAS IMPOSED, THE IMPOSITION OF PENALTY IS NOT VALID. THE VALIDITY OF THE ORDER OF PENALTY MUST BE DETERMINED WITH REFERENCE TO THE INFORMATIO N, FACTS AND MATERIALS IN THE HANDS OF THE AUTHORITY IMPOSING TH E 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 AC T TO INITIATE PENALTY PROCEEDINGS ONCE HE IS SATISFIED IN THE COURSE OF A NY PROCEEDINGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INA CCURATE PARTICULARS OF TOTAL INCOME UNDER CLAUSE (C). CONCEALMENT, FURNISH ING INACCURATE PARTICULARS OF INCOME ARE DIFFERENT. THUS THE ASSES SING OFFICER WHILE ISSUING NOTICE HAS TO COME TO THE CONCLUSION THAT W HETHER 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 PA I REPORTED IN 292 ITR 11 AT PAGE 19 HAS HELD THAT CONCEALMENT OF INCO ME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CO NNOTATIONS. THE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEERING REPORTED IN 122 ITR 306 AND THE DELHI HIGH COURT IN THE CASE OF VIRGO MARKETING REPORTED IN 171 TAXMAN 156, HAS HELD THAT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVI ED AND THE POSITION BEING 6 ITA NO.2872/KOL/2013 DR.PRAMOD SUREKA 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 PRO FORMA WITHO UT STRIKING OF THE RELEVANT CLAUSES WILL LEAD TO AN INFERENCE AS TO NO N-APPLICATION OF MIND. THE FINAL CONCLUSION OF THE HONBLE COURT WAS AS FO LLOWS:- 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 AUTH ORITY OR REVISIONAL AUTHORITY. F) EVEN IF THERE IS NO SPECIFIC FINDING REGARDING THE EXISTENCE OF THE CONDITIONS MENTIONED IN SECTION 271(1)(C), A T LEAST THE FACTS SET OUT IN EXPLANATION 1(A) & (B) IT SHOULD BE DISC ERNIBLE FROM THE SAID ORDER WHICH WOULD BY A LEGAL FICTION CONSTITUT E CONCEALMENT 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 CO NTAINED IN SECTION 1(B). H) THE SAID DEEMING PROVISIONS ARE NOT APPLICABLE TO THE ORDERS PASSED BY THE COMMISSIONER OF APPEALS AND TH E COMMISSIONER. I) THE IMPOSITION OF PENALTY IS NOT AUTOMATIC. 7 ITA NO.2872/KOL/2013 DR.PRAMOD SUREKA 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 TA X AND INTEREST THAT BY ITSELF WOULD NOT BE SUFFICIENT FOR THE AUTH ORITIES EITHER TO INITIATE PENALTY PROCEEDINGS OR IMPOSE PENALTY, UNL ESS IT IS DISCERNIBLE FROM THE ASSESSMENT ORDER THAT, IT IS O N ACCOUNT OF SUCH UNEARTHING OR ENQUIRY CONCLUDED BY AUTHORITIES IT HAS RESULTED IN PAYMENT OF SUCH TAX OR SUCH TAX LIABILI TY CAME TO BE ADMITTED AND IF NOT IT WOULD HAVE ESCAPED FROM TAX NET AND AS OPINED BY THE ASSESSING OFFICER IN THE ASSESSMENT O RDER. L) ONLY WHEN NO EXPLANATION IS OFFERED OR THE EXPL ANATION OFFERED IS FOUND TO BE FALSE OR WHEN THE ASSESSEE F AILS TO PROVE THAT THE EXPLANATION OFFERED IS NOT BONA FIDE, AN ORDER IMPOSING 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 FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOT AL INCOME 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 AMBIGUIT Y. O) IF THE ASSESSING OFFICER HAS NOT RECORDED ANY S ATISFACTION OR HAS NOT ISSUED ANY DIRECTION TO INITIATE PENALTY PR OCEEDINGS, IN APPEAL, IF THE APPELLATE AUTHORITY RECORDS SATISFAC TION, THEN THE PENALTY PROCEEDINGS HAVE TO BE INITIATED BY THE APP ELLATE AUTHORITY AND NOT THE ASSESSING AUTHORITY. P) NOTICE UNDER SECTION 274 OF THE ACT SHOULD SPEC IFICALLY STATE THE GROUNDS MENTIONED IN SECTION 271(1)(C), I.E., W HETHER 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 REQUIRE MENT 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. 8 ITA NO.2872/KOL/2013 DR.PRAMOD SUREKA 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 I NCORRECT PARTICULARS' WOULD NOT OPERATE AS RES JUDICATA IN T HE PENALTY PROCEEDINGS. IT IS OPEN TO THE ASSESSEE TO CONTEST THE SAID PROCEEDINGS ON MERITS. HOWEVER, THE VALIDITY OF THE ASSESSMENT OR REASSESSMENT IN PURSUANCE OF WHICH PENALTY IS LEVIE D, 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 D EFECTIVE AS IT DOES NOT SPELL OUT THE GROUNDS ON WHICH THE PENALTY IS SOUGH T 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. 7. IN THE PRESENT CASE, THE NOTICE DT:02-08-2011 IS SUED TO ASSESSEE BY THE AO U/SEC 274 R/W 271 OF THE ACT DOES NOT SHOW ON WHICH GROUND THE PENALTY IS SOUGHT TO BE IMPOSED, THEREFORE THE LAW LAID DOWN BY THE HON BLE HIGH COURT SUPRA AND FOLLOWED BY SUVAPRASANNA BHATTACHARYA VS. ACIT OF COORDINATE BENCH SUPRA AND IN VIEW OF THE SAME, WE HOLD THAT THE ORDER DT:15-11-2 011 LEVYING PENALTY IS NOT VALID. RESPECTFULLY FOLLOWING THE ORDER ABOVE, WE CANCEL T HE PENALTY OF RS.8,49,750/- LEVIED U/S. 271(1) ( C) BY THE ASSESSING OFFICER AND CONF IRMED BY THE CIT(A). 9 ITA NO.2872/KOL/2013 DR.PRAMOD SUREKA 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN OPEN COURT ON 03 /08/2016 COPY OF THE ORDER FORWARDED TO: 1.. THE APPELLANT/ASSESSEE : DR.PRAMOD SUREKA , A.E-572, SALT LAKE CITY, SECTOR-I, KOLKATA -700064 2 THE RESPONDENT/DEPARTMENT- D.C.I.T, CENTRAL CIRC LE-XIII 110 SHANTI PALLY, KOLKATA-700107 3 4. /THE CIT(A) THE CIT 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR ** PRADIP SPS SD/- P.M.JAGTAP ACCOUNTANT MEMBER SD/- S.S.VISWANETHRA RAVI J JUDICIAL MEMBER DATE 03 /08/2016