M/s. Gillette Diversified Operations Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 3238/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7625 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2001-2002
• Appeal Filed On: 21-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADEEP DINODIYA
• Assessee Lawyers: PARMITA BISHWAS
• Keywords: Principle of natural justice; Initiation of penalty proceedings; Capital expenditure
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO.4585/DEL/2015 ASSESSMENT YEAR: 2001-02 DCIT, CIRCLE-10(1), NEW DELHI. V. GELLETTE DIVERSIFIED OPERATIONS PVT. LTD., 34 OKHLA, INDL. ESTATE. TAN/PAN: AAACG 2469C (APPELLANT) (RESPONDENT) I.T.A. NO.3238/DEL/2015 ASSESSMENT YEAR: 2001-02 GELLETTE DIVERSIFIED OPERATIONS PVT. LTD., 34 OKHLA, INDL. ESTATE. V. ACIT, CIRCLE-12(1), NEW DELHI. TAN/PAN: AAACG 2469C (APPELLANT) (RESPONDENT) APPELLANT BY: SMT. PARMITA BISHWAS, CIT-DR RESPONDENT BY: SHRI PRADEEP DINODIYA, ADV. DATE OF HEARING: 30 01 2019 DATE OF PRONOUNCEMENT: 25 04 2019 O R D E R PER AMIT SHUKLA, JM: THE AFORESAID CROSS APPEALS HAVE BEEN FILED BY THE REVENUE AS WELL AS BY THE ASSESSEE AGAINST THE IMPU GNED ORDER DATED 06.04.2015, PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-XV, NEW DELHI IN RELATION TO P ENALTY PROCEEDINGS U/S.271(1)(C) FOR THE ASSESSMENT YEAR 2 001-02. THE REVENUE IS AGGRIEVED BY DELETION OF PENALTY ON ACCOUNT OF I.T.A. NO.4585 & 3238/DEL/2015 2 ADDITION MADE UNDER THE HEAD TECHNICAL ADVISORY FE ES TO THE EXTENT OF RS.6,57,45,000/- AND DISALLOWANCE OF EXPE NDITURE OF RS.6,57,95,000/-; WHEREAS THE ASSESSEE IS IN APPEAL FOR CONFIRMING THE PENALTY BY LD. CIT(A) ON ACCOUNT OF DISALLOWANCE OF EXCISE DUTY PAID OF RS.70,00,000/- AND DISALLOWANCE OUT OF TECHNICAL FEES PAID AMOUNTING T O RS.7 CRORE. 2. THE BRIEF FACTS QUA THE ISSUE OF LEVY OF PENALTY IN THE QUANTUM PROCEEDINGS IS THAT, THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF TECHNICAL ADVISORY SERVICES FOR S UM OF RS.13,57,45,000/-; AND DISALLOWANCE OF EXCISE DUTY OF RS.70 LAC. IN SO FAR AS DISALLOWANCE OF TECHNICAL ADVISOR Y FEES IS CONCERNED, THE ASSESSING OFFICER NOTED THAT ASSESSE E HAD PAID SUM OF RS.13,57,45,000/- AS A TECHNICAL ADVISORY FE ES TO M/S. SHERVANI INDUSTRIAL SYNDICATE, WHEREAS NO SUCH FE E WAS PAID IN THE LAST YEAR. IN RESPONSE TO THE SHOW CAUSE NOT ICE, THE ASSESSEE SUBMITTED THAT THE SAME WAS PAID ON ACCOUN T OF PROVIDING TECHNICAL SUPPORT TO THE ASSESSEE COMPANY IN THE FIELD OF BATTERY MANUFACTURING AND SUCH PAYMENT WAS MADE IN TERMS OF AGREEMENT ENTERED BY THE ASSESSEE WITH THE SAID COMPANY. THE ASSESSEE COMPANY HAD ACQUIRED A ZINC B ATTERY MANUFACTURING FACILITY AT MYSORE IN THE PREVIOUS YE ARS AND M/S. SHERVANI INDUSTRIAL SYNDICATE LTD. WAS IN THE FIELD OF MANUFACTURE OF BATTERIES AND HAD VALUABLE EXPERIENC E IN THIS FIELD. IT WAS FOR THIS REASON THE SAID COMPANY WAS HIRED TO PROVIDE TECHNICAL SPECIALIZED ADVISORY SERVICES ON A CONTINUOUS BASIS TO PRODUCE THE PRODUCTS AT THE EXI STING I.T.A. NO.4585 & 3238/DEL/2015 3 MANUFACTURING FACILITIES OF THE ASSESSEE-COMPANY. T HE ASSESSING OFFICER REQUIRED THE ASSESSEE TO SUBMIT W HAT TYPES OF SERVICES WERE RENDERED BY THE SAID COMPANY TO TH E ASSESSEE JUSTIFYING SUCH A HUGE PAYMENT AND ALSO TO SUBMIT TH E EVIDENCE OF THE SERVICE BEING RENDERED. IN RESPONSE , THE ASSESSEE FILED THE RELEVANT AGREEMENTS AND STATED T HAT THE EXPENDITURE RESULTED IN IMPROVEMENT OF TECHNOLOGY O F BATTERY PRODUCTION AND THE RESULTS WERE EVIDENT FROM THE AU DITED ACCOUNT. IT WAS FURTHER SUBMITTED THAT ASSESSEE HAD NO EXPERTISE IN THE FIELD AND THE SAID ZINC MANUFACTUR ING FACILITY HAD BEEN ACQUIRED FROM M/S. SHERVANI INDUSTRIAL SYN DICATE LTD. HOWEVER, THE ASSESSING OFFICER HELD THAT NO EV IDENCE OF ANY SERVICES WAS GIVEN BY THE ASSESSEE AND THE PAYM ENTS MADE ARE MORE THAN RS.1 CRORE PER MONTH AND NO EVID ENCE OF ANY TRAVEL BY M/S. SHERVANI INDUSTRIAL SYNDICATE LT D. PERSONNEL TO THE FACTORY, ADVICE GIVEN, EVALUATION DONE, TECHNOLOGY PROVIDED, ETC. WAS SUBMITTED. ACCORDINGL Y, HE MADE THE DISALLOWANCE. 3. AS REGARDS DISALLOWANCE OF PAYMENT OF EXCISE DUT Y OF RS.70 LACS IS CONCERNED, THE ASSESSEE HAS CLAIMED D EDUCTION OF THE SAID AMOUNT U/S.43B AND STATED THAT THIS AMO UNT WAS PAID AS EXCISE DUTY UNDER PROTEST ON THE DEMAND OF EXCISE AUTHORITIES FROM M/S. RIALTO ENTERPRISES PVT. LTD., WHICH COMPANY USED TO MANUFACTURE THE GOODS FOR THE ASSES SEE COMPANY WHO MARKETS THEM. THIS AMOUNT WAS NOT CLAIM ED AS EXPENDITURE IN THE BOOKS AND WAS SHOWN AS DEPOSIT, LATER ON CLAIMED AS ALLOWABLE U/S.43B AND IN SUPPORT, COPY O F CHALLAN I.T.A. NO.4585 & 3238/DEL/2015 4 AND LETTER FROM M/S. RIALTO ENTERPRISES WAS ALSO EN CLOSED. THE LD. ASSESSING OFFICER HELD SUCH A STATUTORY LIA BILITY CAN ONLY BE ALLOWED IF IT IS A LIABILITY OF THE ASSESSE E AND INCURRED BY THE ASSESSEE. THE DEMAND OF EXCISE DUTY HAS BEEN RAISED IN THE CASE OF M/S. RIALTO ENTERPRISES AND AS PER T HE AGREEMENT, IT WAS TO BE BORNE BY RIALTO ENTERPRISES ONLY. UNDER THESE CIRCUMSTANCES, ASSESSEE COULD NOT HAVE TREATED IT AS ITS LIABILITY AND ACCORDINGLY DISALLOWANCE WAS M ADE. 4. IN THE QUANTUM PROCEEDINGS, THE TRIBUNAL HAD GIV EN PART RELIEF, CONFIRMING THE DISALLOWANCE OF RS.7 CRORE A S WAS DONE BY THE LD. CIT (A) AND BALANCE AMOUNT OF RS.5.65 CR ORE WAS THOUGH TREATED AS CAPITAL EXPENDITURE BUT DEPRECIAT ION WAS ALLOWED. IN SO FAR AS DISALLOWANCE OF RS.70 LACS IS CONCERNED, THE SAME WAS CONFIRMED. 5. NOW PENALTY HAS BEEN LEVIED HAS BEEN LEVIED ON T HE QUANTUM OF DISALLOWANCE UPHELD BY THE FIRST APPELLA TE AUTHORITY AND BEFORE PASSING OF THE TRIBUNAL ORDER. THUS, THE ASSESSING OFFICER HAD LEVIED A PENALTY ON ENTIRE DI SALLOWANCES MADE FOR RS.5,65,00,000/-. LD. CIT(A) HAS CONFIRMED THE PENALTY ON AMOUNT OF ADDITION SUSTAINED BY THE TRIB UNAL FOR RS.7 CRORE AND ON ACCOUNT OF DISALLOWANCE U/S.43B O F RS.70 LACS. 6. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE, MR. PRADEEP DINODIYA, RAISING A LEGAL ISSUE SUBMITTED THAT, HER E IN THIS CASE, IN THE SHOW CAUSE NOTICE ISSUED U/S.274 R.W.S . 271 DATED 29.03.2004, WHICH HAS BEEN SENT IN A PRINTED STANDARD I.T.A. NO.4585 & 3238/DEL/2015 5 FORMAT, ASSESSING OFFICER HAS NOT SPECIFIED EXACT N ATURE OF DEFAULT FOR THE PURPOSES OF INITIATION AND LEVY OF PENALTY UNDER SECTION 271(1)(C). IN SUPPORT, HE HAS FILED THE COP Y OF NOTICES BEFORE US. HE FURTHER SUBMITTED THAT IN ANOTHER SHO W-CAUSE NOTICE DATED 08.02.2012, ONCE AGAIN NOTICE OF THE A SSESSING OFFICER DID NOT SPECIFY THE EXACT DEFAULT, AS TO WH ETHER IT IS FOR THE CONCEALMENT OF INCOME OR FOR FURNISHING OF INAC CURATE PARTICULARS OF INCOME. THERE WAS NO CLEAR CHARGE OF PENALTY IN THE NOTICE. THUS, ASSESSING OFFICER HIMSELF WAS NOT SURE OF THE EXACT DEFAULT COMMITTED BY THE ASSESSEE. IN SUPPORT OF HIS CONTENTION, HE STRONGLY RELIED UPON THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY, REPORTED IN (2013) 359 ITR 565 (KAR.) AND ALSO REFERRED TO THE JUDGMENT OF HON'BLE SUPRE ME COURT IN THE CASE OF VEERBHADRAPPASANGAPPA & CO. (TS- 381-SC-216), WHEREIN REVENUES SLP HAS BEEN DISMISSED AGAINST THE KARANATAKA HIGH COURT JUDGMENT. HE ALSO REFERRED TO JUDGMENT OF HON'BLE GUJARAT HIGH COURT I N THE CASE OF MANU ENGINEERING REPORTED IN 122 ITR 306 (GUJ.) AND HON'BLE DELHI HIGH COURT IN THE CASE OF VIRGO MARKETING REPORTED IN 171 TAXMAN 156 (DEL) . HE ALSO RELIED UPON VARIOUS TRIBUNAL DECISIONS OF THE CO-ORDINATE BENCH ES ON SIMILAR ISSUE FOLLOWING THE AFORESAID JUDGMENTS. 7. ON THE OTHER HAND, LEARNED DEPARTMENT REPRESENTA TIVE, SUBMITTED THAT HERE IN THIS CASE, ASSESSING OFFICER IN THE ASSESSMENT ORDER ITSELF HAS SPECIFICALLY MENTIONED THAT PENALTY U/S.271(1)(C) R.W.S. EXPLANATION-I IS INITI ATED FOR I.T.A. NO.4585 & 3238/DEL/2015 6 FURNISHING OF INACCURATE PARTICULARS OF INCOME IN R ESPECT OF ADDITIONS/DISALLOWANCES MADE. EVEN IN THE PENALTY O RDER ALSO, THE PENALTY HAS BEEN LEVIED ON ACCOUNT OF FUR NISHING OF INACCURATE PARTICULARS OF INCOME. THUS, CHARGE WAS SPECIFIC RIGHT FROM THE STAGE OF ASSESSMENT PROCEEDINGS TO T HE PASSING OF THE PENALTY ORDER. EVEN THOUGH ASSESSING OFFICER HAS NOT STRIKE OUT THE RELEVANT CHARGE IN THE PRINTED FORMA T OF THE SHOW CAUSE NOTICE ISSUED U/S.274 R.W.S. 271, BUT TH AT ITSELF WILL NOT INVALIDATE THE PENALTY PROCEEDINGS. OTHERW ISE ALSO, IN THE QUANTUM PROCEEDINGS, THE ADDITIONS HAVE BEEN CO NFIRMED BY THE TRIBUNAL ON WHICH PENALTY HAS BEEN LEVIED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS QUA THE LEGAL ISSUE THAT IMPUGNED PENALTY PROCEEDINGS ARE NOT VALID ON THE GROUND THAT, ASSESSING OFFICER WHILE ISSUING THE SH OW CAUSE NOTICE, HAD NOT SPECIFIED THE CHARGE AS TO UNDER WH ICH LIMB, HE IS PROPOSING TO LEVY THE PENALTY U/S 271(1)(C). FROM THE PERUSAL OF THE ASSESSMENT ORDER, IT IS SEEN THAT LD . ASSESSING OFFICER HAS THOUGH SPECIFIED THE CHARGE THAT HE IS INITIATING THE PENALTY PROCEEDINGS U/S. 271(1)(C) ON ACCOUNT O F FURNISHING OF INACCURATE PARTICULARS OF INCOME, HOW EVER, AT THE TIME OF ISSUANCE OF SHOW CAUSE NOTICE U/S.274, NO SUCH CHARGE HAS BEEN SPECIFIED. THE NOTICES HAVE BEEN SE NT ON A PRINTED FORMAT WHEREIN HE HAS NOT STRIKE DOWN OR ME NTIONED AS TO UNDER WHICH LIMB HE IS PROPOSING TO LEVY THE PENALTY. THE SECTION 271(1)(C) STIPULATES TWO LIMBS OF CHARG ES IN WHICH PENALTY CAN BE LEVIED, ONE, WHERE ANY PERSON HAS CO NCEALED THE PARTICULARS OF HIS INCOME; OR SECOND, HE HAS FU RNISHED I.T.A. NO.4585 & 3238/DEL/2015 7 INACCURATE PARTICULARS OF SUCH INCOME. 9. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) HAS HELD THAT A PERSON WHO IS ACCUSED OF CONDITIONS MENTIONE D IN SECTION 271 SHOULD BE MADE KNOWN ABOUT THE GROUNDS ON WHICH THE DEPARTMENT IS IMPOSING PENALTY, AS SECTIO N 274 MAKES IT CLEAR THAT THE ASSESSEE HAS RIGHT TO CONTE ST SUCH PROCEEDINGS AND SHOULD HAVE FULL OPPORTUNITY TO MEE T THE CASE OF THE DEPARTMENT AND SHOW THAT CONDITIONS STI PULATES IN SECTION 271(1)(C) DID NOT EXIST AND IS NOT LIABL E TO PAY THE PENALTY. THEIR LORDSHIPS HAVE FURTHER HELD THAT THE PRACTICE OF THE DEPARTMENT SENDING A PRINTED FORM WHERE ALL THE GROUNDS MENTIONED IN SECTION 271 WOULD NOT SATISFY THE REQU IREMENT OF THE LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NO T REBUTTING THE INITIAL PRESUMPTION IS SERIOUS IN NAT URE AND HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILI TY. THEREFORE, THE SAID PROVISION HAS TO BE STRICTLY CO NSTRUED AND NOTICE ISSUED U/S. 274 SHOULD SATISFY THE GROUNDS W HICH THE PERSON HAS TO MEET SPECIFICALLY. OTHERWISE, PRINCIP LE OF NATURE JUSTICE IS OFFENDED IF A SHOW CAUSE NOTICE IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY CAN BE IMPOSE D ON THE ASSESSEE. THE RELEVANT OBSERVATION AND LAW SPECIFIE D BY THEIR LORDSHIPS IN THIS REGARD READS AS UNDER: 59. AS THE PROVISION STANDS, THE PENALTY PROCEEDI NGS CAN BE INITIATED ON VARIOUS GROUND SET OUT THEREIN. IF THE ORDER PASSED BY THE AUTHORITY CATEGORICALLY RECORDS A FINDING REGAR DING THE EXISTENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN PENA LTY I.T.A. NO.4585 & 3238/DEL/2015 8 PROCEEDINGS IS INITIATED, IN THE NOTICE TO BE ISSUE D UNDER SECTION 274, THEY COULD CONVENIENTLY REFER TO THE SAID ORDE R WHICH CONTAINS THE SATISFACTION OF THE AUTHORITY WHICH HAS PASSED THE ORDER. HOWEVER, IF THE EXISTENCE OF THE CONDITIONS COULD N OT BE DISCERNED FROM THE SAID ORDER AND IF IT IS A CASE OF RELYING ON DEEMING PROVISION CONTAINED IN EXPLANATION-1 OR IN EXPLANAT ION-L(B), THEN THOUGH PENALTY PROCEEDINGS ARE IN THE NATURE OF CIV IL 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 B E MADE KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEND IMPOSING PEN ALTY ON HIM AS THE SECTION 274 MAKES IT CLEAR THAT ASSESSEE HAS A RIGHT TO CONTEST SUCH PROCEEDINGS AND SHOULD HAVE FULL OPPOR TUNITY TO MEET THE CASE OF THE DEPARTMENT AND SHOW THAT THE CONDIT IONS STIPULATED IN SECTION 271(L)(C) DO NOT EXIST AS SUCH HE IS NOT LIABLE TO PAY PENALTY. THE PRACTICE OF THE DEPARTMENT SENDING A P RINTED FARM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE M ENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW WHEN THE CONSE QUENCES OF THE ASSESSEE NOT REBUTTING THE INITIAL PRESUMPTION IS S ERIOUS 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 STRICT LY CONSTRUED, NOTICE ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLES OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NOTICE IS VAGUE. ON T HE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASS ESSEE. 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, T HAT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. NO DOUBT, THE FACTS OF SOME CASES MAY AT TRACT BOTH THE OFFENCES AND IN SOME CASES THERE MAY BE OVERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES THE INITIATION OF THE PE NALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE OFFENCES. BUT DRAWING UP PENALTY PROCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSE E GUILTY OF ANOTHER OFFENCE OR FINDING HIM GUILTY FOR EITHER TH E ONE OR THE OTHER I.T.A. NO.4585 & 3238/DEL/2015 9 CANNOT BE SUSTAINED IN LAW. IT IS NEEDLESS TO POINT OUT SATISFACTION OF THE EXISTENCE OF THE GROUNDS MENTIONED IN SECTION 2 71(L)(C) WHEN IT IS A SINE QUA NON FOR INITIATION OR PROCEEDINGS, TH E PENALTY PROCEEDINGS SHOULD BE CONFINED ONLY TO THOSE GROUND S 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, PENALTY IS TO BE IMPOSED, IT SHOULD BE IMPOSED ONLY ON THE GROUNDS O N WHICH HE IS CALLED UPON TO ANSWER. IT IS NOT OPEN TO THE AUTHOR ITY, AT THE TIME OF IMPOSING PENALTY TO IMPOSE PENALTY ON THE GROUNDS O THER THAN WHAT ASSESSEE WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENALTY PROCEEDINGS MAY BE VALID AND LEGAL, THE FINAL ORDER IMPOSING PENALTY WOULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAINED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROUND, THE PENALTY SHOULD ALSO BE IMPOSED ON THE S AME GROUND. WHERE THE BASIS OF THE INITIATION OF PENALTY PROCEE DINGS IS NOT IDENTICAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, THE IMPOSITION OF PENALTY IS NOT VALID. THE VALIDITY OF THE ORDER OF PENALTY MUST BE DETERMINED WITH REFERENCE TO THE IN FORMATION, FACTS AND MATERIALS IN THE HANDS OF THE AUTHORITY IMPOSIN G THE PENALTY AT THE TIME THE ORDER WAS PASSED AND FURTHER DISCOVERY OF FACTS SUBSEQUENT TO THE IMPOSITION OF PENALTY CANNOT VALI DATE THE ORDER OF PENALTY WHICH, WHEN PASSED, WAS NOT SUSTAINABLE. 61. THE ASSESSING OFFICER IS EMPOWERED UNDER THE A CT TO INITIATE PENALTY PROCEEDINGS ONCE HE IS SATISFIED IN THE COU RSE OF ANY PROCEEDINGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF TOTAL INCOME UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICULARS OF I NCOME ARE DIFFERENT. THUS THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS TO COME TO THE CONCLUSION THAT WHETHER 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 PAI REPORTED IN 292 ITR 11 AT PAGE I.T.A. NO.4585 & 3238/DEL/2015 10 19 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHI NG INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THE GUJRAT HIGH COURT IN THE CASE OF MANU ENGINEERING REPORTED IN 1 22 ITR 306 AND THE DELHI HIGH COURT IN THE CASE OF VIRGO MARKE TING REPORTED IN 171 TAXMN 156, HAS HELD THAT LEVY OF PE NALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BEING UNCLEAR PENALTY IS NOT SUSTAINABLE. THEREFORE, WHEN THE ASSESSING OFFICER 10. THEIR LORDSHIPS WHILE COMING TO THE AFORESAID CONCLUSION HAVE ALSO REFERRED TO THE JUDGMENT OF HO N'BLE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEERING (SUPRA); AND HON'BLE DELHI HIGH COURT IN THE CASE OF VIRGO MARKETING (SUPRA) . THE AFORESAID PRINCIPLE LAID DOWN BY THE HON'BLE HIGH COURT HAS ALSO BEEN FOLLOWED BY THIS CO-ORDINATE BE NCH IN VARIOUS CASES. AS POINTED OUT BY LEARNED COUNSEL, H ON'BLE SUPREME COURT IN THE CASE OF VEERBHADRAPASANGAPPA & CO. (SUPRA) HAVE DISMISSED THE REVENUES SLP AGAINST KARNATAKA HIGH COURT JUDGMENT LAYING DOWN THE LAW ON PENALTY, WHEREIN IT WAS HELD THAT NOTICE U/S.274 ITSELF SPECIFICALLY STATE THAT GROUND FOR INITIATION OF PENALTY PROCEEDINGS WHETHE R FOR CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTI CULARS OF INCOME. MERE SENDING OF PRINTED FORM WITH ALL THE G ROUNDS MENTIONED IS NOT SUFFICIENT COMPLIANCE OF LAW. THE AFORESAID PRINCIPLE AND RATIO LAID DOWN BY THE HON'BLE KARNAT AKA HIGH COURT WOULD ALSO APPLY IN THE PRESENT CASE, BECAUSE HERE IN THIS CASE THE LD. ASSESSING OFFICER WHILE ISSUING A SHOW CAUSE NOTICE U/S.274 R.W.S. 271 IN PRINTED FORMAT HAS NOT SPECIFIED THE GROUNDS AS TO UNDER WHICH LIMB HE IS PROPOSING TO INITIATE I.T.A. NO.4585 & 3238/DEL/2015 11 AND LEVY A PENALTY U/S. 271(1)(C). THUS, RESPECTFUL LY FOLLOWING THE AFORESAID JUDGMENTS, WE HOLD THAT IMPUGNED PENAL TY LEVIED BY THE ASSESSING OFFICER IS NOT VALID AND SA ME IS NOT SUSTAINABLE. ON THIS GROUND THE ENTIRE PENALTY IS D ELETED. 11. IN THE RESULT, IN VIEW OF THE AFORESAID FINDING , THE REVENUES APPEAL IS TREATED AS DISMISSED AND ASSESS EES IS APPEAL AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH APRIL, 2019. SD/- SD/- [G.D. AGRAWAL] [AMIT SHUKLA] VICE PRESIDENT JUDICIAL MEMBER DATED: 25 TH APRIL, 2019 PKK: