Rama Krishna Yadav, Nagaon V. Income Tax Officer, Ward-2, Nagaon

ITA 325/GTY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2076 (ITAT-GUWAHATI)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 30-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDIP SENGUPTA
• Keywords: Invalid notice; Opportunity of being heard; Principle of natural justice; Question of law
• Section: 271(1)(c); 250; 69

Judgement Text

1 ITA NOS.325 & 326/GAU/2018 RAM KRISHNA YADAV., AYS 2012-13 & 2013-14 IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH, E COURT AT KOLKATA ( ) . . , . [ , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, AM] I.T.A. NOS. 325 & 326/GAU/2018 ASSESSMENT YEARS: 2012-13 & 2013-14 RAM KRISHNA YADAV, NAGAON (PAN: ABAPY7239C) VS. INCOME-TAX OFFICER, WARD-2, NAGAON APPELLANT RESPONDENT DATE OF HEARING 14.05.2019 DATE OF PRONOUNCEMENT 19.06.2019 FOR THE APPELLANT SHRI RAHUL JAIN, FCA FOR THE RESPONDENT SHRI SANDIP SENGUPTA, JCIT, DR ORDER PER A.T.VARKEY, JM BOTH THESE APPEALS OF ASSESSEE ARE AGAINST THE SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS), GUWAHATI-1, GUWAHATI DATED 27.08.2018 FOR AY 2012-13 AND 2013- 14 RESPECTIVELY IN CONFIRMING THE PENALTY IMPOSED BY THE AO U/S. 271(1)(C) OF THE INCOME- TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). SINCE GROUNDS ARE COMMON AND FACTS ARE IDENTICAL, WE DISPOSE OF BOTH THESE APPEALS BY THE CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE BY TAKING THE APPEAL FOR AY 2012-13 AS THE LEAD CASE AND THE RESULT OF WHICH WILL BE APPLIED FOR OTHER YEAR ALSO. 2. AT THE OUTSET ITSELF, THE LEARNED AR DREW OUR ATTENTION TO THE DEFECTIVE NOTICE DATED 29.04.2016 WHEREIN THE SHOW CAUSE NOTICE REVEALS THAT THE AO HAS NOT STRICKEN DOWN EITHER OF THE LIMBS THAT IS FOR WHICH SPECIFIC FAULT THE ASSESSEE IS BEING PROCEEDED AGAINST FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT I.E. TO HAVE CONCEALED PARTICULARS OF INCOME OR HAVING FURNISHED INACCURATE PARTICULARS OF INCOME. ASSAILING THE DECISION OF THE LD. CIT(A) IN CONFIRMING PENALTY, THE LD. AR CITED SEVERAL DECISIONS INCLUDING THE DECISION OF THE HONBLE CALCUTTA HIGH COURT & HONBLE SUPREME COURT (WHICH WE WILL DISCUSS INFRA WHILE 2 ITA NOS.325 & 326/GAU/2018 RAM KRISHNA YADAV., AYS 2012-13 & 2013-14 ADJUDICATING THE ISSUE) & PLEADED THAT THE PENALTY BE CANCELLED FOR DEFECT OF SHOW-CAUSE NOTICE. 3. HOWEVER, LEARNED DR DREW OUR ATTENTION TO THE DECISION OF HONBLE TAMIL NADU HIGH COURT IN SUNDARAM FINANCE LTD. VS. ACIT (2018) 93 TAXMAN.COM 250 (CHENNAI) DATED 23.04.2018 WHEREIN THE HONBLE HIGH COURT DID NOT ACCEPT THE ASSESSEES CHALLENGE IN RESPECT OF SIMILAR INVALID NOTICE AND AFTER TAKING INTO CONSIDERATION THE HONBLE KARNATAKA HIGH COURT ORDER IN CIT VS. SSAS EMERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WAS PLEASED TO UPHOLD THE PENALTY U/S. 271(1)(C) OF THE ACT WHICH ORDER HAS BEEN CONFIRMED BY THE HONBLE SUPREME COURT VIDE ORDER DATED 26.10.2018 REPORTED IN 99 TAXMAN.COM 152 (SC) AND CERTAIN OTHER DECISIONS WHICH WE WILL DISCUSS INFRA. HE, THEREFORE, URGED BEFORE THE BENCH TO CONFIRM THE ACTION OF LD. CIT(A) AND DISMISS THE APPEAL OF THE ASSESSEE. 4. HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE SHOW-CAUSE NOTICE DT. 29.04.2016 ISSUED BY AO BEFORE LEVYING PENALTY U/S 271 (1)(C) OF THE ACT. IN ORDER TO BUTTRESS HIS CONTENTIONS THAT THE SHOW-CAUSE NOTICE DT.29.04.2016 ISSUED PRIOR TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT WAS DEFECTIVE, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN THE HONBLE KARNATAKA HIGH COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTON 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 WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD. COUNSEL FURTHER BROUGHT TO OUR NOTICE THAT AS AGAINST THE DECISION OF THE HONBLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEAL IN SLP IN CC NO.11485 OF 2016 AND THE HONBLE SUPREME COURT BY ITS ORDER DATED 05.08.2016 DISMISSED THE SLP PREFERRED BY THE DEPARTMENT. THE LD. COUNSEL ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 DATED 05.01.2017 WHEREIN THE HONBLE BOMBAY HIGH COURT FOLLOWING THE DECISION OF THE HONBLE 3 ITA NOS.325 & 326/GAU/2018 RAM KRISHNA YADAV., AYS 2012-13 & 2013-14 KARNATAKA HIGH 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 NOTICE WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT BE SUSTAINED. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS ACIT IN ITA NO.1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS BEEN FOLLOWED BY THE TRIBUNAL. OUR ATTENTION WAS ALSO DRAWN TO A RECENT JUDGMENT OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF PR. CIT-19 VS. DR. MURARI MOHAN KOLEY, ITAT NO. 306 OF 2017, GA NO.2968 OF 2017 DATED 18.07.2018 WHEREIN ALSO THE HONBLE HIGH COURT HAS UPHELD THE ABOVE PROPOSITION OF LAW AND DISMISSED THE APPEAL OF THE REVENUE. 5. WE NOTE THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF JEETMAL CHORARIA VS. ACIT, ITA NO. 956/KOL/2016 FOR AY 2010-11 DATED 01.12.2017, WHEREIN THE TRIBUNAL HAS TAKEN NOTE OF ALL THE CASE LAWS OF LD. AR AND LD. DR AND ADJUDICATED THE ISSUE AS UNDER: 7. THE LEARNED DR SUBMITTED THAT THE HONBLE CALCUTTA 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 SATISFACTION 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 QUESTION OF RECORDING SATISFACTION AND NOT IN THE CONTEXT OF SPECIFIC CHARGE IN THE MANDATORY SHOW CAUSE NOTICE U/S.274 OF THE ACT. THEREFORE REFERENCE TO THIS DECISION, IN OUR VIEW IS NOT OF ANY HELP TO THE PLEA OF THE REVENUE BEFORE US. 8. THE LEARNED DR RELIED ON THREE DECISIONS OF MUMBAI ITAT VIZ., (I) DHANRAJ MILLS PVT. LTD. VS. ACIT ITA NO.3830 & 3833/MUM/2009 DATED 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. ACIT ITA NO.2976/MUM/2016 DATED 27.2.2017. RELIANCE WAS PLACED ON TWO DECISIONS OF THE HONBLE BOMBAY HIGH COURT VIZ., (I) CIT VS. KAUSHALYA 216 ITR 660(BOM) AND (II) M/S.MAHARAJ GARAGE & CO. VS. CIT DATED 22.8.2017. THIS DECISION WAS REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LEARNED DR. THIS IS AN UNREPORTED DECISION AND A COPY OF THE SAME WAS NOT FURNISHED. HOWEVER A GIST OF THE RATIO 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 HONBLE BOMBAY HIGH COURT HELD THAT SECTION 274 OR ANY OTHER PROVISION IN THE ACT OR THE RULES, DOES NOT EITHER MANDATE THE GIVING OF NOTICE OR ITS ISSUANCE IN A PARTICULAR FORM. PENALTY PROCEEDINGS ARE QUASI-CRIMINAL IN NATURE. SECTION 274 CONTAINS THE PRINCIPLE OF NATURAL JUSTICE OF THE ASSESSEE BEING HEARD BEFORE LEVYING PENALTY. RULES OF NATURAL JUSTICE CANNOT BE IMPRISONED IN ANY STRAIGHT-JACKET FORMULA. FOR SUSTAINING A COMPLAINT OF FAILURE OF THE PRINCIPLES OF NATURAL JUSTICE ON THE GROUND OF ABSENCE OF OPPORTUNITY, 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 4 ITA NOS.325 & 326/GAU/2018 RAM KRISHNA YADAV., AYS 2012-13 & 2013-14 TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING OF 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 HONBLE BOMBAY HIGH COURT IN THE CASE OF KAUSHALYA (SUPRA) AND CHOSE NOT TO FOLLOW DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA). RELIANCE WAS ALSO PLACED BY THE ITAT MUMBAI IN THIS DECISION ON THE DECISION OF HONBLE 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 ASSESSEE 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 CORPORATION (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 PARTIES BEFORE THE GROUP OF ASSESSEES BEFORE THE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA 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 TRIBUNAL HELD THAT ON PERUSAL OF THE NOTICE ISSUED UNDER SECTION 271(1)(C) OF THE ACT, IT IS CLEAR THAT IT IS A STANDARD PROFORMA USED BY THE ASSESSING AUTHORITY. BEFORE ISSUING THE NOTICE THE INAPPROPRIATE WORDS AND PARAGRAPHS WERE NEITHER STRUCK OFF NOR DELETED. 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 DETAILS. THE NOTICE IS NOT IN COMPLIANCE WITH THE REQUIREMENT OF THE PARTICULAR SECTION AND THEREFORE IT IS A VAGUE NOTICE, WHICH IS ATTRIBUTABLE TO A PATENT NON APPLICATION OF MIND ON THE PART OF THE ASSESSING AUTHORITY. FURTHER, IT HELD THAT THE ASSESSING OFFICER HAD MADE ADDITIONS UNDER SECTION 69 OF THE ACT BEING UNDISCLOSED INVESTMENT. IN THE APPEAL, THE SAID FINDING WAS SET-ASIDE. BUT ADDITION WAS SUSTAINED ON A NEW GROUND, THAT IS UNDER VALUATION OF CLOSING STOCK. SINCE THE ASSESSING AUTHORITY HAD INITIATED PENALTY PROCEEDINGS BASED ON THE ADDITIONS MADE UNDER SECTION 69 OF THE ACT, WHICH WAS STRUCK DOWN BY THE APPELLATE AUTHORITY, THE INITIATED PENAL PROCEEDINGS, NO LONGER EXISTS. IF THE APPELLATE AUTHORITY HAD INITIATED PENAL PROCEEDINGS ON THE BASIS OF THE ADDITION SUSTAINED UNDER A NEW GROUND IT HAS A LEGAL SANCTUM. THIS WAS NOT SO IN THIS CASE AND THEREFORE, ON BOTH THE GROUNDS THE IMPUGNED ORDER PASSED BY THE APPELLATE AUTHORITY AS WELL AS THE ASSESSING AUTHORITY WAS SET-ASIDE BY ITS ORDER DATED 9TH APRIL, 2009. AGGRIEVED BY THE SAID ORDER, THE REVENUE FILED APPEAL BEFORE HIGH COURT. THE HONBLE HIGH COURT FRAMED THE FOLLOWING QUESTION 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 PROCEEDINGS ARE INITIATED ON THE GROUND OF CONCEALMENT OF INCOME OR ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS IS VALID AND LEGAL? 2. WHETHER THE PROCEEDINGS INITIATED BY THE ASSESSING AUTHORITY WAS LEGAL AND VALID? THE HONBLE KARNATAKA HIGH COURT HELD IN THE NEGATIVE AND AGAINST THE REVENUE ON BOTH THE QUESTIONS. THEREFORE THE DECISION 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 HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUPRA) APPEARS TO HAVE BEEN REITERATED, AS IS EVIDENT FROM THE EXTRACTS FURNISHED IN THE WRITTEN NOTE FURNISHED BY THE LEARNED DR BEFORE US. 5 ITA NOS.325 & 326/GAU/2018 RAM KRISHNA YADAV., AYS 2012-13 & 2013-14 12. IN THE CASE OF TRISHUL ENTERPRISES ITA NO.384 & 385/MUM/2014, THE MUMBAI BENCH OF ITAT FOLLOWED THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUPRA). 13. IN THE CASE OF MAHESH M. GANDHI (SUPRA) THE MUMBAI ITAT THE ITAT HELD THAT THE DECISION OF THE HONBLE 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 PROCEEDINGS 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 PROCEEDINGS ARE FOR FURNISHING INACCURATE PARTICULARS OR CONCEALING PARTICULARS OF INCOME, THAT WILL NOT VITIATE THE PENALTY PROCEEDINGS. IN THE PRESENT CASE THERE IS NO WHISPER IN THE ORDER OF ASSESSMENT ON THIS ASPECT. WE HAVE POINTED OUT THIS ASPECT IN THE EARLIER 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 LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) IN AS MUCH AS THE RATIO LAID DOWN IN THE SAID CASE WAS ONLY WITH REFERENCE TO SHOW CAUSE NOTICE U/S.274 OF THE ACT. THE HONBLE COURT DID NOT LAY DOWN A PROPOSITION THAT THE DEFECT IN THE SHOW CAUSE NOTICE WILL STAND CURED IF THE INTENTION OF THE CHARGE U/S.271(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 THAT THE LINE OF REASONING OF THE HONBLE BOMBAY HIGH COURT AND THE HONBLE PATNA HIGH COURT IS THAT 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 TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING OF THE INACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUNAL BENCHES AT MUMBAI AND PATNA BEING SUBORDINATE TO THE HONBLE BOMBAY HIGH COURT AND PATNA HIGH COURT ARE BOUND TO FOLLOW THE AFORESAID VIEW. THE TRIBUNAL BENCHS AT BANGALORE HAVE TO FOLLOW THE DECISION OF THE HONBLE KARNATAKA HIGH COURT. AS FAR 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 HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) AND OTHER OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA. IT IS SETTLED LEGAL POSITION THAT WHERE TWO VIEWS ARE AVAILABLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO BE FOLLOWED. WE THEREFORE PREFER TO FOLLOW THE VIEW EXPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA). 15. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE NOTICE 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 INACCURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIKE OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE THEREFORE HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE CANCELLED. 6. IN THE LIGHT OF THE AFORESAID DECISIONS, WE ARE INCLINED TO RESPECTFULLY FOLLOW THE ORDER OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF DR. MURARI MOHAN KOLEY, (SUPRA) EVEN THOUGH THE LD. DR VEHEMENTLY CONTENDED THAT THERE IS AN ORDER OF THE HONBLE HIGH COURT OF MADRAS IN FAVOUR OF THE REVENUE IN SUNDARAM FINANCE LTD. CITED SUPRA AND SINCE WE HAVE 6 ITA NOS.325 & 326/GAU/2018 RAM KRISHNA YADAV., AYS 2012-13 & 2013-14 ALREADY TAKEN CONSISTENT VIEW AS WELL AS THE HONBLE CALCUTTA HIGH COURTS ORDER IN PCIT VS. VIJAY KUMAR AGARWAL DATED 22.04.2019 WHEREIN ALSO THE HONBLE HIGH COURT WAS PLEASED TO UPHOLD THE TRIBUNALS DECISION WHEREIN THE NOTICE DID NOT SPECIFY THE CONTRAVENTION FOR WHICH THE ASSESSEE WAS BEING HELD AT FAULT SPECIFICALLY AND RELYING ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN THE HONBLE KARNATAKA HIGH COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTON 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 WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. WE ALSO NOTE THAT REVENUE PREFERRED AN APPEAL AGAINST THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN SLP NO CC NO.11485 OF 2016 AND THE HONBLE SUPREME COURT BY ITS ORDER DATED 05.08.2016 DISMISSED THE SLP PREFERRED BY THE DEPARTMENT. WE, THEREFORE, HOLD THAT PENALTY IMPOSED BY THE AO AND CONFIRMED BY THE LD. CIT(A) U/S. 271(1)(C) OF THE ACT IN BOTH THE PRESENT CASES ARE NOT SUSTAINABLE, SINCE THE NOTICES ISSUED PRIOR TO INITIATE PENALTY ARE BAD IN LAW AND THEREFORE PENALTY LEVIED CANNOT BE SUSTAINED AND HENCE, WE DELETE THE SAME. THE APPEALS OF ASSESSEE ARE ALLOWED. 7. IN THE RESULT, APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 JUNE, 2019 SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19 JUNE, 2019 JD.(SR.P.S.) 7 ITA NOS.325 & 326/GAU/2018 RAM KRISHNA YADAV., AYS 2012-13 & 2013-14 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SHRI RAM KRISHNA YADAV, C/O RAHUL RAJ JAIN & CO. H. NO. 15, 1 ST FLOOR, BYE LANE-2, SHAKTIGARH PATH, BHANGAGARH, G. S. ROAD, GUWAHATI-781005 2 RESPONDENT ITO, WARD-2, NAGAON, AAYAKAR BHAWAN, R.K.B. ROAD, CHRISTIANPATTY, NAGAON-782001. 3. 4. THE CIT(A), GUWAHATI-1, GUWAHATI. CIT , GUWAHATI 4. DR, ITAT, GUWAHATI BENCH, GUWAHATI / TRUE COPY, BY ORDER, SR. P.S. / H.O.O. / D.D.O ITAT, GAUHATI BENCH