MURARILAL MITTAL, Jaipur V. DCIT, Jaipur

ITA 333/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4914 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 06-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK
• Keywords: Search and seizure; Principle of natural justice; Initiation of penalty proceedings; Onus to prove; Documents seized
• Section: 153A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 333 & 334/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2004-05 & 2005-06 SHRI MURARILAL MITTAL B-18, CHOMU HOUSE, SARDAR PATEL MARG JAIPUR CUKE VS. THE DCIT CENTRAL CIRCLE- 3 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACCPM 1182 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY:SHRI VIJAY GOYAL & S HRI GULSHAN AGARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI R.A. VERMA, ADDL.CIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03/11/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 9 /11/2016 VKNS'K@ ORDER PER BHAGCHAND, AM BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST SEPARATE ORDERS OF THE LD. CIT(A), ALWAR DATED 24-02-2014 F OR THE ASSESSMENT YEAR 2004-05 & 2005-06 RAISING THEREIN FOLLOWING GR OUNDS:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE IMPOS ITION OF PENALTY U/S 271(1)( C) IMPOSED BY AO AMOUNTING TO R S. 1,36,145/- FOR THE ASSESSMENT YEAR 2004-05 AND RS. 2,01,825/- FOR THE ASSESSMENT YEAR 2005-06 RESPECTI VELY ITA NO. 333/JP/2015 SHRI MURARILAL MITTAL VS. DCIT, CENTRAL CIRCLE- 3, JAIPUR . 2 WITHOUT APPRECIATING THE FULL FACTS OF CASE AND SUB MISSION OF THE ASSESSEE DURING THE COURSE OF APPEAL PROCEEDING S. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL AND DERIVES INCOME FROM INTEREST INCLUDING INTEREST ON SECURITY DEPOSIT FROM VARIOUS PHARMACEUTICALS COMPANIES, INCOME FROM BUSI NESS & PROFESSION WHICH CONSISTED OF INCOME FROM TRADING OF MEDICINES AND INCOME FROM C&F AGENT OF VARIOUS PHARMACEUTICAL COMPANIES UNDER THE NAME AND STYLE OF M/S. MITTAL ENTERPRISES. IT IS NOTED FROM THE ASSESSMENT ORDER THAT ORIGINALLY RETURN OF INCOME WAS FILED BY THE ASSESS EE ON 25-10-2004 DECLARING INCOME OF RS. 1,51,100/- FOR THE ASSESSME NT YEAR UNDER CONSIDERATION. A SEARCH WAS CONDUCTED ON 27-8-2008 IN THE CASE OF MITTAL GROUP TO WHICH THE ASSESSEE BELONGED. THE GROUP IS ENGAGED IN WHOLESALE TRADING / C&F AGENT OF MEDICINES/ PHARMACEUTICALS. VARIOUS ASSETS/ BOOKS OF ACCOUNT AND DOCUMENTS HAD BEEN FOUND AND S EIZED AS PER ANNEXURES PREPARED DURING SEARCH. IN COMPLIANCE TO THE NOTICE U/S 153A OF THE ACT, THE ASSESSEE FILED THE RETURN DECLARING INCOME OF RS. 5,85,090/- ON 31-03-2009. THE ASSESSMENT WAS MADE U/S 153A/143 (3) OF THE ACT ON INCOME OF RS. 6,18,980/- VIDE ASSESSMENT ORDER DATE D 9-12-2010 WHICH INCLUDED SURRENDER OF INCOME OF RS. 4,53,819/- ON T HE BASIS OF TRANSACTIONS RECORDED ON VARIOUS DOCUMENTS INCLUDIN G DOCUMENTS SEIZED ITA NO. 333/JP/2015 SHRI MURARILAL MITTAL VS. DCIT, CENTRAL CIRCLE- 3, JAIPUR . 3 FROM THE PREMISES AT MITTAL CHAMBERS MARKED AS ANNE XURE A-1 TO A-3. AS PER EXPLANATION FURNISHED DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE SURRENDER OF INCOME OF RS. 4,53,819/- REPRESENT ED UNDISCLOSED PAYMENT MADE TO VARIOUS PARTIES. THUS THE AO OBSERV ED THAT THE AMOUNT OF RS. 4,53,819/-REPRESENTED UNDISCLOSED INCOME OF PARTICULARS WHICH HAD BEEN CONCEALED BY THE ASSESSEE. HENCE, THE AO SIMUL TANEOUSLY INITIATED THE PENALTY PROCEEDINGS U/S 271(1) OF THE ACT FOR CONCEALMENT OF INCOME AND A NOTICE WAS ISSUED ON 9-12-2010 WHICH W AS DULY SERVED UPON THE ASSESSEE FOR WHICH THE ASSESSEE FILED THE WRITTEN SUBMISSION ON 8-05-2011. IN PENALTY PROCEEDINGS, THE AO IMPOSED T HE PENALTY OF RS. 1,36,145/- BY OBSERVING AS UNDER:- 9. IN VIEW OF ABOVE STATED LEGAL POSITION AND THE FACT OF THE CASE, I HOLD THAT THE ASSESSEE HAS NOT BEEN ABLE TO DISCHAR GE HIS RIGHT PART OF THE BURDEN AND ESTABLISH HIS IGNORANCE AND RIGHTEOUS CO NDUCT. AS A MATTER OF FACT THE BURDEN OF PROOF HAS BEEN ENTIRELY SHIFTED TO TH E ASSESSEE AND IT IS THIS PARADIGM SHIFT WHICH IS ONE OF THE MOST IMPORTANT F EATURES OF RULE OF EVIDENCE IN CIVIL PROCEEDINGS AS DISTINCT FROM CRIMINAL PROC EEDINGS.(UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS (2007) 298 ITR 244 (S C)). THE ASSESSEE THUS CONCEALED INCOME OF RS. 4,53,819/- FOR WHICH PROVIS ION OF SECTION 271(1) OF THE ACT ARE APPLICABLE. A PENALTY OF RS. 1,36,145/- IS LEVIED UNDER AFORESAID PROVISION WHICH IS CALCULATED AS UNDER:- 1. TAX ON ASSESSED INCOME OF RS. 6,18,980 (AS PER ORDER U/S 143(3)/154 DATED 21-02-2011 RS. 1,59,694/- 2. TAX ON INCOME EXCLUDING CONCEALED INCOME RS. 23,548/- 3. QUANTUM OF TAX SOUGHT TO BE EVADED (1-2) RS. 1,36,145/- 4. MINIMUM PENALTY IMPOSABLE 100% RS. 4,08,435/ - ITA NO. 333/JP/2015 SHRI MURARILAL MITTAL VS. DCIT, CENTRAL CIRCLE- 3, JAIPUR . 4 5. MAXIMUM PENALTY IMPOSABLE 300% RS. 1,36,135/ - 2.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO CONFIRMED THE PENALTY OF RS. 1,36,135/- U/S 271(1)(C) OF THE ACT BY OBSERVING AS UNDER:- 4.6 HAVING CONSIDERING THE MATERIAL AVAILABLE ON RECORD, I FIND THAT IT IS NOT DISPUTED THAT UNACCOU NTED INCOME OF RS. 4,53,819/- HAS BEEN DECLARED IN THE RETURN O F INCOME FILED AFTER THE SEARCH. THE APPELLANT HIMSELF HAS A DMITTED THE ADDITIONAL INCOME BASED ON INCRIMINATING DOCUMENTS FOUND AT THE TIME OF SEARCH AND THEREFORE, THE SAME WAS N OT OFFERED FOR TAXATION IN THE RETURN FILED U/S 153A OF THE I. T. ACT. THUS, THE ADDITIONAL INCOME OF THE ASSESSEE WAS NOT ON AC COUNT OF VOLUNTARY DISCLOSURE BY THE APPELLANT BUT BECAUSE O F THE COMPULSION ON ACCOUNT OF EVIDENCE IN POSSESSION OF THE INCOME TAX DEPARTMENT. THE APPELLANT CHOSE TO ACCEP T THIS ADDITIONAL INCOME AFTER HAVING BEEN SEARCHED BY THE DEPARTMENT. 4.7 IT IS SEEN THAT PROVISIONS OF EXPLANATION 5A WERE INSERTED BY THE FINANCE ACT 2007 WITH EFFECT F ROM 01- 06-2007. THE PROVISIONS ARE:- 4.8 THUS, IT IS SEEN THAT THE PROVISIONS OF EXPLANATION 5A ARE MANDATORY IN NATURE AND THE PENA LTY IS LEVIABLE ON THE AMOUNT OF ADDITIONAL INCOME DECLARE D IN THE RETURN OF INCOME FILED U/S 153A OF THE I.T. ACT. 4.9 THE CASE LAWS CITED BY THE APPELLANT HAVE BEEN FOUND TO BE DISTINGUISHABLE ON FACTS AND ARE NOT AP PLICABLE. THUS, I FIND NO MERIT IN THE SUBMISSIONS FILED BY T HE APPELLANT AND HOLD THAT AO WAS JUSTIFIED IN INITIAT ING THE PROCEEDINGS U/S 271(1) OF THE I.T. ACT IN ACCORDAN CE WITH THE PROVISIONS OF EXPLANATION 5A TO THE SAID SECTIO N. FOR THIS PROPOSITION, I PLACE RELIANCE ON THE HON'BLE SUPRE ME COURT ITA NO. 333/JP/2015 SHRI MURARILAL MITTAL VS. DCIT, CENTRAL CIRCLE- 3, JAIPUR . 5 JUDGEMENT IN THE CASE OF MAK DATA PVT. LTD. VS. CIT , 358 ITR 593 (SC) WHERE IT WAS HELD THAT EVEN IF AMOUN T SURRENDERED IN SURVEY WAS TO BUY PEACE OF MIND, LEV Y OF PENALTY WAS VALID. THIS CASE LAW WAS IN THE CONTEXT OF THE EXPLANATION 5 OF SECTION 271(1) OF THE I.T. ACT WH EREAS AFTER THE INSERTION OF EXPLANATION 5A TO THIS SECTI ON, THE LEVY OF PENALTY ON THE ADDITIONAL INCOME DECLARED HAS BE COME MANDATORY BY VIRTUE OF EXPRESS PROVISIONS TO THIS E FFECT IN THE STATUTE. 4.10 IN VIEW OF THE ABOVE DISCUSSION, I CONFIRM THE LEVY OF PENALTY OF RS. 1,36,145/- IMPOSED BY THE AO U/S 271(1) OF THE I.T. ACT, 1961. 2.3 DURING THE COURSE OF HEARING BEFORE THE BENCH , THE LD. AR OF THE ASSESSEE PRAYED THAT THE LD. CIT(A) HAD ERRED IN CO NFIRMING THE IMPOSITION OF PENALTY OF RS. 1,36,145/- U/S 271(1)( C) OF THE ACT. THE RELEVANT SUBMISSION OF THE LD. AR OF THE ASSESSEE D URING THE COURSE OF HEARING IS AS UNDER:- THE AO LEVIED THE PENALTY U/S 271(1) ON THE ADDITIONAL INCOME SURRENDERED IN RETURN FILED U/S 1 53A OF THE ACT AND ADDITIONS SUSTAINED SOLELY FOR THE REASON T HAT THE SAME WAS NOT DECLARED IN THE INCOME TAX RETURN FILE D U/S 139(1) OF THE I.T. ACT, 1961. THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1) OF ACT IN THE ASSESSMENT ORDER DATED 9-12-2010 ON THE ADDITIONAL INCOME SURRENDERED IN THE153A RETURN BY MENTIONING THAT PENALTY PROCEEDINGS U/S 271(1) O F THE ACT ARE INITIATED FOR CONCEALMENT OF INCOME/ FILING OF INCOME. FURTHER IN THE PENALTY NOTICE U/S 274 REA D WITH SECTION 271 OF I.T. ACT, ANNEXED WITH THE ASSESSME NT ORDER THE AO MENTIONED THAT WHEREAS IN THE COURSE OF AS SESSMENT ITA NO. 333/JP/2015 SHRI MURARILAL MITTAL VS. DCIT, CENTRAL CIRCLE- 3, JAIPUR . 6 PROCEEDINGS BEFORE ME FOR THE A.Y. 2004-05, IT APPE ARS TO ME THAT AS PER SECTION 274 READ WITH SECTION 271(1) OF THE I.T. ACT, YOU ARE LIABLE FOR PENALTY FOR CONCEALMEN T OF INCOME/ FURNISHING INACCURATE PARTICULARS OF INCOME . THUS THE PENALTY PROCEEDINGS WERE INITIATED WITHOU T SPECIFYING THE LIMB FOR REASONS IN THE PENALTY NOTI CE TO IMPOSE THE PENALTY I.E. WHETHER THE PENALTY WAS INI TIATED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNIS HING INACCURATE PARTICULARS OF INCOME. THEREFORE, THE IN ITIATION AND IMPOSING OF PENALTY PROCEEDINGS IS WRONG, BAD I N LAW, INVALID AND VOID AB INITIO. THE LD. AR OF THE ASSESSEE RELIED ON FOLLOWING CASE LAWS. (I) H.LAKSHMINARAYANA VS. ITO (ITAT BANGLORE TRIBUN AL IN ITA NO. 992 TO 996/BAN/2014 ORDER DATED 3-07-201 5) WHERIN THE DECISION OF HON'BLE KARNATAKA HIGH COUR T IN THE CASE OF CIT & ANR. VS. MANJUNATHA COTTON AND GINNIN G FACTORY, 359 ITR 565 HAD BEEN RELIED ON (II) ITAT JAIPUR BENCH DECISION IN THE CASE OF SHAN KAR LAL KHANDELWAL VS. DCIT (ITA NO. 878/JP/2013 DATE O F ORDER 11-03-2013 FOR THE ASSESSMENT YEAR 2007-08) 2.4 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 2.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED FROM THE RECORD TH AT THE ASSESSEE IS AN INDIVIDUAL DECLARING INCOME FROM HOUSE PROPERTY AND INCOME FROM BUSINESS OR PROFESSION AS PROPRIETOR OF M/S. MITTAL ENTERPRISES. THE RETURN U/S 139(1) OF THE ACT WAS FILED ON 25-10-2004 BY TH E ASSESSEE DECLARING TOTAL INCOME OF RS. 1,51,100/-. SEARCH AND SEIZURE OPERATIONS WERE CARRIED ITA NO. 333/JP/2015 SHRI MURARILAL MITTAL VS. DCIT, CENTRAL CIRCLE- 3, JAIPUR . 7 OUT ON 27-08-2008 ON RESIDENTIAL AND BUSINESS PREMI SES OF THE ASSESSEE. THE RETURN U/S 153 OF THE I.T. ACT WAS FILED ON 31- 03-2009 DECLARING TOTAL INCOME OF RS. 5,85,090/- WHICH INCLUDED ADDITIONAL INCOME SURRENDER OF RS.4,53,819/-. THE ASSESSMENT WAS MADE BY THE AO U/ S 153A/143(3) OF I.T. ACT ON TOTAL INCOME OF RS. 6,18,980/- WHICH IN CLUDED THE ADDITION OF RS. 33,892/- MADE BY THE AO ON ACCOUNT OF DISALLOW ANCE MADE FROM VARIOUS EXPENSES. IN PENALTY PROCEEDINGS, THE AO IM POSED THE PENALTY OF RS. 1,36,145/- BEING 100% OF TAX PAYABLE ON ADDITI ONAL INCOME OF RS. 4,53,819/- DECLARED BY THE ASSESSEE. THE LD. CI T(A) HAF CONFIRMED THE ACTION OF THE AO. IT IS NOTED FROM THE RECORD THAT THE AO HAD INITIATED PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME OR FO R FURNISHING INACCURATE PARTICULARS OF INCOME. IN THE NOTICE ALS O, THE AO HAS NOT SPECIFIED FOR WHICH SPECIFIC REASON THE PENALTY PRO CEEDINGS HAS BEEN INITIATED WHETHER IT IS FOR CONCEALMENT OF INCOME O R FOR FURNISHING INACCURATE PARTICULARS OF INCOME. ULTIMATELY, THE A O LEVIED THE PENALTY FOR CONCEALMENT OF INCOME. THE HON'BLE KARNATAKA H IGH COURT IN THE CASE OF CIT & ANR VS. MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 HELD AS UNDER:- THOUGH PENALTY PROCEEDINGS ARE IN THE NATURE OF CIVIL LIABILITY, I N FACT, IT IS PENAL IN NATURE. IN EITHER EVENT, THE P ERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED IN SECTION 271 SHOULD BE MADE KNOWN ABOUT THE ITA NO. 333/JP/2015 SHRI MURARILAL MITTAL VS. DCIT, CENTRAL CIRCLE- 3, JAIPUR . 8 GROUNDS ON WHICH THEY INTEND IMPOSING PENALTY ON HI M AS SECTION 274 MAKES IT CLEAR THAT THE 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 FORM WHERE ALL THE GROUNDS MENTIO NED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY THE 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 PER CENT. TO 300 PER CENT. OF THE TAX LIABILITY. AS THE SAID PROVISIONS HAVE TO BE HELD TO BE STRICTLY CONSTRUED, NOTICE ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWIS E, THE PRINCIPLES OF NATURAL JUSTICE IS OFFENDED IF THE SHOW-CAUSE NOTIC E IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASSESSEE. IT IS ALSO NOTED THAT SIMILAR TYPE OF ISSUE WAS DEC IDED IN FAVOUR OF THE ASSESSEE BY ITAT COORDINATE BENCH IN THE CASE OF S HANKAR LAL KHANDELWAL VS. DCIT, CENTRAL CIRCLE- 1, JAIPUR VIDE ITS ORDER DATED 11- 03-2016 IN ITA NO. 878/JP/2013 FOR THE ASSESSMENT Y EAR 2007-08 BY OBSERVING AS UNDER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON T HE RECORD. IN THIS CASE, THE LD ASSESSING OFFICER INIT IATED PENALTY PROCEEDINGS FOR CONCEALING OF PARTICULARS O F INCOME AND FOR FURNISHING INACCURATE PARTICULARS OF INCOME VIDE ORDER DATED 31/12/2009. NOTICE U/S 274 READ WITH SEC TION 271-272 OF THE ACT WAS ISSUED ON 30/12/2009 BY TICKI NG OF THE NOTICE AS UNDER:- U/S 271(1)(C):- CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E. THE LD ASSESSING OFFICER AGAIN GAVE NOTICE DURING TH E COURSE OF PENALTY PROCEEDINGS ON 23/1/2012 WHEREIN HE GAVE SHOW CAUSE NOTICE U/S 271(1)(C) FOR IMPOSING OF ITA NO. 333/JP/2015 SHRI MURARILAL MITTAL VS. DCIT, CENTRAL CIRCLE- 3, JAIPUR . 9 PENALTY WITHOUT SPECIFYING THE LIMB FOR REASONS TO I MPOSE THE PENALTY, WHETHER IT IS FOR CONCEALED PARTICULAR S OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E. THE LD CIT(A) HAS CONSIDERED ALL THE ASPECT AND HELD THA T EXPLANATION 5A TO SECTION 271(1)(C) IS APPLICABLE A S IN THIS CASE, A SEARCH WAS CARRIED OUT AFTER 01/6/2007 AND THE ASSESSEE HAS FURNISHED RETURN FOR A.Y. 2007-08 BEFO RE SEARCH AND ADDITIONAL INCOME HAS BEEN DISCLOSED U/S 153A. THEREFORE, DEEMING PROVISIONS ARE APPLICABLE. IT IS UNDISPUTED FACT THAT THE ASSESSEE HAS DISCLOSED ADD ITIONAL INCOME IN RETURN FILED U/S 153A ON THE BASIS OF INCRIMINATING DOCUMENT FOUND DURING THE COURSE OF S EARCH. WE HAVE CONSIDERED VIEW THAT EXPLANATION 5A IS NOT REQUIRED TO BE MENTIONED BY THE ASSESSING OFFICER SPECIFICALLY AT THE TIME OF INITIATION OR EVEN IN T HE SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER, BUT B ASIC DEFECT WE FOUND THAT THE LD ASSESSING OFFICER HAS MENTIONED AT THE TIME OF INITIATION OF PENALTY PROC EEDING UNDER BOTH THE LIMBS I.E. CONCEALED THE PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCO ME BUT AT THE TIME OF NOTICE U/S 274 HE SIMPLY HAS TICKED IN PRESCRIBED PROFORMA CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME WITHOUT D ELETING EITHER LIMB OF PENALTY EVEN HE HAS NOT PUT AND IN T HE NOTICE ITSELF BETWEEN TWO LIMBS. THE AMENDED PROVISIONS OF SU B- SECTION (1B) OF SECTION 271 HAS BEEN CONSIDERED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF MADHU SHREE GUPTA VS. UOL, 317 ITR 107 WHEREIN IT HAS BEEN HELD THAT AT THE STAGE OF INITIATION OF PENALTY PROCEEDINGS, THE ORD ER PASSED BY THE ASSESSING OFFICER NEED NOT REFLECT SATISFACT ION VIS A VIS EACH AND EVERY ITEM OF ADDITION OR DISALLOWANCE IF THE OVERALL SENSE GATHERED FROM THE ORDER IS THAT A FUR THER PROGNOSIS IS CALLED FOR. IT WOULD BE SUFFICIENT COMP LIANCE WITH THE LAW THAT THERE IS A PRIMA FACIE EVIDENCE FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. EVEN AFTER THIS S ECTION, THE ASSESSING OFFICER HAS TO SATISFY THE PARTICULAR LIMB OF INITIATION OF PENALTY IMPOSABLE U/S 271(1)(C) OF TH E ACT AT THE TIME OF ASSESSMENT PROCEEDINGS. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. M/S ITA NO. 333/JP/2015 SHRI MURARILAL MITTAL VS. DCIT, CENTRAL CIRCLE- 3, JAIPUR . 10 MANJUNATHA COTTON & GINNING FACTORY & ORS.(2013) 35 9 ITR 565 (KARN) HELD THAT SENDING PRINTED FORM WHERE A LL THE GROUNDS MENTIONED IN SECTION 271 WOULD NOT SATIS FY THE REQUIREMENT OF LAW. THE ASSESSEE SHOULD KNOW THE GROUN D WHICH HE HAS TO MEET SPECIFICALLY, OTHERWISE, THE PRI NCIPLE OF NATURAL JUSTICE IS OFFENDED ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED TO THE ASS ESSEE. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF TEJ BHAN COTTON GINNING & PRESSING FACTORY VS. CIT, ROHTAK (SUPRA) HAS HELD THAT THE ASSESSING OFFICER IN ASSESSMENT ORDER HAS SATISFIED HIMSELF REGARDING IN ITIATION OF PENALTY PROCEEDINGS, WHICH WAS TANTAMOUNT TO SATISFACTION HAVE RECORDED TO THE FACT ON THE BASIS OF ADDITION MADE BY THE ASSESSING OFFICER FOR CONCEALE D INCOME IN ASSESSMENT ORDER. THE HONBLE COURT HAS CONFIRMED THE PENALTY EVEN PENALTY PROCEEDINGS INIT IATED BY THE ASSESSING OFFICER BY MENTIONING PENALTY PROCEED ING FOR CONCEALING/FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE HONBLE PUNJAB & HARYANA HIGH COURT HAS EXPRESSE D DIFFERENT VIEW ON INITIATION OF PENALTY PROCEEDINGS EVEN NOTICE U/S 274 ISSUED BY PUTTING OBLIQUE BETWEEN CONCEALING AND FURNISHING OF INACCURATE PARTICULARS OF INCOME WHEREAS THE HONBLE KARNATAKA HIGH COURT HAS HELD THAT THE ASSESSING OFFICER HAS TO SATISFY AT THE TI ME OF INITIATION OF PENALTY PROCEEDING AND ISSUING NOTICE U/S 274 OF THE ACT THAT WHETHER PENALTY IS FOR CONCEALED PA RTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS O F INCOME. THERE WERE TWO OPINIONS OF THE HONBLE COURTS. THE HON'BLE SUPREME COURT HAS HELD THAT IN CASE OF TWO V IEWS OF THE COURT, FAVOURABLE VIEW OF THE ASSESSEE WOULD B E TAKEN AS HELD IN THE CASE OF CIT VS VEGETABLE PRODUC TS LTD. (1973) 88 ITR 192 (SC) AND A RECENT DECISION IN THE CASE OF CIT VS. VATIKA TOWNSHIP P LTD. (2014) 367 ITR 466 (SC). THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT INITIAT ION OF PENALTY PROCEEDINGS IS NOT AS PER LAW AND ASSESSING OFFICER DID NOT HAVE ANY JURISDICTION TO IMPOSE PENALTY U/S 271(1)(C) OF THE ACT. AS THE MATTER HAS BEEN DECIDE D ON TECHNICAL ISSUE, WE ARE NOT EXPRESSING ANY VIEW ON ME RIT OF THE CASE. ACCORDINGLY, WE DELETE THE PENALTY CONFIRM ED BY THE LD CIT(A). ITA NO. 333/JP/2015 SHRI MURARILAL MITTAL VS. DCIT, CENTRAL CIRCLE- 3, JAIPUR . 11 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. IN VIEW OF THE ABOVE DELIBERATIONS AND RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINATE BENCH IN THE CASE OF SHANKAR LAL KHA NDELWAL VS. DCIT, CENTRAL CIRCLE- 1, JAIPUR (SUPRA), THE PENALTY CONF IRMED BY THE LD. CIT(A) IS DIRECTED TO BE DELETED. THUS THE APPEAL OF THE A SSESSEE IS ALLOWED. 3.1 THE SIMILAR ISSUE IS RAISED BY THE ASSESSEE IN HIS ITA NO. 334/JP/2015 FOR THE ASSESSMENT YEAR 2005-06. THE L D. CIT(A) HAS CONFIRMED THE ACTION OF AO IN IMPOSING THE PENALTY OF RS. 2,01,825/- U/S 271(1)(C) OF THE ACT ON THE SAME BASIS AS DONE IN T HE ASSESSMENT YEAR 2004-05. . 3.2 IN APPEAL BEFORE THE BENCH, THE SIMILAR ISSUE H AS BEEN DECIDED IN FAVOUR OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2004 -05 (SUPRA) DELETING THE PENALTY CONFIRMED BY THE LD. CIT(A) U/S 271(1)( C) OF THE ACT AMOUNTING TO RS. 1,36,145/-. SINCE THE ISSUE OF THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 IS SIMILAR TO THE A PPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2004-05, THEREFORE, THE DECIS ION TAKEN FOR THE ASSESSMENT YEAR 2004-05 SHALL APPLY MUTATIS MUTANDI S IN THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 ALSO. THUS THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 IS ALSO AL LOWED. ITA NO. 333/JP/2015 SHRI MURARILAL MITTAL VS. DCIT, CENTRAL CIRCLE- 3, JAIPUR . 12 4.0 IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 /11/2016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 9 /11/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI MURARILAL MITTAL, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CENTRAL CIRCLE- 3, JAIPU R 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 333& 334JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR