M/s Jammu and Kashmir State Power Development Corporation Ltd, Srinagar V. The Assistant Commissioner of Income Tax, Srinagar

ITA 339/ASR/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7840 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-06-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 09-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M P S INGH LD
• Assessee Lawyers: DALI P K KAUL LD
• Keywords: Retrospective amendment; Question of law; Difference of opinion; Bonafide mistake
• Section: 271(1)(c); 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. VIKRAM SINGH YADAV , ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.339(ASR)/2016 ASSESSMENT YEAR:2011-12 M/S. JAMMU & KASHMIR STATE POWER DEVELOPMENT CORPORATION LTD., EXHIBITION GROUND, SRINAGAR. [PAN:AAACJ 9770H] VS. ASST. CIT, CIRCLE-3, SRINAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. DALI P K. KAUL (LD. CA) RESPONDENT BY: SH. M.P. SINGH (LD. CIT-DR) DATE OF HEARING: 14.06.2019 DATE OF PRONOUNCEMENT: 27.07.2019 ORDER PER N.K.CHOUDHRY, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE/APPE LLANT AGAINST THE ORDER DATED 31/03/2016 IMPUGNED HEREIN, PASSED BY THE LD. CIT(A)-JAMMU U/S. 250(6) OF INCOME TAX ACT, 1 961 (HEREINAFTER CALLED AS THE ACT), WHEREBY THE LD. CIT (A) AFFIRMED THE PENALTY ORDER DATED 26/09/2014 PASSED U/S 271(1)(C) OF THE ACT BY THE ACIT, CIRCLE-3, SRINAGAR. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 31/03/2012 DECLARING NET LOSS OF RS.(-) 1,15,96,10,197/- AND SHOWING A BOOK PROFIT OF RS.41,21,24,066/- UNDER MAT PROVISIONS U/S 115JB OF THE ACT, AGAINST WHICH THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT ON DATED 28/03/2014 BY DETERMINING THE INCOME OF THE ASSESSEE 2 ITA NO.339/ASR/2016 (A.Y.2011-12) J &K STATE POWER DEV. CORP. LTD. SRI VS. ACIT AT RS.1,04,42,90,547/- AND ADDITION OF RS.63,21,66,48 1/- WAS MADE U/S 115JB OF THE INCOME TAX ACT. CONSEQUENTLY THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE ALSO I NITIATED WHICH RESULTED INTO IMPOSITION OF PENALTY TO THE TUNE OF RS.20,81,32,327/- (WHICH REPRESENTS 100% OF TAX SOUGHT T O BE EVADED) U/S. 271(1)(C) OF THE ACT FOR FURNISHING INACCUR ATE PARTICULARS OF INCOME/ CONCEALMENT OF PARTICULARS OF INCOME ,. 3. THE ASSESSEE, ON AGGRIEVED, CHALLENGED THE PENALTY ORDE R PASSED BY THE ASSESSING OFFICER BEFORE THE LD. CIT(A), WH O ULTIMATELY AFFIRMED THE PENALTY ORDER, HOWEVER, DIR ECTED THE ASSESSING OFFICER TO RECOMPUTE THE PENALTY ON THE TAX SOUG HT TO BE EVADED AND CHARGE INTEREST AND SURCHARGE INTEREST, ACCORDINGLY AS PER THE ACT. THE ASSESSEE PREFERRED THE I NSTANT APPEAL AGAINST THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS: GROUNDS OF APPEAL (AMENDED/MODIFIED) RS. 208132327/ (INADVERTENTLY MENTIONED AS RS. 197791730/- IN CIT APPELLATE ORDER) A) THE LEARNED (LD.) COMMISSIONER OF INCOME TAX ( APPE ALS) HAS ERRED IN LAW, FACTS AND CIRCUMSTANCES OF THE CASE B Y WRONGLY CONFIRMING THE PENALTY U/S 271(1) (C ) OF THE INCOM E TAX ACT 1961. B) THE CONFIRMATION OF PENALTY ORDER BY THE LD. COMM ISSIONER OF INCOME TAX (APPEALS) IS LEGALLY & FACTUALLY INCORRE CT, AS THE LD. ASSESSING OFFICER HAS ONLY ENHANCED THE BOOK PROFIT S DURING THE ASSESSMENT PROCEEDINGS, WHEREAS PENALTY IS IMPOSED ONLY ON ADDITIONS, IF ANY MADE UNDER NORMAL PROVISIONS OF T HE INCOME TAX ACT, 1961 FALLING WITHIN THE DEFINITION OF SECT ION 271(1) (C). THERE IS NO ADDITION TO THE INCOME OF THE APPELLANT AS PER THE NORMAL PROVISIONS OF INCOME TAX ACT 1961. C) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW, FACTS AND CIRCUMSTANCES OF THE CASE BY CONFIRMING T HE PENALTY U/S 271(1) (C) OF THE INCOME TAX ACT 1961 WHEN THE LD. ASSESSING OFFICER HIMSELF WAS NOT CLEAR WHETHER THE PENALTY IS TO BE LEVIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR FOR THE CONCEALMENT OF PARTICULARS OF INCOME. FURTHER, THE LD. 3 ITA NO.339/ASR/2016 (A.Y.2011-12) J &K STATE POWER DEV. CORP. LTD. SRI VS. ACIT COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN L AW, FACTS AND CIRCUMSTANCES OF THE CASE BY CONFIRMING THE PEN ALTY U/S 271(1) (C) OF THE INCOME TAX ACT 1961 AS THE LD. AS SESSING OFFICER HAS ISSUED A PENALTY ORDER WHICH IS ILLEGAL AND VOID AB- INITIO SINCE HE HAS NOT SPELT OUT UNDER WHICH LIMB OF SECTION 271(L)(C), THE PENALTY PROCEEDINGS HAVE BEEN INITIA TED (ASSESSMENT ORDER), ISSUED THE NOTICE OF PENALTY AN D FINALLY THE PENALTY ORDER CONFIRMING THE PENALTY. D) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW, FACTS AND CIRCUMSTANCES OF THE CASE BY CONFIRMING T HE PENALTY LEVIED BY THE LD. ASSESSING OFFICER, AS THE APPELLA NT/ASSESSE HAS NEITHER MADE ANY WILFUL CONCEALMENT NOR FURNISH ED INACCURATE PARTICULARS OF INCOME, HOWEVER HAS COMMI TTED SOME BONAFIDE OMISSION, WHICH DOES NOT HOLD FOR LEVY FOR PENALTY U/S 271(1) (C) OF THE INCOME TAX ACT 1961 AND THE SAID BONAFIDE MISTAKE WAS DISCLOSED DURING THE ASSESSMENT PROCEED INGS BY THE APPELLANT/ASSESSEE THEMSELVES. FURTHER THE SAME HAS ALSO BEEN DISCLOSED IN THE TAX AUDIT REPORT AND REPORT U /S 115JB WHILE FILING IN THE INCOME TAX RETURN BY THE APPELL ANT. E) THE LD. COMMISSIONER OF INCOME TAX ( APPEALS) HAS IGNORED THE FACT THAT THE APPELLANT HAS NOT PAID ANY INCOME TAX UNDER THE NORMAL PROVISIONS OF THE INCOME TAX BUT HAS PAID TA X UNDER MAT PROVISIONS WHICH IS MERELY AN ADVANCE TAX AND AVAIL ABLE FOR TAX CREDIT IN FUTURE YEARS. F) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS IGNORED THE PRINCIPLES OF NATURAL LAW AND JUSTICE WHILE CONFIRM ING THE PENALTY. THE APPELLANT CRAVES LEAVE TO ADD/ ALTER OR AMEND A NY GROUNDS OF APPEAL ON OR BEFORE THE DATE OF 4. HAVING HEARD THE PARTIES AT LENGTH AND PERU SED THE DOCUMENTS AVAILABLE ON RECORD. AT THE OUTSET, IT WAS STAT ED BY LD. AR IN THE INSTANT CASES, THE AO WHILE INITIATING PE NALTY PROCEEDINGS RECORDED A SATISFACTION QUA FURNISHING OF INAC CURATE PARTICULARS OF INCOME/CONCEALMENT OF PARTICULARS OF ITS INCO ME, AND WHILE ISSUING A NOTICE U/S 274 OF THE ACT, MENTIONE D BOTH LIMBS I.E. CONCEALMENT OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF INCOME AND FINALLY WITHOUT SPECIFYING TH E LIMB, IMPOSED THE PENALTY FOR CONCEALMENT OF INCOME/FURNISHING 4 ITA NO.339/ASR/2016 (A.Y.2011-12) J &K STATE POWER DEV. CORP. LTD. SRI VS. ACIT INACCURATE PARTICULARS OF INCOME, WHICH GOES TO SHOW THAT WHILE INITIATING THE PENALTY, ISSUING THE NOTICE U/S 274 OF THE ACT AND LEVYING THE PENALTY, THE AO WAS NOT SURE UNDER WHICH LIMB THE PENALTY WAS ATTRACTED AND IMPOSABLE. IN THE SIMILAR FAC TS AND CIRCUMSTANCES, WHILE ANALYZING VARIOUS DECISIONS RENDERED BY HON'BLE KARNATAKA HIGH COURT IN MANJUNATHA COTTON AN D GINNING FACTORY 359 ITR 565 (KAR), CIT VS MANU ENGINEERING WORKS (1980) 122 ITR 306 (GUJ), AND PADMA RAM BHARALI VS CIT, THE CO-ORDINATE BENCH AT AMRITSAR IN (THIRD MEMBER'S CASE S) HPCL MITTAL ENERGY LTD VS ADDL CIT & HPCL MITTAL P IPELINE LTD., VS ADDL CIT ( ITA NOS. 554 & 555/ASR/2014 AND 510 & 556/ASR.2014 ASSESSMENT YEARS 2008-09 & 2009-10, ORDER DATED 7.5.2018), ORDERED FOR DELETION OF THE PENAL TY AND THE CONSEQUENTIAL EFFECT TO THE THIRD MEMBER DECISION WAS G IVEN BY THE CO-ORDINATE BENCH IN THE SAME ITA NOS. VIDE ORDER DATED 7.5.2018 AND THEREFORE THE INSTANT CASE IS SQUARELY COVE RED BY THE DECISION OF THE TRIBUNAL (THIRD MEMBER'S CASES). 4.1 ON THE CONTRARY, THE LD. CIT(DR) SUBMITTED THAT E VERY CASE IS UNIQUE IN NATURE DISTINCT ONE AND MUST BE DECIDED IN ACCORDANCE WITH ITS PECULIAR FACTS AND CIRCUMSTANCES AND THE AUTHORITIES BELOW WERE RIGHT IN INITIATING PENALTY P ROCEEDINGS AS WELL AS IMPOSING THE PENALTY AND THEREFORE, THE ORDER UNDER CHALLENGE DOES NOT SUFFER FROM ANY PERVERSITY, ILLEGALI TY OR IMPROPRIETY. 5. THOUGH THE ASSESSEE AND THE REVENUE DEPARTMENT EXTENSIVELY ARGUED THE MATTER AT LENGTH ON MERITS AS WELL ON LEGAL ASPECTS AND THE ASSESSEE ALSO FILED MANY JUDGMENTS (WH ICH 5 ITA NO.339/ASR/2016 (A.Y.2011-12) J &K STATE POWER DEV. CORP. LTD. SRI VS. ACIT ARE PART OF THE RECORD) ON MERIT AS WELL ON LEGAL AS PECT, HOWEVER AS THE ASSESSEE HAS RAISED THE LEGAL GROUND SPECIFICALLY AND STRESSED UPON THE ADJUDICATION OF THE SAME THEREFORE, WE FEEL IT APPROPRIATE TO DECIDE THE LEGAL GROUND FIRST, BEFORE GOING INTO THE MERIT OF THE CASE. 6. AT THE OUTSET, IT IS OBSERVED THAT THE ASSESSING OFFICE R IN THE ASSESSMENT ORDER WHILE INITIATING THE PENALTY PROCEEDING S AGAINST THE ASSESSEE U/S. 271(1)(C) OF THE INCOME TAX ACT NOTED AS UNDER: ' PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 FOR FURNISHING INACCURATE PARTICULARS OF INCOME / CONCEALING PARTICULARS OF INCOME , STATUTORY NOTICES U/S 143(2)/142(1) ISSUED DURING THE ASSESSMENT PROCEEDI NGS ARE INITIATED SEPARATELY.' THEREAFTER, THE ASSESSING OFFICER ISSUED THE STATUT ORY NOTICE DATED 28/03/2014 U/S 274 R.W. SEC.271 OF THE ACT FOR C ONCEALING PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICU LARS OF THE INCOME. ULTIMATELY THE ASSESSING OFFICER PASSED THE PEN ALTY ORDER 26/09/2014 AND IMPOSED THE PENALTY OF RS.20,81, 32,327/- FOR FURNISHING INACCURATE PARTICULARS OF INCOME/CONCEALME NT OF PARTICULARS OF INCOME. IN THE INSTANT CASE, IT IS UNDISPUTE D FACT THAT THE AO INITIATED PENALTY PROCEEDINGS ON BOTH OF THE LIMBS AS SPECIFIED IN SECTION 271(1)(C) OF THE ACT I.E. CONCEALMENT OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME AN D THEREAFTER ISSUED THE NOTICE U/S 274 WITHOUT SPECIFYING T HE LIMB OF THE PENALTY IMPOSABLE AND FINALLY IMPOSED PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME/CONCEALMEN T OF INCOME. 6 ITA NO.339/ASR/2016 (A.Y.2011-12) J &K STATE POWER DEV. CORP. LTD. SRI VS. ACIT 7. HON'BLE APEX COURT IN CASE OF COMMISSIONER OF INCOME TAX, BANGALORE VERSUS M/S. SSA'S EMERALD MEADOWS, (2016) 73 TAXMANN.COM 248(SC) DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THE JUDGMENT { (2016) 73 TAXMANN.COM 248}, RENDERED BY HON'BLE HIGH COURT OF KARNATAKA , WHEREBY IDENTICAL ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. OPERATIVE PART OF THE DECISION MADE IN THE CASE OF M/S. SSA'S EMERALD MEADOWS (SUPRA), BY HON'BLE HIGH COURT OF KARNATAKA IS REPRODUCED BELOW :- '2. THIS APPEAL HAS BEEN FILED RAISING THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW: (1) WHETHER, OMISSION IF ASSESSING OFFICER TO EXPLICITLY MENTION THAT PENALTY PROCEEDINGS ARE BEING INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OR THAT FOR CONCEALMENT OF INCOME MAKES THE PENALTY ORDER LIABLE FOR CANCELLATION EVEN WHEN IT HAS BEEN PROVED BEYOND REASONABLE DOUBT THAT THE ASSESSEE HAD CONCEALED INCOME IN THE FACTS AND CIRCUMSTANCES OF THE CASE? (2 WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFI ED IN LAW IN. HOLDING THAT THE PENALTY NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) IS HAD IN LAW AND. INVALID INSPITE THE AMENDMENT OF SECTION 271(1 B) WITH RETROSPECTIVE EFFECT AND BY VIRTUE OF THE AMENDMENT, THE ASSESSING OFFICER HAS INITIATED THE PENALTY BY PROPERLY RECORDING THE SATISFACTION FOR THE SAME? (3) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE TRIBUNAL WAS JUSTIFIED IN DECIDING TH E APPEALS AGAINST THE REVENUE ON THE BASIS OF NOTICE ISSUED, UNDER SECTION 274 WITHOUT TAKING INTO CONSIDERATION THE ASSESSMENT ORDER WHEN THE ASSESSING OFFICER HAS SPECIFIED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME? 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT') TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 7 ITA NO.339/ASR/2016 (A.Y.2011-12) J &K STATE POWER DEV. CORP. LTD. SRI VS. ACIT 271(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OR INCOME T AX - VS - MANJUNATHA C OTTON AND G INNING F ACTORY (2013) 359 ITR 565 . 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT, THE APPEAL IS ACCORDINGLY DISMISSED.' 8. THE PENALTY PROVISIONS OF SECTION 271(1)(C) OF THE ACT ARE ATTRACTED WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME . IT IS ALSO A WELL-ACCEPTED PROPOSITION THAT THE AFORESAID TWO LIMBS OF SECTION 271(1)(C) OF THE ACT CARRY DIFFERENT MEANINGS. T HEREFORE, IT WAS IMPERATIVE FOR THE ASSESSING OFFICER TO STRIKE - OFF THE IRRELEVANT LIMB SO AS TO MAKE THE ASSESSEE AWARE AS TO WHA T IS THE CHARGE MADE AGAINST HIM SO THAT HE CAN RESPOND ACCORDINGLY. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KA R) OBSERVED THAT THE LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB UNDER WHICH IT IS BEING LEVIED. AS PER HON'BLE HIGH COUR T, WHERE THE ASSESSING OFFICER PROPOSED TO INVOKE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATELY MA RKED. THE HON'BLE HIGH COURT HELD THAT THE STANDARD PROFORMA OF NOTICE UNDER SECTION 274 OF THE ACT WITHOUT STRIKING OF THE IR RELEVANT CLAUSES WOULD LEAD TO AN INFERENCE OF NON-APPLICATION OF MIND BY THE ASSESSING OFFICER. THE HON'BLE SUPREME COURT IN THE CASE OF 8 ITA NO.339/ASR/2016 (A.Y.2011-12) J &K STATE POWER DEV. CORP. LTD. SRI VS. ACIT DILIP N. SHROFF VS. JCIT, 291 ITR 519(SC) HAS ALSO NO TICED THAT WHERE THE ASSESSING OFFICER ISSUES NOTICE UNDER SECTION 274 OF THE ACT IN THE STANDARD PROFORMA AND THE INAPPROPRIAT E WORDS ARE NOT DELETED, THE SAME WOULD POSTULATE THAT THE ASSE SSING OFFICER WAS NOT SURE AS TO WHETHER HE WAS TO PROCEED ON T HE BASIS THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. ACCO RDING TO THE HON'BLE SUPREME COURT, IN SUCH A SITUATION, LEV Y OF PENALTY SUFFERS FROM NON-APPLICATION OF MIND. 9. THE CO-ORDINATE BENCH AT AMRITSAR IN (THIRD ME MBER'S CASES) HPCL MITTAL ENERGY LTD VS ADDL CIT & HPCL MITT AL PIPELINE LTD., VS ADDL CIT (SUPRA) DECIDED THE ISSUE WH EREIN BOTH THE LIMBS OF PENALTY HAVE BEEN USED BY MENTIONIN G OBLIQUE ON CONCEALMENT OF INCOME AND FURNISHING THE PARTICULAR O F INCOME. IN THE INSTANT CASE AS WELL, THE ASSESSING OFFICER HA S PASSED THE PENALTY ORDER BY MENTIONING OBLIQUE ON LIM BS, HENCE FOR DECIDING THE INSTANT ISSUE, RELEVANT PART OF THE D ECISION OF THE TRIBUNAL IN THIRD MEMBER'S CASES(SUPRA) IS CRUCIAL AN D THEREFORE REPRODUCED HEREIN BELOW FOR THE SAKE OF BRE VITY AND READY REFERENCE :- IN VIEW OF THE FOREGOING DISCUSSION, I AM SATISFIED THAT THE PENALTY WAS WRONGLY IMPOSED AND CONFIRMED IN ALL THE FOUR APPEALS UNDER CONSIDERATION. I AGREE WITH THE LD. JM IN STRIKING DOWN ALL THE PENALTY ORDERS. THE QUESTION POSED IS, THEREFORE, ANSWERED IN AFFIRMATIVE TO THE EFFECT THAT WHERE THE SATISFACTION OF THE AO WHILE INITIATING PENALTY PROCEEDINGS U/S 271(1)(C) I.T. ACT, 1961 IS WITH REGARD TO THE ALLEGED CONCEALMENT OF INCOME BY THE ASSESSEE, WHEREAS THE IMPOSITION OF PENALTY IS FOR 9 ITA NO.339/ASR/2016 (A.Y.2011-12) J &K STATE POWER DEV. CORP. LTD. SRI VS. ACIT CONCEALMENT/FURNISHING INACCURATE PARTICULARS OF INCOME, THE LEVY OF PENALTY IS NOT SUSTAINABLE. 10. THOUGH WE ARE IN AGREEMENT WITH THE LD. D R T HAT EVERY CASE IS DISTINCT ONE AND UNIQUE IN NATURE AND MUST BE DE CIDED IN ACCORDANCE WITH PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, HOWEVER IT IS WELL SETTLED LAW THAT LITIGATION MUST CO ME TO AN END AND CONSISTENCY IS IMPERATIVE TO BE OBSERVED. QUESTION Q UA TAKING A CONTRARY VIEW TO JUDGMENTS OF CO-ORDINATE BEN CHES, THE LAW IS WELL SETTLED BY THE APEX COURT IN THE CASE OF TH E S.I. ROOPLAL AND ANR VS LT. GOVERNOR THROUGH CHIEF SECRET ARY DELHI & ORS. (APPEAL CIVIL NOS. 5363-64 OF 1997 DATE OF JUDGM ENT: 14/12/1999 {1999 SUPP (5) SCR 310}), RELEVANT PART OF WHICH IS REPRODUCED HEREIN BELOW: ' AT THE OUTSET, WE MUST EXPRESS OUR SERIOUS DISSATISFACTION IN REGARD TO THE MANNER IN WHICH A COORDINATE BENCH OF THE TRIBUNAL HAS OVERRULED, IN EFFECT, AN EARLIER JUDGMENT OF ANOTHER COORDINATE B ENCH OF THE SAME TRIBUNAL. THIS IS OPPOSED TO ALL PRINCI PLES OF JUDICIAL DISCIPLINE. IF AT ALL, THE SUBSEQUENT BENC H OF THE TRIBUNAL WAS OF THE OPINION THAT THE EARLIER VIEW T AKEN BY THE COORDINATE BENCH OF THE SAME TRIBUNAL WAS INCORRECT, IT OUGHT TO HAVE REFERRED THE MATTER TO A LARGER BENCH SO THAT THE DIFFERENCE OF OPINION BETW EEN THE TWO COORDINATE BENCHES ON THE SAME POINT COULD HAVE BEEN AVOIDED. IT IS NOT AS IF THE LATTER BENCH WAS UNAWARE OF THE JUDGMENT OF THE EARLIER BENCH BUT KNOWINGLY IT PROCEEDED TO DISAGREE WITH THE SAID JUDGMENT AGAINST ALL KNOWN RULES OF PRECEDENTS. PRECEDENTS WHICH ENUNCIATE RULES OF LAW FROM THE FOUNDATION OF ADMINISTRATION OF JUSTICE UNDER OUR SYSTEM. THIS IS A FUNDAMENTAL PRINCIPLE WHICH EVERY PRESIDING OFFICER OF A JUDICIAL FORUM OUGHT TO KNOW , FOR CONSISTENCY IN INTERPRETATION OF LAW ALONE CAN LEAD TO PUBLIC CONFIDENCE IN OUR JUDICIAL SYSTEM. THIS COUR T HAS LAID DOWN TIME AND AGAIN PRECEDENT LAW MUST BE FOLLOWED BY ALL CONCERNED; DEVIATION FROM THE SAME SHOULD BE ONLY ON A PROCEDURE KNOWN TO LAW. A 10 ITA NO.339/ASR/2016 (A.Y.2011-12) J &K STATE POWER DEV. CORP. LTD. SRI VS. ACIT SUBORDINATE COURT IS BOUNDED BY THE ENUNCIATION OF LAW MADE BY THE SUPERIOR COURTS. A COORDINATE BENCH OF A COURT CANNOT PRONOUNCE JUDGMENT CONTRARY TO DECLARATION OF LAW MADE BY ANOTHER BENCH. IT CAN ON LY REFER IT TO A LARGER BENCH IF IT DISAGREES WITH THE EARLIER PRONOUNCEMENT. THIS COURT IN THE CASE OF TRIBHUVANDAS PURSHOTTAMDAS THAKAR V. RATILAL MOTILAL PATEL , [1968] 1 SCR 455 WHILE DEALING WITH A CASE IN WHICH A JUDGE OF THE H IGH COURT HAD FAILED TO FOLLOW THE EARLIER JUDGMENT OF A LARGER B ENCH OF THE SAME COURT OBSERVED THUS: 'THE JUDGMENT OF THE FULL BENCH OF THE GUJARAT HIGH COURT WAS BINDING UPON RAJU, J. IF THE LEARNED JUDGE WAS OF THE VIEW THAT THE DECISION OF BHAGWATI, J., IN PINJARE KARIM BHAI'S CASE AND OF MACLEOD, C.J., IN HARIDAS `S CASE DID NOT LAY DO WN THE CORRECT LAW OR RULE OF PRACTICE, IT WAS OPEN TO HIM TO RECO MMEND TO THE CHIEF JUSTICE THAT THE QUESTION BE CONSIDERED BY A LARGER BENCH. JUDICIAL DECORUM, PROPRIETY AND DISCIPLINE REQUIRED THAT HE SHOULD NOT IGNORE IT OUR SYSTEM OF ADMINISTRATION O F JUSTICE AIMS AT CERTAINTY IN THE LAW AND THAT CAN BE ACHIEVED ON LY IF JUDGES DO NOT IGNORE DECISIONS BY COURTS OF COORDINATE AUTHOR ITY OR OF SUPERIOR AUTHORITY. GAJENDRAGADKAR, C.J. OBSERVED I N LALA SHRI BHAGWAN AND ANR, V. SHRI RAM CHAND AND ANR . 'IT IS HARDLY NECESSARY TO EMPHASIS THAT CONSIDERAT IONS OF JUDICIAL PROPRIETY AND DECORUM REQUIRE THAT IF A LE ARNED SINGLE JUDGE HEARING A MATTER IS INCLINED TO TAKE THE VIEW THAT THE EARLIER DECISIONS OF THE HIGH COURT, WHETHER OF A DIVISION BENCH OR OF A SINGLE JUDGE, NEED TO BE RE- CONSIDERED, LIE SHOULD NOT EMBARK UPON THAT ENQUIRY SITTING AS A SINGLE JUDGE, BUT SH OULD REFER THE MATTER TO A DIVISION BENCH, OR, IN A PROPER CASE, P LACE THE RELEVANT PAPERS BEFORE THE CHIEF JUSTICE TO ENABLE HIM TO CONSTITUTE A LARGER BENCH TO EXAMINE THE QUESTION. THAT IS THE PROPER AND TRADITIONAL WAY TO DEAL WITH SUCH MATTER S AND IT IS FOUNDED ON HEALTHY PRINCIPLES OF JUDICIAL DECORUM A ND PROPRIETY.' WE ARE INDEED SORRY TO NOTE THE ATTITUDE OF THE TRI BUNAL IN THIS CASE WHICH, AFTER NOTICING THE EARLIER JUDGMEN T OF A COORDINATE BENCH AND AFTER NOTICING THE JUDGMENT OF THIS COURT, HAS STILL THOUGHT IT FIT TO PROCEED TO TAKE A VIEW TOTALLY CONTRARY TO THE VIEW TAKEN IN THE EARLIER JUDGMENT THEREBY CREA TING A JUDICIAL UNCERTAINTY IN REGARD TO THE DECLARATION OF LAW INV OLVED IN THIS CASE. BECAUSE OF THIS APPROACH OF THE LATTER BENCH OF THE TRIBUNAL IN THIS CASE, A LOT OF VALUABLE TIME OF THE COURT I S WASTED AND PARTIES TO THIS CASE HAVE BEEN PUT TO CONSIDERABLE HARDSHIP. 8. IN OUR CONSIDERED VIEW, THE APEX COURT IN INCOME TAX, BANGALORE VERSUS M/S. SSA'S EMERALD MEADOWS (SUPRA) , THE HON'BLE HIGH COURT OF KARNATAKA IN CASE OF M/S. SSA'S EMERALD 11 ITA NO.339/ASR/2016 (A.Y.2011-12) J &K STATE POWER DEV. CORP. LTD. SRI VS. ACIT MEADOWS (SUPRA) AND IN MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) AND CO-ORDINATE BENCH IN THIRD MEMBER'S CASE I.E. HPCL MITTAL ENERGY LTD VS ADDL CIT & HPCL MITTAL PIPE LINE LTD., VS ADDL CIT (SUPRA) DEALT WITH IDENTICAL ISSUE AS INVOLVED IN THIS CASE AND THEREFORE WE WHILE RESPECTFULLY FOLLOWING THE DICTUM OF APEX COURT LAID DOWN IN S.I. ROOPLAL AND ANR VS LT. GOVER NOR THROUGH CHIEF SECRETARY DELHI & ORS.(SUPRA) QUA FOLLOWING THE PRINCIPLES OF JUDICIAL DISCIPLINE, RULES OF PRECEDENTS AND TO MAIN TAIN CONSISTENCY IN THE DECISIONS, ARE INCLINED TO FOLLOW THE AF ORESAID DECISIONS. 9. COMING TO THE INSTANT CASE, BARE PERUSAL OF THE ASSESSMENT ORDER DATED 28-03-2014, WHEREBY THE PENALTY PROCEEDINGS HAVE BEEN IMITATED AND NOTICE DATED 28-03- 2014 ISSUED U/S 274 OF THE ACT, APPARENTLY GOES TO PROVE THAT THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS IN THE ASSESSMENT ORDER AND ISSUED THE NOTICE U/S 274/271(1)(C) OF THE ACT WITHOUT SPECIFYING WHETHER THE ASSESSEE HAS CONCEALED '' THE PARTICULARS OF INCOME' OR THE ASSESSEE HAS FURNISHED ' THE INACCURATE PARTICULARS OF INCOME', SO AS TO PROVIDE ADEQUATE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE SHOW CAUSE NOTI CE. RATHER NOTICE IN THIS CASE HAS BEEN ISSUED IN A STEREOTYP ED MANNER WITHOUT APPLYING ANY MIND WHICH IS BAD IN LAW, HENCE IS NOT A VALID NOTICE SUFFICIENT TO IMPOSE PENALTY U/S 271 (1)(C) OF THE ACT. FURTHER THE ASSESSING OFFICER WHILE IMPOSING THE PENALTY ALSO, USED BOTH THE LIMBS BY MENTIONING OBLIQUE SUCH AS ' CONCEALMENT OF PARTICULARS OF INCOME/FURNISHING THE PARTI CULAR OF INCOME', THEREFORE IT GOES TO PROVE THAT EVEN THE MIN D OF THE AO, WHILE RECORDING THE SATISFACTION IN ASSESSMENT ORDER, I SSUING 12 ITA NO.339/ASR/2016 (A.Y.2011-12) J &K STATE POWER DEV. CORP. LTD. SRI VS. ACIT THE NOTICE DATED 28-03-2014 U/S 274 OF THE ACT AND WHI LE IMPOSING THE PENALTY AS WELL, WAS INDECISIVE AND UNCLEAR UNDER WHICH LIMB, THE PENALTY PROCEEDINGS HAVE TO BE INITIAT ED AND UNDER WHICH LIMB THE ASSESSEE HAD TO REPLY IN ORDER TO D EFEND ITS CASE AND UNDER WHICH LIMB THE PENALTY WARRANTED AND SUP POSED TO BE LEVIED, THEREFORE WE ARE OF THE VIEW THAT UND ER THESE FACTS AND CIRCUMSTANCE, THE PENALTY IS NOT LEVIABLE AS HELD BY THE VARIOUS COURTS INCLUDING THE APEX COURT, HENCE, WE HAVE NO HESITATION TO DELETE THE PENALTY LEVIED BY THE AO AN D AFFIRMED BY THE LD. CIT (A). 10. NOW COMING TO THE MERITS OF THE CASE, AS WE HAVE ALREADY DECIDED THE APPEAL ON LEGAL GROUND AND ALLOW ED THE APPEAL OF THE ASSESSEE BY QUASHING THE PENALTY ORDER, H ENCE DO NOT FEEL IT APPROPRIATE TO DWELL INTO THE MERITS OF THE CASE AS THE SAME SHALL AMOUNTS TO FUTILE ACADEMIC EXERCISE ONLY. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 22.07.2019. SD/- SD/- ( VIKRAM SINGH YADAV ) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 22.07.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) M/S. JAMMU & KASHMIR STATE POWER DEVELOPMENT CORPORATION LTD. EXHIBITION GROUND, SRINAGAR. (2) THE ACIT, CIRCLE-3, SRINAGAR. (3) THE CIT(A), JAMMU. (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY