SHRI BHARAT PAL SOOD, PHAGWARA V. INCOME TAX OFFICER, WARD-1, PHAGWARA

ITA 377/ASR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7106 (ITAT-AMRITSAR)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 06-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAKIL AHMAD
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Peak credit
• Section: 271(1)(c); 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR BEFORE SHRI N.K. SAINI, VICE PRESIDENT AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 377/ASR./2018 ASSESSMENT YEAR : 2009-10 SH BARAT PAL SOOD, RATTAN NIWAS, G.T. ROAD, PHAGWARA VS. THE ITO, WARD-1, PHAGWARA PAN ACJPS0851J (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SANDEEP VIJH, CA RESPONDENT BY: SH SHAKIL AHMAD, D.R DATE OF HEARING: 16.01.2019 DATE OF PRONOUNCEMENT: 17.01.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER PASSED BY THE CIT(A)-2, JALANDHAR, DATED 04.04.2018 WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE ASSESSING OFFICER U/S 271 (1) (C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'I.T. ACT'), DATED 23.11.2 015 FOR ASSESSMENT YEAR 2009-10. THE ASSESSEE ASSAILING THE ORDER OF THE C IT(A) HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ORDER U /S 271 (1) (C) WHICH IS BAD IN LAW. 2. THAT LD. CIT(A) HAS FURTHER ERRED IN SUSTAINING AN ORDER WHICH WAS PREMATURE AND BAD IN LAW. THE LD. ASSESSING OFFICER HAD PROCEEDED TO LEVY PENALTY P A G E | 2 ITA NO. 377/ASR/2018 SH BHARAT PAL SOOD, PHAGWARA WITHOUT EVEN INTIMATING THE INABILITY TO WAIT TILL THE DECISION OF THE ITAT IN QUANTUM APPEAL. THE PRINCIP LES OF NATURAL JUSTICE THUS ALSO STOOD VIOLATED. 3. THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF PENA LTY FOR CONCEALMENT AT RS. 2,75,275/- . EVEN THE ERROR IN COMPUTING THE PEAK BALANCE WHICH WAS THE BASIS OF LEVY OF PENALTY FOR CONCEALMENT HAS NOT BEEN APPRECIATED. 2. BRIEFLY STATED, THE ASSESSEE HAD FILED HIS RETUR N OF INCOME FOR ASSESSMENT YEAR 2009-10 ON 25.8.2009, DECLARING AN INCOME OF RS. 1,98,390/-. THE RETURN OF INCOME FILED BY THE ASSE SSEE WAS PROCESSED AS SUCH U/S 143(1) OF THE I.T.ACT. SUBSEQUENTLY, THE C ASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT U/S 143(2) IF THE I.T.ACT. THE ASSESSING OFFICER ASSESSED THE INCOME OF THE ASSESSEE AT RS. 22,55,590/- AFTER MAKING THE FOLLOWING ADDITIONS / DISALLOWANCES:- SR.NO. PARTICULARS AMOUNT (IN RS.) 1 ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN THE BANK ACCOUNT 18,16,500 2 ADDITION ON ACCOUNT OF INTEREST DISALLOWED U/S 36(I)(III) 88,855 3 ADDITION OF BANK INTEREST 34,242 4 ADDITION TO THE RENTAL INCOME 1,97,400 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN A PPEAL BEFORE CIT(A). THE CIT(A) AFTER DELIBERATING ON THE CONTENTIONS AD VANCED BY THE ASSESSEE ALLOWED A RELIEF OF RS. 8,97,600/- OUT OF THE ADDIT ION OF RS. 18,16,500/- P A G E | 3 ITA NO. 377/ASR/2018 SH BHARAT PAL SOOD, PHAGWARA MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS. APART THEREFROM, THE ADDITION OF RS. 1,97,400/- AND RS. 88,855/- THAT WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF RENTAL INCOME AND DISALLOWANCE OF INT EREST U/S 36(I)(III) OF THE I.T.ACT WAS DELETED BY HIM. INSOFAR, THE ADDITION O F RS. 34,242/- MADE ON ACCOUNT OF BANK INTEREST WAS CONCERNED, THE SAME WA S CONFIRMED BY THE CIT(A). IN SUM AND SUBSTANCE, THE CIT(A) SUSTAINED THE ADDITION OF RS. 9,18,900/- (OUT OF UNEXPLAINED CASH CREDITS OF RS. 18,16,500/-), AS WELL AS UPHELD THE ADDITION OF RS. 34,242/- MADE BY THE ASS ESSING OFFICER ON ACCOUNT OF BANK INTEREST. 4. THE ASSESSING OFFICER AFTER RECEIVING THE ORDER OF THE CIT(A) CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY U/S 271(1)(C) OF THE ACT MAY NOT BE IMPOSED ON HIM. THE EXPLANATION GIVEN BY THE ASSESSEE IN ORDER TO IMPRESS UPON THE ASSESSING OFFICER THAT NO PENALTY U/S 271(1)(C) OF THE I.T.ACT WAS LIABLE TO BE IMPOSED, HOWEVER, DID NOT FIND FAVOUR WITH HIM AND HE IMPOSED A PENALTY OF RS. 2,75,275/- U/S 271(1)(C ) OF THE I.T. ACT FOR CONCEALING THE PARTICULARS OF INCOME OR FILING INACCURATE PARTICULARS OF INCOME IN THE HANDS OF THE ASSESSEE. 5. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE LD. CIT(A). HOWEVER, THE CIT(A) NOT FINDING FAVOUR WITH THE CONTENTIONS ADVANCED BY THE ASSESSEE, DISMISSED THE APPEAL. 6. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF T HE CIT(A) HAD CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) OF THE ASSESSEE, AT THE OUTSET OF THE HEARI NG OF THE APPEAL, SUBMITTED P A G E | 4 ITA NO. 377/ASR/2018 SH BHARAT PAL SOOD, PHAGWARA THAT THE ASSESSING OFFICER HAD FAILED TO PUT THE AS SESSEE TO NOTICE AS REGARDS THE DEFAULT FOR WHICH PENALTY U/S 271(1)(C) WAS SOU GHT TO BE IMPOSED IN THE HANDS OF THE ASSESSEE. IN ORDER TO DRIVE HOME HIS A FORESAID CONTENTION, THE LD. AR TOOK US THROUGH THE COPY OF THE SHOW CAUSE NOTICE (FOR SHORT SCN) DATED 7.8.2015, PAGE 17 OF THE ASSESSEES PAPER BOO K (IN SHORT APB). APART THEREFORM, IT WAS AVERRED BY THE LD. AR THAT THERE WAS NO SPECIFIC MENTION OF THE DEFAULT FOR WHICH PENALTY PROCEEDINGS WERE INI TIATED BY THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT VIDE HIS ORDER PASSED U/S 143(3) OF THE ACT DATED 23.12.2011. THE LD. AR DREW OUR ATTENTION TO THE COPY OF THE ASSESSMENT ORDER WHEREIN THE ASSESSING OFFICER WHIL E FRAMING THE ASSESSMENT HAS INITIATED PENALTY PROCEEDINGS U/S 2 71 (1) (C) FOR CONCEALING /FILING INACCURATE PARTICULARS OF INCOME. THE LD. AR FURTHER DREW OUR ATTENTION TO THE SCN, DATED 23.12.2011 ISSUED U/ S 271 READ WITH SECTION 271 OF THE I.T.ACT, WHICH WAS ISSUED BY THE ASSESSI NG OFFICER ALONGWITH THE ASSESSMENT ORDER. IT WAS SUBMITTED BY THE LD. AR T HAT A PERUSAL OF THE AFORESAID SCN DATED 23.12.2011 DID NOT REVEAL THE DEFAULT FOR WHICH THE ASSESSEE WAS CALLED UPON TO EXPLAIN AS TO WHY PENAL TY MAY NOT BE IMPOSED UPON HIM US 271 (1) (C) OF THE I.T.ACT. IT WAS THE CLAIM OF THE LD. AR THAT AS THE ASSESSING OFFICER HAD TICKED BOTH THE DEFAULTS VIZ CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME, THUS, IT WAS NOT DISCERNIBLE AS TO FOR WHA T DEFAULT THE PENALTY WAS SOUGHT TO BE IMPOSED BY THE ASSESSING OFFICER UNDER THE AFORESAID STATUTORY PROVISIONS. THE LD. AR FURTHER SUBMITTED THAT THE A SSESSEE IN THE COURSE OF THE PENALTY PROCEEDINGS HAD VIDE HIS REPLY DATED 1 0.9.2015 SUBMITTED P A G E | 5 ITA NO. 377/ASR/2018 SH BHARAT PAL SOOD, PHAGWARA BEFORE THE ASSESSING OFFICER THAT THE PENALTY PROCE EDINGS INITIATED U/S 271 (1) (C) OF THE ACT MAY BE KEPT PENDING TILL THE DIS POSAL OF THE APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR. HOWEVE R, THE ASSESSING OFFICER DESPITE THE AFORESAID REQUEST ON THE PART OF THE AS SESSEE HAD PROCEEDED WITH AND VIDE HIS ORDER DATED 23.11.2015 HAD IMPOSED PEN ALTY U/S 271 (1) (C) OF THE ACT IN THE HANDS OF THE ASSESSEE. IT WAS SUBMIT TED BY THE LD. AR THAT WHERE AN APPEAL OF THE ASSESSEE AGAINST THE ADDITIO N MADE IN THE ASSESSMENT WAS PENDING BEFORE THE TRIBUNAL, AN ORDE R IMPOSING PENALTY U/S 271 (1) (C) WOULD BE PRE-MATURE AND, HENCE, NOT MAI NTAINABLE. IN SUPPORT OF HIS AFORESAID CONTENTION, THE LD. AR RELIED UPON TH E JUDGEMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF R.B. SHREE RAM DURGA PRASAD VS CIT, NAGPUR (2016) 65 TAXMAN.COM 293 (BOM.) 7. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. IT WAS SU BMITTED BY THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT 'D.R') THAT AS MULTIPLE ADDITIONS / DISALLOWANCES WERE MADE BY ASSESSING OFFICER, THERE FORE, THE LATTER HAD RIGHTLY INITIATED PENALTY PROCEEDINGS FOR BOTH THE DEFAULTS VIZ CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME 8. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSING OFFICER IN THE SCN DATED 23.12.2011 HAD EARMARKED BOTH THE DEFAULTS VIZ CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME . INTERESTINGLY, THOUGH THE ASSESSING OFFICER HAD TICKED BOTH THE DEFAULTS, HOW EVER, THE USAGE OF THE P A G E | 6 ITA NO. 377/ASR/2018 SH BHARAT PAL SOOD, PHAGWARA TERM OR USED BETWEEN THE SAID DEFAULTS CLEARLY REVEALS TH AT HE HAD FAILED TO POINT OUT THE DEFAULT FOR WHICH THE ASSESSEE WAS CA LLED UPON TO EXPLAIN AS TO WHY PENALTY U/S 271 (1) (C) MAY NOT BE IMPOSED UPO N HIM. IN OUR CONSIDERED VIEW, ON A BARE PERUSAL OF THE SCN DA TED 23/12/2011, IT CAN SAFELY BE GATHERED THAT THE ASSESSING OFFICER HIMSE LF WAS NOT AWARE AS TO FOR WHAT DEFAULT THE ASSESSEE WAS BEING PUT TO NOTICE A ND THEREIN CALLED UPON TO EXPLAIN AS TO WHY PENALTY MAY NOT BE IMPOSED UPON H IM. APART THEREFROM, THE SUBSEQUENT OPPORTUNITY NOTICE ISSUED BY THE A SSESSING OFFICER U/S 129 OF THE I.T. ACT, DATED 7.8.2015 ALSO DOES NOT MAKE ANY MENTION OF THE DEFAULT FOR WHICH THE ASSESSEE WAS CALLED UPON TO EXPLAIN AS TO WHY PENALTY MAY NOT BE IMPOSED UNDER THE AFORESAID STATUTORY PROVIS ION IN HIS HANDS. BE THAT AS IT MAY, IN OUR CONSIDERED VIEW, THE ASSESSING OF FICER HAD BLATANTLY FAILED TO PUT THE ASSESSEE TO NOTICE AS REGARDS THE DEFAUL T FOR WHICH THE PENALTY WAS SOUGHT TO BE IMPOSED UPON HIM 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND ARE PERSUADED TO SUBSCRIBE TO THE CLAIM OF THE LD. A.R THAT THE A.O HAD IN THE AFORESAID SCN, DATED 23.12.2011 AND 07.08.201 5 FAILED TO POINT OUT THE DEFAULT FOR WHICH PENALTY WAS SOUGHT TO BE IMPOSED BY HIM ON THE ASSESSEE. IN OUR CONSIDERED VIEW, AS BOTH OF THE TWO DEFAULTS ENVISAGED IN SEC. 271(1)(C) I.E CONCEALMENT OF INCOME AND FURNISHI NG OF INACCURATE PARTICULARS OF INCOME ARE SEPARATE AND DISTINCT DE FAULTS WHICH OPERATE IN THEIR INDEPENDENT AND EXCLUSIVE FIELDS, THEREFORE, IT WAS OBLIGATORY ON THE PART OF THE A.O TO HAVE CLEARLY PUT THE ASSESSEE TO NOTICE AS REGARDS THE DEFAULT FOR WHICH HE WAS CALLED UPON TO EXPLAIN AS TO WHY PENALTY UNDER SEC. P A G E | 7 ITA NO. 377/ASR/2018 SH BHARAT PAL SOOD, PHAGWARA 271(1)(C) MAY NOT BE IMPOSED ON HIM. AS OBSERVED BY US HEREINABOVE, A PERUSAL OF THE SHOW CAUSE NOTICES ISSUED IN THE P RESENT CASE BY THE A.O UNDER SEC. 274 R.W. SEC. 271(1)(C), DATED 23.12.201 1 AND 07.08.2015 CLEARLY REVEALS THAT THERE HAS BEEN NO APPLICATION OF MIND ON THE PART OF THE A.O WHILE ISSUING THE SAME. WE ARE OF A STRONG CONVICTI ON THAT THE VERY PURPOSE OF AFFORDING A REASONABLE OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE AS PER THE MANDATE OF SEC. 274(1) WOULD NOT ONLY BE FRUSTR ATED, BUT WOULD BE RENDERED REDUNDANT, IF THE ASSESSEE IS NOT CONVEYED IN CLEAR TERMS THE SPECIFIC DEFAULT FOR WHICH PENALTY UNDER THE SAID S TATUTORY PROVISION WAS SOUGHT TO BE IMPOSED. IN OUR CONSIDERED VIEW, THE I NDISPENSABLE REQUIREMENT ON THE PART OF THE A.O TO PUT THE ASSES SEE TO NOTICE AS REGARDS THE SPECIFIC CHARGE CONTEMPLATED UNDER THE AFORESAI D STATUTORY PROVISION VIZ. CONCEALMENT OF INCOME OR FURNISHING OF INACCURAT E PARTICULARS OF INCOME IS NOT MERELY AN IDLE FORMALITY, BUT IS A STATUTORY OB LIGATION CAST UPON HIM, WHICH WE FIND HAD NOT BEEN DISCHARGED IN THE PRESEN T CASE AS PER THE MANDATE OF LAW. 10. WE WOULD NOW TEST THE VALIDITY OF THE AFORESAID SHOW CAUSE NOTICES AND THE JURISDICTION EMERGING THEREFROM IN THE BACK DROP OF THE JUDICIAL PRONOUNCEMENTS ON THE ISSUE UNDER CONSIDERATION. AD MITTEDLY, THE A.O IS VESTED WITH THE POWERS TO LEVY PENALTY UNDER SEC. 2 71(1)(C) OF THE ACT, IF IN THE COURSE OF THE PROCEEDINGS HE IS SATISFIED THAT THE ASSESSEE HAD EITHER CONCEALED HIS INCOME OR FURNISHED INACCURATE PAR TICULARS OF HIS INCOME. IN OUR CONSIDERED VIEW, AS PENALTY PROCEEDINGS ARE IN THE NATURE OF QUASI CRIMINAL PROCEEDINGS, THEREFORE, THE ASSESSEE AS A MATTER OF A STATUTORY RIGHT P A G E | 8 ITA NO. 377/ASR/2018 SH BHARAT PAL SOOD, PHAGWARA IS SUPPOSED TO KNOW THE EXACT CHARGE FOR WHICH HE I S BEING CALLED UPON TO EXPLAIN THAT AS TO WHY THE SAME MAY NOT BE IMPOSED. THE NON SPECIFYING OF THE CHARGE IN THE SHOW CAUSE NOTICE NOT ONLY REFL ECTS THE NON APPLICATION OF MIND BY THE A.O, BUT THE SAME SERIOUSLY DEFEATS THE VERY PURPOSE OF GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE AS ENVISAGED UNDER SEC. 274(1) OF THE I.T ACT. WE FIND THAT THE FINE D ISTINCTION BETWEEN THE SAID TWO DEFAULTS CONTEMPLATED IN SEC. 271(1)(C) VIZ. C ONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME HA D BEEN APPRECIATED AT LENGTH BY THE HONBLE SUPREME COURT IN ITS JUDGMENTS PASSED IN THE CASE OF DILIP & SHROFF VS. JT. CIT (2007) 210 CTR (SC) 228 AND T. ASHOK PAI VS. CIT (2007) 292 ITR 11 (SC) . THE HONBLE APEX COURT IN ITS AFORESAID JUDGMENTS HAD OBSERVED THAT THE TWO EXPRESSIONS, VI Z. CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING OF INACCURAT E PARTICULARS OF INCOME HAVE DIFFERENT CONNOTATION. THE HONBLE APEX COURT BEING OF THE VIEW THAT THE NON-STRIKING OFF THE IRRELEVANT LIMB IN THE NOT ICE CLEARLY REVEALS A NON- APPLICATION OF MIND BY THE A.O, HAD OBSERVED AS UND ER:- 83. IT IS OF SOME SIGNIFICANCE THAT IN THE STANDAR D PROFORMA USED BY THE ASSESSING OFFICER IN ISSUING A NOTICE D ESPITE THE FACT THAT THE SAME POSTULATES THAT INAPPROPRIATE WO RDS AND PARAGRAPHS WERE TO BE DELETED, BUT THE SAME HAD NOT BEEN DONE. THUS, THE ASSESSING OFFICER HIMSELF WAS NOT S URE AS TO WHETHER HE HAD PROCEEDED ON THE BASIS THAT THE ASSE SSEE HAD CONCEALED HIS INCOME OR HE HAS FURNISHED INACCURATE PARTICULARS. EVEN BEFORE US, THE LEARNED ADDITIONAL SOLICITOR GENERAL WHILE PLACING RELIANCE ON THE ORDER OF ASSE SSMENT LAID EMPHASIS THAT HE HAD DEALT WITH BOTH THE SITUATIONS . 84. THE IMPUGNED ORDER, THEREFORE, SUFFERS FROM NON - APPLICATION OF MIND. IT WAS ALSO BOUND TO COMPLY WI TH THE PRINCIPLES OF NATURAL JUSTICE [SEE MALABAR INDUSTRI AL CO. LTD. VS. CIT (2000) 2 SCC 718]. P A G E | 9 ITA NO. 377/ASR/2018 SH BHARAT PAL SOOD, PHAGWARA WE ARE OF THE CONSIDERED VIEW, THAT NOW WHEN AS PER THE SETTLED POSITION OF LAW THE TWO DEFAULTS VIZ. CONCEALMENT OF INCOME A ND FURNISHING OF INACCURATE PARTICULARS OF INCOME ARE SEPARATE AND DISTINCT DEFAULTS, THEREFORE, IN CASE THE A.O SOUGHT TO HAVE PROCEEDED AGAINST THE ASSESSEE FOR EITHER OF THE SAID DEFAULTS, THEN IT WAS INCUMBENT ON HIS PART TO HAVE CLEARLY SPECIFIED HIS SAID INTENTION IN THE SHOW CAUSE NO TICE, WHICH HOWEVER WE FIND HE HAD FAILED TO DO IN THE CASE BEFORE US. THE AFORESAID FAILURE ON THE PART OF THE ASSESSEE CANNOT BE CHARACTERISED AS MER ELY A TECHNICAL DEFAULT, AS THE SAME HAS CLEARLY DIVESTED THE ASSESSEE OF HI S STATUTORY RIGHT OF AN OPPORTUNITY OF BEING HEARD AND DEFEND HIS CASE. 11. WE FIND THAT THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS (73 TAXMANN.COM 241)(KAR) FOLLOWING ITS EARLIER ORDER IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565 (KAR) HAS HELD THAT WHERE THE NOTICE ISSUED BY THE A.O UNDER SEC. 274 R.W SEC. 271(1)(C) DOES NOT SPECIFY THE LIMB OF SEC. 271(1)(C) FOR WHICH THE PENALTY PROCEEDINGS HAD BEE N INITIATED, I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURN ISHING OF INACCURATE PARTICULARS, THE SAME HAS TO BE HELD AS BAD IN LAW . THE SPECIAL LEAVE PETITION (FOR SHORT SLP) FILED BY THE REVENUE AGAINST THE AFORESAID ORDER OF THE HONBLE HIGH COURT OF KARNATAKA HAD BEEN DISMISSED BY THE HONBLE SUPREME COURT IN CIT VS. SSAS EMERALD MEADOWS (2016) 73 TAXMANN.COM 248 (SC). APART THEREFROM, WE FIND THAT A SIMILAR VIEW HAD BEEN TAKEN BY THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. SAMSON PERINCHERY (ITA NO. 1154 OF 2014; DT. 05.01.2 017)(BOM). P A G E | 10 ITA NO. 377/ASR/2018 SH BHARAT PAL SOOD, PHAGWARA 12. WE FIND THAT AS AVERRED BY THE LD. A.R., THE INDISP ENSABLE OBLIGATION ON THE PART OF THE A.O TO CLEARLY PUT THE ASSESSEE TO NOTICE OF THE CHARGE UNDER THE AFORESAID STATUTORY PROVISION VIZ. SEC. 2 71(1)(C) HAD BEEN DELIBERATED UPON BY A COORDINATE BENCH OF THE TRIBU NAL, I.E. ITAT C BENCH, MUMBAI IN THE CASE OF M/S ORBIT ENTERPRISES VS. ITO -15(2)(2), MUMBAI (ITA NO. 1596 & 1597/MUM/2014, DATED 01.09.2017). THE TR IBUNAL IN THE AFOREMENTIONED CASE HAD IN THE BACKDROP OF VARIOUS JUDICIAL PRONOUNCEMENTS CONCLUDED THAT THE FAILURE TO SPECIF Y THE CHARGE IN THE SHOW CAUSE NOTICE CLEARLY REFLECTS THE NON APPLIC ATION OF MIND BY THE A.O, AND WOULD RESULTANTLY RENDER THE ORDER PASSED UNDER SEC. 271(1)(C) IN THE BACKDROP OF THE SAID SERIOUS INFIRMITY AS INVALID A ND VOID AB INITIO. 13. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ISSUE BEFORE US AND AFTER DELIBERATING ON THE FACTS, ARE OF THE CONSIDE RED VIEW, THAT THE FAILURE ON THE PART OF THE A.O TO CLEARLY PUT THE ASSESSEE TO NOTICE AS REGARDS THE DEFAULT FOR WHICH PENALTY UNDER SEC. 271(1)(C) WAS SOUGHT TO BE IMPOSED ON HIM BY FAILING TO STRIKE OFF THE IRRELEVANT DEFAULT IN THE SCN, DATED 23.12.2011 AND 07.08.2015, HAD LEFT THE ASSESSEE GU ESSING OF THE DEFAULT FOR WHICH HE WAS BEING PROCEEDED AGAINST FOR. WE THUS I N THE BACKDROP OF OUR AFORESAID OBSERVATIONS, ARE OF A STRONG CONVICTION THAT AS THE A.O HAD CLEARLY FAILED TO DISCHARGE HIS STATUTORY OBLIGATION OF FAI RLY PUTTING THE ASSESSEE TO NOTICE AS REGARDS THE DEFAULT FOR WHICH HE WAS BEIN G PROCEEDED AGAINST, THEREFORE, THE PENALTY UNDER SEC. 271(1)(C) OF RS. 2,75,275/- IMPOSED BY HIM IN CLEAR VIOLATION OF THE MANDATE OF SEC. 274(1) OF THE ACT, CANNOT BE SUSTAINED. WE THUS FOR THE AFORESAID REASONS NOT BE ING ABLE TO PERSUADE P A G E | 11 ITA NO. 377/ASR/2018 SH BHARAT PAL SOOD, PHAGWARA OURSELVES TO SUBSCRIBE TO THE IMPOSITION OF PENALTY BY THE A.O, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) WHO HAD UPHELD THE SA ME. THE PENALTY OF RS.2,75,275/- IMPOSED BY THE A.O UNDER SEC.271(1)(C ) IS QUASHED IN TERMS OF OUR AFORESAID OBSERVATIONS. 14. AS THE PENALTY IMPOSED ON THE ASSESSEE UNDER SE C. 271(1)(C) OF THE ACT HAD BEEN QUASHED BY US FOR WANT OF JURISDICTION ON THE PART OF THE A.O, THEREFORE, WE REFRAIN FROM ADVERTING TO AND ADJUDIC ATING THE MERITS OF THE CASE. 15. THE APPEAL OF THE ASSESSEE IS ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS THE APPEAL OF THE ASSESSEE IS ALLOWED IN TERMS OF O UR AFORESAID OBSERVATIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 17.01.2019. SD/- SD/- ( N.K. SAINI) (RAVISH SOOD) VICE PRESIDENT JUDIC IAL MEMBER PLACE: JALANDHAR; DATE 17.01.2019 RKK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , DR, ITAT, CAMP BENCH AT JALANDHAR. 6. / GUARD FILE. //TRUE COPY// / BY ORDER, P A G E | 12 ITA NO. 377/ASR/2018 SH BHARAT PAL SOOD, PHAGWARA / (DY./ASSTT. REGISTRAR) / ITAT, CAMP BENCH, JALANDHAR. SR.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 16.1.19 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 17.1.19 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS 17.1.19 S R.PS/PS 6 KEPT FOR PRONOUNCEMENT ON 171.19 SR.PS/PS 7 FILE SENT TO THE BENCH CLERK 17.1.19 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DISPATCH OF ORDER