KASTURLAL SHETH, MUMBAI V. JOINT COMMISSIONER OF INCOME TAX-17(2), MUMBAI

ITA 4463/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3132 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 1997-1998
• Appeal Filed On: 12-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice; Revised return; Set aside
• Section: 271(1)(c); 142(1); 201; 274; 143(2); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI RAJESH KUMAR , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO S . 4463 TO 4466 /MUM/20 1 8 ( / ASSESSMENT YEAR S : 1997 - 98 TO 2001 - 02 ) KASTURLAL SHETH 12, S HREYAS, 2 ND FLOOR, OPPOSITE, AIR INDIA BUILDING , NARIMAN POINT, MUMBAI - 400020 . / VS. JOINT COMMISSIONER OF INCOME TAX - 17(2) AAYAKAR BHAVAN, MUMBAI. ./ ./ PAN/GIR NO. : A A GPS7531Q ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 20/11/ 201 9 / DATE OF PRONOUNCEMENT : 27 /1 1/ 2019 / O R D E R PER BENCH : THE ASSESSEE HAS FILED THE ABOVE MENTIONED APPEAL S AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 57 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y S . 1997 - 98 TO 2001 - 02 IN WHICH THE PENALTY LEVIED BY THE AO HAS BEEN ORDER ED TO BE CONFIRMED . ITA. NO.4463/M/2018 2 . THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 15.06.2018 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 57 , ASSESSEE BY : SHRI RAKESH JOTWANI (AR) REVENUE BY: MRS. (DR) ITA. NO 4463 TO 4466 /M/201 8 A.Y. 1997 - 98 TO 2001 - 02 2 MUMBAI [HEREINAFTER REFER RED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 1997 - 98 IN WHICH THE PENALTY LEVIED BY THE AO HAS BEEN ORDERED TO BE CONFIRMED . 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY U/S 271(1)(C) OF RS.1,06,746/ - IN RESPECT TO THE ADDITION U/S 68 OF THE ACT OF RS.3,55,812/ - BEING SUM OF MONEY (I.E. 9,950/ - $) INTRODUCED IN FOREIGN BANK ACCOUNT IN HSBC BANK, GENEVA. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALT ER, AMEND OR VARY THE GROUNDS BEFORE THE HEARING OF THE APPEAL. ' 4 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A N INDIAN RESIDENT AND CLAIMED TO DERIVE INCOME FROM RENT , CONSTRUCTION AND INVESTMENTS. AN INFORMATION FROM THE DDIT(INV.) UNIT - IX(3) DATED 22.01.2013 WAS RECEIVED IN WHICH IT WAS CONVEYED THAT THE ASSESSEE WAS HOLDING BANK - ACCOUNT WITH ERSTWHILE REPUBLIC NATIONAL BANK OF NEW YORK (SUISSE) SA GENEVA NOW HONGKONG SHAN GAI BANK CORPORATION (HSBC GENEVA) . THE CASE OF THE ASSESSEE WAS REOPE N ED U/S 147/148 OF THE ACT. ACCORDINGLY, NOTICE U/S 143(2) OF THE ACT WAS ISSUED AND ASSESSMENT WAS COMPLETED ON 23.02.2015 . THE ASSESSEE REPLIED THAT HE HAD PAID TAXES AND FILING THE REVISED RETURN OF INCOME. NOTICE U/S 142(1) OF THE ACT WAS ISSUED TO ASSE SSEE TO SHOW CAUSE AS TO WHY AN AMOUNT OF USD $ 10,000/ - DEPOSIT ED BY ASSESSEE IN HSBC BANK SHOULD NOT BE TAXED IN THE RELEVANT ASSESSMENT YEARS. THE ASSESSEE AGAIN FILED THE REPLY ATTACHING THE COPY OF REVISED RETURN OF ITA. NO 4463 TO 4466 /M/201 8 A.Y. 1997 - 98 TO 2001 - 02 3 INCOME IN WHICH IT WAS STATED THAT T HE ADDITIONAL INCOME IN SUM OF RS. 3,54,312/ - HAD ALREADY BEEN DECLARED. THEREAFTER, THE AO HOLD THAT AN AMOUNT OF USD9,950/ - INTRODUCED BY THE ASSESSEE WAS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT , HENCE, AN AMOUNT OF RS. 3,55,812/ - WAS ADDED TO THE INCOME OF THE ASSESSEE. THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS.3,93,884/ - . THE PENALTY PROCEEDING WAS ALSO INITIATED. THE PENALTY NOTICE WAS ISSUED . T HE AO LEVIED THE PENALTY TO THE TUNE OF RS.1,06,746/ - . FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE PENALTY , THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 5 . WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECO R D. AT THE VERY OUTSET, THE LD . REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE PENALTY NOTICE NOWHERE SPEAKS ABOUT SPECIFIC LIMB TO LEVY THE PENALTY BECAUSE THE PARTICULAR CHARGE WAS NOT TICK OFF IN THE NOTICE, THEREFORE, IN THE SAID CIRCUMSTANCES , THE PENALTY IS NOT JUSTIFIABLE HE NCE THE ORDER OF THE CIT(A) CONFIRMING THE PENALTY ORDER OF THE AO IS WRONG AGAINST LAW AND FACTS AND IS LIABLE TO BE SET ASIDE. IN SUPPORT OF THESE CONTENTIONS THE LD. REPRESENTATIVE OF THE ASSESSEE HAS PLACED RELIANCE UPON THE LAW SETTLED IN ITA. NO.1154 /M/2014 IN THE CASE OF CIT - 11 VS. SAMSON PERINCHERY AND THE ORDER OF THE ITAT, MUMBAI BENCH IN ITA. NO.2555/M/2012 VIDE ORDER DATED 28.04.2017 TITLED AS MEHERJEE CASSINATH HOLDINGS P. LTD. VS. ACIT, CIRCLE - 4(2). ITA. NO 4463 TO 4466 /M/201 8 A.Y. 1997 - 98 TO 2001 - 02 4 HOWEVER, ON THE OTHER HAND, THE LD. REPRESE NTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTIONS. THE COPY OF NOTICE DATED 13.03.2015 IS ON THE FILE IN WHICH THE ASSESSING OFFICER NOWHERE SPECIFY ANY LIMB TO LEVY THE PENALTY BECAUSE NONE OF THE CHARGE WAS TICK OFF IN THE NOTICE. IT IS NOT IN D ISPUTE THAT THE PENALTY U/S 271(C) OF THE ACT IS LEVIABLE ON ACCOUNT OF THE CONCEALMENT OF PARTICUL AR OF INCOME AND ON ACCOUNT OF FURNISHING THE INACCURATE PARTICULARS OF INCOME. BOTH HAVE DIFFERENT CONNOTATIONS. IN THIS REGARD, THE HONBLE SUPREME COURT H AS APPRECIATED THE DISTINCTION BETWEEN BOTH THE LIMB IN THE CASE DILIP N. SHROFF 161 TAXMAN 218 (SC). AS PER THE RECORD, THE ASSESSMENT ORDER SPEAKS ABOUT LEVYING THE PENALTY ON ACCOUNT OF FURNISHING THE INACCURATE PARTICULARS OF INCOME BUT THE NOTICE NOWH ERE SPECIFY ANY LIMB TO LEVY THE PENALTY. THE NOTICE IS NOT JUSTIFIABLE IN VIEW OF THE LAW SETTLED BY THE BOMBAY HIGH COURT IN THE CASE OF CIT - 11 VS. SAMSON PERINCHERY . AT THE TIME OF ARGUMENT, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ALSO PLACED RELIANC E UPON THE FINDING OF THE HONBLE ITAT IN ITA. NO. 2555/M/2012 TITLED AS MEHERJEE CASSINATH HOLDINGS P. LTD. VS. ACIT, CIRCLE - 4(2). THE RELEVANT PARA IS HEREBY REPRODUCED BELOW: - 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. SEC. 271(1)(C) OF THE ACT EMPOWERS THE ASSESSING OFFICER TO IMPOSE PENALTY TO THE EXTENT SPECIFIED IF, IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT, HE IS SATISFIED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INC OME. IN OTHER WORDS, WHAT SEC. 271(1)(C) OF THE ACT POSTULATES IS THAT THE PENALTY CAN BE LEVIED ON THE EXISTENCE OF ANY ITA. NO 4463 TO 4466 /M/201 8 A.Y. 1997 - 98 TO 2001 - 02 5 OF THE TWO SITUATIONS, NAMELY, FOR CONCEALING THE PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THEREFORE , IT IS OBVIOUS FROM THE PHRASEOLOGY OF SEC. 271(1)(C) OF THE ACT THAT THE IMPOSITION OF PENALTY IS INVITED ONLY WHEN THE CONDITIONS PRESCRIBED U/S 271(1)(C) OF THE ACT EXIST. IT IS ALSO A WELL ACCEPTED PROPOSITION THAT CONCEALMENT OF THE PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME REFERRED TO IN SEC. 271(1)(C) OF THE ACT DENOTE DIFFERENT CONNOTATIONS. IN FACT, THIS DISTINCTION HAS BEEN APPRECIATED EVEN AT THE LEVEL OF HON'BLE SUPREME COURT NOT ONLY IN THE CASE OF DILIP N. SHROFF (SUPRA) BUT ALSO IN THE CASE OF T.ASHOK PAI, 292 ITR 11 (SC). THEREFORE, IF THE TWO EXPRESSIONS, NAMELY CONCEALMENT OF THE PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME HAVE DIFFERENT CONNOTATIONS, IT IS IMPERATIVE F OR THE ASSESSEE TO BE MADE AWARE AS TO WHICH OF THE TWO IS BEING PUT AGAINST HIM FOR THE PURPOSE OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, SO THAT THE ASSESSEE CAN DEFEND ACCORDINGLY. IT IS IN THIS BACKGROUND THAT ONE HAS TO APPRECIATE THE PRELIMINARY PLEA OF ASSESSEE, WHICH IS BASED ON THE MANNER IN WHICH THE NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 10.12.2010 HAS BEEN ISSUED TO THE ASSESSEE - COMPANY. A COPY OF THE SAID NOTICE HAS BEEN PLACED ON RECORD AND THE LEARNED REPRESENTATIVE CANVASSED T HAT THE SAME HAS BEEN ISSUED BY THE ASSESSING OFFICER IN A STANDARD PROFORMA, WITHOUT STRIKING OUT THE IRRELEVANT CLAUSE. IN OTHER WORDS, THE NOTICE REFERS TO BOTH THE LIMBS OF SEC. 271(1)(C) OF THE ACT, NAMELY CONCEALMENT OF THE PARTICULARS OF INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. QUITE CLEARLY, NON - STRIKING - OFF OF THE IRRELEVANT LIMB IN THE SAID NOTICE DOES NOT CONVEY TO THE ASSESSEE AS TO WHICH OF THE TWO CHARGES IT HAS TO RESPOND. THE AFORESAID INFIRMITY IN THE NOTICE HAS BEEN SOUGHT TO BE DEMONSTRATED AS A REFLECTION OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER, AND IN SUPPORT, REFERENCE HAS BEEN MADE TO THE FOLLOWING SPECIFIC DISCUSSION IN THE ORDER OF HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA): - 83. IT IS OF SOME SIGNIFICANCE THAT IN THE STANDARD PROFORMA USED BY THE ASSESSING OFFICER IN ISSUING A NOTICE DESPITE THE FACT THAT THE SAME POSTULATES THAT INAPPROPRIATE WORDS AND PARAGRAPHS WERE TO BE DELETED, BUT THE SAME HAD NOT BEEN DONE. THUS, TH E ASSESSING OFFICER HIMSELF WAS NOT SURE AS TO WHETHER HE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED HIS INCOME ITA. NO 4463 TO 4466 /M/201 8 A.Y. 1997 - 98 TO 2001 - 02 6 OR HE HAD FURNISHED INACCURATE PARTICULARS. EVEN BEFORE US, THE LEARNED ADDITIONAL SOLICITOR GENERAL WHILE PLACING THE ORDER OF ASSESSMENT 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 WITH THE PRINCIPLES OF NATURAL JUSTICE. (SEE MALABAR INDUSTRIAL CO. LTD. V. CIT [20 00] 2 SCC 718] 9. FACTUALLY SPEAKING, THE AFORESAID PLEA OF ASSESSEE IS BORNE OUT OF RECORD AND HAVING REGARD TO THE PARITY OF REASONING LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA), THE NOTICE IN THE INSTANT CASE DOES SU FFER FROM THE VICE OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. IN FACT, A SIMILAR PROPOSITION WAS ALSO ENUNCIATED BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF M/S. SSAS EMERALD MEADOWS (SUPRA) AND AGAINST SUCH A JUDGMENT, THE SPECIAL LEAVE PETITION FILED BY THE REVENUE HAS SINCE BEEN DISMISSED BY THE HON'BLE SUPREME COURT VIDE ORDER DATED 5.8.2016, A COPY OF WHICH IS ALSO PLACED ON RECORD. 10. IN FACT, AT THE TIME OF HEARING, THE LD. CIT - DR HAS NOT DISPUTED THE FACTUAL MATRIX, BUT SOUGHT T O POINT OUT THAT THERE IS DUE APPLICATION OF MIND BY THE ASSESSING OFFICER WHICH CAN BE DEMONSTRATED FROM THE DISCUSSION IN THE ASSESSMENT ORDER, WHEREIN AFTER DISCUSSING THE REASONS FOR THE DISALLOWANCE, HE HAS RECORDED A SATISFACTION THAT PENALTY PROCEED INGS ARE INITIATED U/S 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OUR CONSIDERED OPINION, THE ATTEMPT OF THE LD. CIT - DR TO DEMONSTRATE APPLICATION OF MIND BY THE ASSESSING OFFICER IS NO DEFENCE INASMUCH AS THE HON'BLE SUPR EME COURT HAS APPROVED THE FACTUM OF NON - STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE AS REFLECTIVE OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. SINCE THE FACTUAL MATRIX IN THE PRESENT CASE CONFORMS TO THE PROPOSITION LAID DOWN BY THE HON'B LE SUPREME COURT, WE PROCEED TO REJECT THE ARGUMENTS ADVANCED BY THE LD. CIT - DR BASED ON THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. FURTHER, IT IS ALSO NOTICEABLE THAT SUCH PROPOSITION HAS BEEN CONSIDERED BY THE HON'BLE BOMBAY HIGH COURT ALSO IN THE CASE OF SHRI SAMSON PERINCHERY, ITA NOS. 1154, 953, 1097 & 1126 OF ITA. NO 4463 TO 4466 /M/201 8 A.Y. 1997 - 98 TO 2001 - 02 7 2014 DATED 5.1.2017 (SUPRA) AND THE DECISION OF THE TRIBUNAL HOLDING LEVY OF PENALTY IN SUCH CIRCUMSTANCES BEING BAD, HAS BEEN APPROVED. 11. APART FROM THE AFORESAID, TH E LD. CIT - DR MADE AN ARGUMENT BASED ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALYA & OTHERS, 216 ITR 660 (BOM.) TO CANVASS SUPPORT FOR HIS PLEA THAT NON - STRIKING OFF OF THE IRRELEVANT PORTION OF NOTICE WOULD NOT INVALIDATE T HE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. WE HAVE CAREFULLY CONSIDERED THE SAID ARGUMENT SET - UP BY THE LD. CIT - DR AND FIND THAT A SIMILAR ISSUE HAD COME UP BEFORE OUR COORDINATE BENCH IN THE CASE OF DR. SARITA MILIND DAVARE (SUPRA). OUR COORDINA TE BENCH, AFTER CONSIDERING THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALYA & ORS., (SUPRA) AS ALSO THE JUDGMENTS OF THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) AND DHARMENDRA TEXTILE PROCESSORS, 306 ITR 277 (SC) DEDUCED AS UNDER : - 12. A COMBINED READING OF THE DECISION RENDERED BY HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT. B KAUSHALYA AND OTHERS (SUPRA) AND THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF DILIP N SHROFF (SUPRA) WOULD MAKE IT CLEAR THAT THERE SHOULD BE APPLICATION OF MIND ON THE PART OF THE AO AT THE TIME OF ISSUING NOTICE. IN THE CASE OF LAKHDIR LALJI (SUPRA), THE AO ISSUED NOTICE U/S 274 FOR CONCEALMENT OF PARTICULARS OF INCOME BUT LEVIED PENALTY FOR FURNISHING INACCURAT E PARTICULARS OF INCOME. THE HONBLE GUJARAT HIGH COURT QUASHED THE PENALTY SINCE THE BASIS FOR THE PENALTY PROCEEDINGS DISAPPEARED WHEN IT WAS HELD THAT THERE WAS NO SUPPRESSION OF INCOME. THE HONBLE KERALA HIGH COURT HAS STRUCK DOWN THE PENALTY IMPOSED IN THE CASE OF N.N.SUBRAMANIA IYER VS. UNION OF INDIA (SUPRA), WHEN THERE IS NO INDICATION IN THE NOTICE FOR WHAT CONTRAVENTION THE PETITIONER WAS CALLED UPON TO SHOW CAUSE WHY A PENALTY SHOULD NOT BE IMPOSED. IN THE INSTANT CASE, THE AO DID NOT SPECIFY T HE CHARGE FOR WHICH PENALTY PROCEEDINGS WERE INITIATED AND FURTHER HE HAS ISSUED A NOTICE MEANT FOR CALLING THE ASSESSEE TO FURNISH THE RETURN OF INCOME. HENCE, IN THE INSTANT CASE, THE ASSESSING OFFICER DID NOT SPECIFY THE CHARGE FOR WHICH THE PENALTY PRO CEEDINGS WERE INITIATED AND ALSO ISSUED AN INCORRECT NOTICE. BOTH THE ACTS OF THE AO, IN OUR VIEW, CLEARLY SHOW THAT THE AO DID NOT APPLY HIS MIND WHEN HE ITA. NO 4463 TO 4466 /M/201 8 A.Y. 1997 - 98 TO 2001 - 02 8 ISSUED NOTICE TO THE ASSESSEE AND HE WAS NOT SURE AS TO WHAT PURPOSE THE NOTICE WAS ISSUED. THE HONB LE BOMBAY HIGH COURT HAS DISCUSSED ABOUT NON - APPLICATION OF MIND IN THE CASE OF KAUSHALYA (SUPRA) AND OBSERVED AS UNDER: - ... THE NOTICE CLEARLY DEMONSTRATED NON - APPLICATION OF MIND ON THE PART OF THE INSPECTING ASSISTANT COMMISSIONER. THE VAGUENESS AN D AMBIGUITY IN THE NOTICE HAD ALSO PREJUDICED THE RIGHT OF REASONABLE OPPORTUNITY OF THE ASSESSEE SINCE HE DID NOT KNOW WHAT EXACT CHARGE HE HAD TO FACE. IN THIS BACK GROUND, QUASHING OF THE PENALTY PROCEEDINGS FOR THE ASSESSMENT YEAR 1967 - 68 SEEMS TO BE F ULLY JUSTIFIED. IN THE INSTANT CASE ALSO, WE ARE OF THE VIEW THAT THE AO HAS ISSUED A NOTICE, THAT TOO INCORRECT ONE, IN A ROUTINE MANNER. FURTHER THE NOTICE DID NOT SPECIFY THE CHARGE FOR WHICH THE PENALTY NOTICE WAS ISSUED. HENCE, IN OUR VIEW, THE AO HAS FAILED TO APPLY HIS MIND AT THE TIME OF ISSUING PENALTY NOTICE TO THE ASSESSEE. 12. THE AFORESAID DISCUSSION CLEARLY BRINGS OUT AS TO THE REASONS WHY THE PARITY OF REASONING LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUP RA) IS TO PREVAIL. FOLLOWING THE DECISION OF OUR COORDINATE BENCH IN THE CASE OF DR. SARITA MILIND DAVARE (SUPRA), WE HEREBY REJECT THE AFORESAID ARGUMENT OF THE LD. CIT - DR. 13. APART FROM THE AFORESAID DISCUSSION, WE MAY ALSO REFER TO THE ONE MORE SEMIN AL FEATURE OF THIS CASE WHICH WOULD DEMONSTRATE THE IMPORTANCE OF NON - STRIKING OFF OF IRRELEVANT CLAUSE IN THE NOTICE BY THE ASSESSING OFFICER. AS NOTED EARLIER, IN THE ASSESSMENT ORDER DATED 10.12.2010 THE ASSESSING OFFICER RECORDS THAT THE PENALTY PROCE EDINGS U/S 271(1)(C) OF THE ACT ARE TO BE INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. HOWEVER, IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT OF EVEN DATE, BOTH THE LIMBS OF SEC. 271(1)(C) OF THE ACT ARE REPRODUCED IN THE PROFO RMA NOTICE AND THE IRRELEVANT CLAUSE HAS NOT BEEN STRUCK - OFF. QUITE CLEARLY, THE OBSERVATION OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND NON - STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE CLEARLY BRINGS OUT THE DIFFIDENCE ON THE PART OF ASSE SSING OFFICER AND THERE IS NO CLEAR AND CRYSTALLISED CHARGE BEING CONVEYED TO THE ASSESSEE U/S 271(1)(C), WHICH HAS TO BE MET BY HIM. ITA. NO 4463 TO 4466 /M/201 8 A.Y. 1997 - 98 TO 2001 - 02 9 AS NOTED BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA), THE QUASI - CRIMINAL PROCEEDINGS U/S 271(1)(C ) OF THE ACT OUGHT TO COMPLY WITH THE PRINCIPLES OF NATURAL JUSTICE, AND IN THE PRESENT CASE, CONSIDERING THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER ALONGSIDE HIS ACTION OF NON - STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE SHOW S THAT THE CHARGE BEING MADE AGAINST THE ASSESSEE QUA SEC. 271(1)(C) OF THE ACT IS NOT FIRM AND, THEREFORE, THE PROCEEDINGS SUFFER FROM NON - COMPLIANCE WITH PRINCIPLES OF NATURAL JUSTICE INASMUCH AS THE ASSESSING OFFICER IS HIMSELF UNSURE AND ASSESSEE IS NO T MADE AWARE AS TO WHICH OF THE TWO LIMBS OF SEC. 271(1)(C) OF THE ACT HE HAS TO RESPOND. 14. THEREFORE, IN VIEW OF THE AFORESAID DISCUSSION, IN OUR VIEW, THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 10.12.2010 IS U NTENABLE AS IT SUFFERS FROM THE VICE OF NON - APPLICATION OF MIND HAVING REGARD TO THE RATIO OF THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) AS WELL AS THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHRI SAMS ON PERINCHERY (SUPRA). THUS, ON THIS COUNT ITSELF THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT IS LIABLE TO BE DELETED. WE HOLD SO. SINCE THE PENALTY HAS BEEN DELETED ON THE PRELIMINARY POINT, THE OTHER ARGUMENTS RAISED BY THE APPELLANT ARE NOT BEING DEA LT WITH. 6. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IT IS QUITE CLEAR THAT THE PENALTY IS NOT LEVIABLE IN ACCORDANCE WITH LAW. SINCE THE PENALTY IS NOT SUSTAINABLE ON THE ISSUE OF DEFECTIVE NOTICE, THEREFORE, WE ARE NOT INCLINED TO DECIDE THE MATTE R OF CONTROVERSY ON MERITS. IN VIEW OF THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE FINDING OF THE CIT(A) IS WRONG AGAINST LAW AND FACTS AND IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW, THEREFORE, WE SET ASIDE THE FINDING OF THE CIT(A) ON TH IS ISSUE AND DELETE THE PENALTY. ITA. NOS. 4464 TO 4466/M/2018 ITA. NO 4463 TO 4466 /M/201 8 A.Y. 1997 - 98 TO 2001 - 02 10 7. THE FACTS OF THE PRESENT CASE ARE QUITE SIMILAR TO THE FACT OF THE CASE AS NARRATED ABOVE WHILE DECIDING THE APPEAL OF THE ASSESSEE BEARING ITA. NO.4463 /M/2018, THEREFORE, THERE IS NO NEED T O REPEAT THE SAME. HOWEVER, THE FIGURE IS DIFFERENT. THE MATTER OF CONTROVERSY IS ALSO THE SAME. THE FINDING GIVEN ABOVE WHILE DECIDING THE APPEAL OF T HE ASSESSEE BEARING ITA. NO.4463 /M/2018 IS QUITE APPLICABLE TO THE FACTS OF THE PRESENT CASE AS MUTATIS M UTANDIS . ACCORDINGLY, WE DELETE THE PENALTY IN THESE APPEALS ALSO AND ALLOWED THE APPEAL OF THE ASSESSEE . 8 . IN THE RESULT, THE APPEAL S FILED BY THE ASSESSEE ARE HEREBY ORDERED TO BE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 27 /11 / 2019 . SD/ - SD/ - ( RAJESH KUMAR ) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 27 /11 / 2019 V IJAY PAL SINGH/SR. PS ITA. NO 4463 TO 4466 /M/201 8 A.Y. 1997 - 98 TO 2001 - 02 11 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE CO PY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI