DEUTSCHE BANK AG, MUMBAI V. ASST DIT (IT) 1(2), MUMBAI

ITA 4723/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0896 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Assessment Year: 2000-2001
• Appeal Filed On: 20-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P J PARDIWALA SHRI NIRAJ SHETH
• Keywords: Principle of natural justice; Initiation of penalty proceedings
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH L , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI G. MANJUNATHA , HON'BLE ACCOUNTANT MEMBER ITA.NO. 4723 & 4724 /MUM/201 5 (A.Y: 2000 - 01 & 2001 - 02 ) DEUTSCHE BANK AG BLOCK B1, NIRLON KNOWLEDGE PARK, OFF WESTERN EXPRESS HIGHWAY, GOREGOAN ( EAST ) MUMBAI 400 063 PAN NO. AAACD 1390 F V. THE ASSISTANT DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) 1(2), RO O M NO. 119, 1 ST FLOOR , SCINDIA HOUSE, N.M. MARG, BALLARD PIER, MUMBAI 400 038 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.J. PARDIWALA SHRI NIRAJ SHETH REVENUE BY : SHRI SAMUEL DARS E DATE OF HEARING : 09.10.2017 DATE OF PRONOUNCEMENT : 05 .01.2018 O R D E R PER C. N. PRASAD (JM) 1. THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINST DIFFERENT ORDERS OF LD.CIT(A) - 55 DATED 30.03.2015 FOR THE ASSESSMENT YEARS 2000 - 01 AND 2001 02 IN SUSTAINING THE PENALTY LEV IED U/S. 271(1)(C) OF THE ACT. 2 ITA.NO.4723 & 4724 /MUM/2015 DEUTSCHE BANK AG 2. AT THE OUTSET THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT INITIATION OF PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT IS IMPROPER. LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ASSESSING OFFICER IS NOT CLEAR AS TO THE CHARGE FOR WHICH THE PENALTY IS INITIATED I.E. EITHER CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS. LD . COUNSEL FOR THE ASSESSEE REFERRIN G TO ASSESSMENT ORDER SUBMITS THAT ASSESSING OFFICER STATED THAT PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT WERE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND WHILE PASSING PENALTY ORDER PENALTY WAS LEVIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND ALSO FOR CONCEALMENT OF INCOME. 3. LD. COUNSEL FOR THE ASSESSEE FURTHER REFERRING TO NOTICE ISSUED U/S.274 R.W.S. 271(1)(C) WHICH IS PLACED AT PAGE NOS. 59A AND 57A OF THE PAPER BOOKS FILED FOR THE ASSESSMENT YEARS 2000 - 01 AND 2001 - 02 SUBMITS THAT THE ASSESSING OFFICER DID NOT SPECIFY THE CHARGE FOR WHICH THE PENALTY PROCEEDINGS WERE INITIATED. LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE NOTICE HAS BEEN ISSUED WITHOUT SPECIFYING THE CHARGE FOR WHI CH THE PENALTY IS INITIATED AS THERE IS NO STRIKING OFF OF THE LIMB IN THE NOTICE AND THEREFORE THE INITIATION ITSELF IS IMPROPER AND NOT VALID. HE PLACED RELIANCE ON THE DECISION OF THE COORDINATE BENCH IN THE CASE OF MEHERJEE CASSINATH HOLDINGS V. ACIT IN ITA.NO. 2555/MUM/2012 DATED 28.04.2017. 3 ITA.NO.4723 & 4724 /MUM/2015 DEUTSCHE BANK AG 4. LD.DR STRONGLY PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW, THE NOTICE ISSUED U/S. 274 R.W.S. 271(1)(C) OF THE ACT, AS SESSMENT ORDER AND THE PENALTY ORDERS. ON A PERUSAL OF THE NOTICE ISSUED U/S. 271(1)(C) OF THE ACT FOR INITIATION OF PROCEEDINGS WE FIND THAT THE ASSESSING OFFICER DID NOT STRIKE OFF AND SPECIFY THE CHARGE/ LIMB FOR WHICH HE IS PROPOSING TO INITIATE PENALT Y PROCEEDINGS. HOWEVER, IN THE ASSESSMENT ORDER, ASSESSING OFFICER RECORDS THAT THE PENALTY PROCEEDINGS ARE INITIATED FOR FURNISHING INA CCURATE PARTICULARS OF INCOME. 6. AN IDENTICAL SITUATION HAS BEEN CONS IDERED BY THE COORDINATE BENCH IN MEHERJEE CASSINAT H HOLDINGS V. ACIT (SUPRA) AS TO WHETHER THE ACTION OF THE ASSESSING OFFICER IN INITIATING PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT WITHOUT STRIKING OFF ONE OF THE LIMBS AND WITHOUT SPECIFYING THE SPECIFIC CHARGE IN THE NOTICE INITIATING PENALTY PROCEE DINGS FOR INACCURATE PARTICULARS OF INCOME IN THE ASSESSMENT ORDER AND THE COORDINATE BENCH CONSIDERING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V . SAMSON PERINCHERY [392 ITR 4] AND ALSO VARIOUS DECISIONS HELD THAT ACTION OF THE ASSESSING OFFICER IN NON - STRIKING OFF RELEVANT CLAUSE IN THE NOTICE SHOWS THAT THE CHARGE BEING MADE AGAINST THE ASSESSEE IS 4 ITA.NO.4723 & 4724 /MUM/2015 DEUTSCHE BANK AG NOT FIRM THEREFORE PROCEEDINGS SUFFER FROM NON - C OMPLIANCE WITH PRINCIPLES OF NATURAL JUSTICE IN AS MUCH AS THE ASSESSING OFFICER HIMSELF IS NOT SURE OF THE CHARGE AND THE ASSESSEE IS NOT MADE AWARE AS TO WHICH OF THE TWO LIMBS OF SECTION U/S. 271(1)(C) OF THE ACT HE HAS TO RESPOND. WHILE HOLDING SO THE COORDINATE BENCH OBSERVED AS UNDER: - 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 SATISFIE D THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN OTHER WORDS, WHAT SEC. 271(1)(C) OF THE ACT POSTULATES IS THAT THE PENALTY CAN BE LEVIED ON THE EXISTENCE OF ANY OF THE TWO SITUATIONS, NAM ELY, 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 2 71(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 DIS TINCTION 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 INCO ME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME HAVE DIFFERENT CONNOTATIONS, IT IS IMPERATIVE FOR 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 TH E 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 C OMPANY. A COPY OF THE SAID NOTICE HAS BEEN PLACED ON RECORD AND THE LEARNED REPRESENTATIVE CANVASSED THAT THE SAME HAS BEEN ISSUED BY THE ASSESSING OFFICER IN A STANDARD PROFORMA, WITHOUT STRIKING OUT THE IRRELEVANT CLAUSE. IN OTHER WORDS, THE NOTICE REFER S TO BOTH THE LIMBS OF SEC. 271(1)(C) OF THE ACT, NAMELY CONCEALMENT OF THE PARTICULARS OF INCOME AS WELL AS FURNISHING OF 5 ITA.NO.4723 & 4724 /MUM/2015 DEUTSCHE BANK AG INACCURATE PARTICULARS OF INCOME. QUITE CLEARLY, NON - STRIKING - OFF OF THE IRRELEVANT LIMB IN THE SAID NOTICE DOES NOT CONVEY TO THE AS SESSEE 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 CA SE 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 TH AT INAPPROPRIATE WORDS AND PARAGRAPHS WERE TO BE DELETED, BUT THE SAME HAD NOT BEEN DONE. THUS, THE ASSESSING OFFICER HIMSELF WAS NOT SURE AS TO WHETHER HE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED HIS INCOME 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 BOU ND TO COMPLY WITH THE PRINCIPLES OF NATURAL JUSTICE. (SEE MALABAR INDUSTRIAL CO. LTD. V. CIT [2000] 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 SUFFER FROM THE VICE O F 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 TH E 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 TO 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 6 ITA.NO.4723 & 4724 /MUM/2015 DEUTSCHE BANK AG PENALTY PROCEEDINGS ARE INITIATED U/S 27 1(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 SUPREME 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'BLE SUPREME COURT, WE PROCEE D 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 S HRI SAMSON PERINCHERY, ITA NOS. 1154, 953, 1097 & 1126 OF 2014 DATED 5.1.2017 (SUPRA) AND THE DECISION OF THE TRIBUNAL HOLDING LEVY OF PENALTY IN SUCH CIRCUMSTANCES BEING BAD, HA S BEEN APPROVED. 11. APART FROM THE AFORESAID, THE LD. CIT - DR MADE AN ARGUMENT BA SED 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 THE 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 COORDINATE BENCH, AFTER CONSIDERING THE JU DGMENT 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 APP LICATION 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 INACCURATE PARTICULARS OF INCOME. THE HONBL E GUJARAT HIGH COURT QUASHED THE PENALTY SINCE THE BASIS FOR THE PENALTY PROCEEDINGS DISAPPEARED WHEN IT WAS HELD THAT 7 ITA.NO.4723 & 4724 /MUM/2015 DEUTSCHE BANK AG 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 THE CHARGE FOR WHICH PENALTY PROCEEDI NGS 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 PROCEEDINGS WERE INITIATED AND ALSO ISS UED AN INCORRECT NOTICE. BOTH THE ACTS OF THE AO, IN OUR VIEW, CLEARLY SHOW THAT THE AO DID NOT APPLY HIS MIND WHEN HE ISSUED NOTICE TO THE ASSESSEE AND HE WAS NOT SURE AS TO WHAT PURPOSE THE NOTICE WAS ISSUED. THE HONBLE BOMBAY HIGH COURT HAS DISCUSSED A BOUT 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 AND AMBIGUITY IN THE NOTICE HAD ALSO PRE JUDICED 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 - 6 8 SEEMS TO BE FULLY 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 TIM E OF ISSUING P ENALTY 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 (SUPRA) IS TO PREVAIL. FOLLOWING THE DECISION OF OUR COORDINATE BENCH IN THE CASE OF DR. SARITA MILIND 8 ITA.NO.4723 & 4724 /MUM/2015 DEUTSCHE BANK AG DAVARE (SUPRA), WE HEREBY REJECT THE AFORES AID ARGUMENT OF THE LD. CIT - DR. 13. APART FROM THE AFORESAID DISCUSSION, WE MAY ALSO REFER TO THE ONE MORE SEMINAL 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 PROCEEDINGS U/S 271(1)(C) OF THE ACT ARE TO BE INITIAT ED 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 PROFORMA 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 ASSESSING OFFICER AND THERE IS NO CLEAR AND CRYSTALLISE D CHARGE BEING CONVEYED TO THE ASSESSEE U/S 271(1)(C), WHICH HAS TO BE MET BY HIM. 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 SHOWS THAT THE CHARGE BEING MADE AGAINST THE ASSESSEE QU A 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 NOT MADE AWARE AS TO WHICH OF THE TWO LIMBS OF SEC. 27 1(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 UNTENABLE AS IT SUFFERS FROM THE VICE OF NONAPPLICATION O F 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 SAMSON PERINCHERY (SUPRA). THUS, ON THIS COUNT ITSELF THE PEN ALTY 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 DEALT WITH. 9 ITA.NO.4723 & 4724 /MUM/2015 DEUTSCHE BANK AG 7. FOLLOWING THE ABOVE DECISION , SIMILAR VIEW HAS BEEN TAKEN BY THE C OORDINATE BENCH IN THE CASE OF ORBIT EN TERPRISES V. INCOME TAX OFFICER [60 ITR (TRIB.) 252]. RESPECTFULLY FOLLOWING THE SAID DECISION, WE HOLD THAT THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S. 274 R.W.S. 271(1)(C) O F THE ACT IS ON ACCOUNT OF NON - APPLICATION OF MIND AND THEREFORE ON THIS ACCOUNT ITSELF THE PENALTY IMPOSED U/S.271(1)(C) IS LIABLE TO BE DELETED. THUS, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT . AS WE HAVE HEL D THAT THE PENALTY BE DELETED ON THE PRELIMINARY POINT THE OTHER ARGUMENTS RAISED BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT BEING DEALT WITH. 8. IN THE RESULT, APPEALS FILED BY THE ASSESSEE ARE ALLOWED AS INDICATED ABOVE ORDER PRONOUNCED IN THE OPEN COURT ON THE 05 TH JANUARY , 2018 . SD/ - SD/ - ( G. MANJUNATHA ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 05 / 01/2018 GIRIDHAR , SPS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM