Zikrullah Abbasalai Chaudhary, Pune V. Deputy Commissioner of Income-tax,

ITA 490/PUN/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6980 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 16-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV GHAI
• Section: 143(3); 153A; 132

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM / ITA NO.490/PUN/2015 / ASSESSMENT YEAR : 2005-06 M/S. ZIKRULLAH ABBASALI CHAUDHARY, S.NO.99, PLOT NO.6, YASHWANT NAGAR, TELCO BHOSARI ROAD, PIMPIRI, PUNE 411018. PAN NO.ACPPC3582Q. . / APPELLANT V/S DY. COMMISSIONER OF INCOME TAX , CIRCLE 2(3), PUNE. . / RESPONDENT / APPELLANT BY : SHRI PIYUSH BAFNA / RESPONDENT BY : SHRI SANJEEV GHAI / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL OF THE ASSESSEE IS EMANATING OUT OF THE ORDE R OF COMMISSIONER OF INCOME TAX (A) 12, PUNE DATED 10.02.2015 FOR THE ASSESSMENT YEAR 2005-06. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- / DATE OF HEARING : 23.02.2017 / DATE OF PRONOUNCEMENT: 03.03.2017 2 ITA NO.490/PUN/2015 AY.NO.2005-06 2.1 A SEARCH ACTION U/S 132 OF THE ACT WAS CONDUCTED O N 24.10.2007 AT THE RESIDENTIAL PREMISES OF THE ASSESSEE AT PIMPIRI PUNE. THEREAFTER NOTICE U/S 153A(A) WAS ISSUED ON 20.06.2 008 AND IN RESPONSE TO WHICH ASSESSEE FILED RETURN OF INCOME FOR A.Y. 2005-06 ON 12.08.2008 DECLARING TOTAL INCOME AT RS.97,58,950/-. THE CAS E WAS TAKEN UP FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRA MED U/S 143(3) R.W.S 153A OF THE ACT VIDE ORDER DT.31.12.2009 AND THE TOTAL INCOME WAS DETERMINED AT RS.1,25,09,840/- INTER-ALIA BY TREA TING THE LONG TERM CAPITAL GAINS SHOWN BY THE ASSESSEE OF RS.93,4 9,445/- AS INCOME FROM OTHER SOURCES. AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A), WHO VIDE ORDER 10.02.2015 DISMISSED THE APPEAL OF THE ASSESSEE. ON THE TREATMENT OF CAPITAL GAINS AS INCOME FROM OTHER SOURCES, AO VIDE ORDER DT.21.03 .2013 HELD THE ASSESSEE TO BE LIABLE FOR PENALTY U/S 271(1)(C) OF THE A CT AND ACCORDINGLY LEVIED A PENALTY OF RS.30,56,526/-. AGGRIEVED B Y THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A), WHO V IDE ORDER DT.10.02.2015 DISMISSED THE APPEAL OF THE ASSESSEE BY HOLD ING AS UNDER : 2.1.5 I HAVE CONSIDERED THE FACTS AND ARGUMENTS OF THE APPELLANT. THE APPELLANT HAS STATED THAT THE LEARN ED AO HAS MERELY CHANGED THE HEAD OF INCOME UNDER WHICH THE A PPELLANT HAD DECLARED INCOME. THERE IS NO CHANGE IN THE QUA NTUM OF THE ASSESSED INCOME BECAUSE OF THE CHANGE OF THE HEAD O F THE INCOME. FURTHER, THE APPELLANT AS TRULY AND FULLY FURNISHED ALL THE PARTICULARS OF INCOME AND THERE IS NEITHER A CASE O F CONCEALMENT OF INCOME NOR OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE APPELLANT FURTHER SUBMITTED THAT MERELY BECAUSE THE APPELLANTS CLAIM IS NOT ACCEPTED, IT PER SE DOES NOT MEAN THAT THE APPELLANT HAS CONCEALED INCOME OR FURNISHED INACCURATE PARTIC ULARS OF INCOME. IN THIS CONNECTION, THE APPELLANT PLACED R ELIANCE ON THE DECISION IN THE CASE OF RELIANCE PETRO PRODUCTS 323 ITR 128 (SC). THE APPELLANT ALSO PLACED RELIANCE ON THE DECISIONS OF THE HONOURABLE PUNE TRIBUNAL TO ARGUE THE ADDITION WAS SUSTAINED IN QUANTUM APPEAL, PENALTY LEVIED HAS BEEN DELETED. 2.1.6 I DO NOT AGREE WITH THE APPELLANTS EXPLANAT ION FOR THE FOLLOWING REASONS: 3 ITA NO.490/PUN/2015 AY.NO.2005-06 2.1.7 FIRSTLY, THIS IS NOT THE CASE WHERE HEAD OF THE INCOME IS CHANGED BECAUSE OF THE DIFFERENCE OF INTERPRETAT ION OF LAW BETWEEN THE ASSESSEE AND THE AO. IN THIS CASE, THE LEARNED AO HAS CHANGED THE HEAD OF INCOME OF FACTS. THE LEARN ED AO ON THE BASIS OF THE ENQUIRIES CONDUCTED BY HIM, HAS FOUND THAT THE APPELLANTS CLAIM WAS NOT GENUINE. IN FACT, AS OBS ERVED BY THE HONOURBLE ITAT, THE APPELLANT HAS CREATED SMOKESCREE N OF TRADING IN SHARES TO CONVERT HIS UNACCOUNTED MONEY INTO ACC OUNTED FUNDS. THE APPELLANTS ARGUMENT THAT PENALTY NEED NOT BE L EVIED MERELY BECAUSE THE HEAD OF INCOME IS CHANGED, WOULD HAVE B EEN VALID HAD ONLY IF THE ISSUE OF INTERPRETATION OF LAW WAS INVOLVED. HOWEVER, AS STATED, THE LEARNED AOS ACTION IS BASE D ON THE FACTUALLY INCORRECT CLAIM MADE BY THE APPELLANT. T HEREFORE, THE APPELLANTS ARGUMENT THAT MERE CHANGE OF HEAD OF IN COME AND RELIANCE ON THE CASE OF RELIANCE PETRO PRODUCTS TO ARGUE THAT MERE REJECTION OF CLAIM IS NOT SUFFICIENT TO LEVY THE PE NALTY ARE NOT APPLICABLE TO THE FACTS OF THE CASE. SECONDLY, THE DECISION RELIED ON BY THE APPELLANT IN WHICH, PENALTY WAS DELETED A FTER CONFIRMATION OF THE AMOUNT IN THE QUANTUM PENALTY, ARE NOT RELEVANT TO THE FACTS OF THE CASE. LEVY OF THE PEN ALTY U/S 271(1)(C) WOULD DEPEND ON THE FACTS OF THE EACH CASE AND THER E CANNOT BE A PRECEDENT TO BE FOLLOWED ON THE DELETION OF THE PEN ALTY EVEN AFTER SUSTAINING OF THE AMOUNT OF THE ADDITION IN THE QUA NTUM APPEAL. 2.1.8 AS FAR AS FACTS OF ARE CONCERNED, FOLLOWING F ACTUAL FEATURES OF THE CASE RE RELEVANT: 1) THE APPELLANT DID NOT CARRY OUT SHARE TRADING BEFOR E THE TRADING IN SHARES OF TANU HEALTH CARE. 2) ALTHOUGH THE COMPANIES, TANU HEALTH CARE AND COMFOR T INTECH WERE FOUND TO BE LISTED ON THE BSE, THE SHAR ES OF THESE COMPANIES WERE DORMANT WITHOUT ANY TRADING IN THEM. 3) THE ADDRESS OF TANU HEALTH CARE AS PER THE PAN DATA BASE IS OF THE CYBER CAF IN MUMBAI AND ON ACTUAL INQUIRY, IT WAS FOUND THAT THERE IS NO SUCH OFFICE AT THE GIVEN ADD RESS. THE GIVEN ADDRESS IS ONLY A MAILING ADDRESS, FROM WHERE DAK IS COLLECTED AT THE FREQUENT INTERVALS. 4) THE APPELLANT HAS PURCHASED THE SHARES IN MARCH 200 4 BUT THE PAYMENT TOWARDS THE SHARES WAS MADE ONLY AFTER THE YEAR IN APRIL 2005. THIS HAS HAPPENED DESPITE THE FACT THAT THE APPELLANT WAS NOT KNOWN TO THE BROKER. 5) THE APPELLANT DURING THE SEARCH COULD NOT SATISFACT ORILY EXPLAIN IN RESPONSE TO THE VARIOUS QUESTION ASKED T O HIM SUCH AS WHY HE PREFERRED TO DO TRANSACTIONS IN THESE SHA RES, WHEN HE HAD NEVER DONE SHARES TRANSACTIONS BEFORE. 6) THE APPELLANT DID NOT KNOW ANYTHING ABOUT THESE COM PANIES SUCH AS THEIR LINE OF BUSINESS, THEIR PRODUCTS OR T URNOVER OR PROFITABILITY ETC. HE STATED THAT HE TRANSACTED IN THE SHARES AS PER THE ADVICE OF HIS FRIEND. 7) THE HONOURABLE ITAT DID NOT ACCEPT THE APPELLANTS CONTENTION THAT HE SURRENDERED INCOME DUE TO COERCION. THE HO NOURABLE ITAT OBSERVED THAT THE APPELLANT SURRENDERED THE IN COME ONLY AFTER THE DEFAULT WAS CONFRONTED TO HIM WITH THE MO DUS OPERANDI ADOPTED BY HIM. THE HONOURABLE ITAT IN PA RA 6.9 HELD THAT AS THE APPELLANT SURRENDERED THE INCOME, THE LEARNED AO DID NOT CARRY OUT ANY FURTHER INQUIRIES. FURTHER, 4 ITA NO.490/PUN/2015 AY.NO.2005-06 SURROUNDING CIRCUMSTANCES PROVE THAT PURCHASE AND S ALE OF SHARES IS A COLOURABLE DEVICE, WHERE THE APPELLANT DID NOT CARRY OUT SHARE TRANSACTIONS EARLIER AND DID NOT KN OW THE BROKER AND MADE PAYMENT AFTER A YEAR FROM THE DATE OF SHARES PURCHASED BY HIM. 2.1.9 IN VIEW OF THE ABOVE FACTS AND FEATURES, IT IS VERY CLEAR THAT THE APPELLANT HAS KNOWINGLY MADE THE WRO NG CLAIM A INCOME EARNED FROM CAPITAL GAINS. ACCORDING TO ME, FACTS OF THE CASE LEAD TO CONCLUSION THAT THIS IS THE CASE OF CO NCEALMENT AS WELL AS OF FURNISHING INACCURATE PARTICULARS OF INC OME. THE CONCLUSION STANDS FORTIFIED WITH THE DECISION OF TH E HONOURABLE TRIBUNAL IN THE APPELLANTS CASE MODUS OPERANDI AS A COLOURFUL DEVICE. 2.1.10 IN VIEW OF THE ABOVE DISCUSSIONS, I AM CONV INCED THAT THIS IS THE FIT CASE FOR LEVY OF PENALTY 271(1 )(C). I CONFIRM THE PENALTY LEVIED OF RS.30,56,526. 3. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) HAS ERRED IN SUSTAINING THE PENALTY OVERLOOK ING THE CONVINCING AND LEGAL SUBMISSION THAT EXCEPT CHANGE IN HEAD OF INCOME THERE IS NEITHER A CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN NOT RESPECTFULLY FOLLOWING THE BINDING DECISION OF THE HON'BLE TRIBUNAL INVOLVING EXACTLY THE IDENTICAL IS SUE. THESE ORDERS ARE:- I) RATANSHI PATEL ITA NO.167/PN/12 DATED 19/9/20 13. II) KRISHNAGOPAL CHANDAK ITA NO.2465/PN/2012 DATE D 25/11/2014. 4. ASSESSEE SUBSEQUENTLY RAISED AN ADDITIONAL GROUND W HICH READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ORDERS PASSED BY THE ASSESSING OFFICER LEVYING THE PENALTY U/S 271(1)(C) IS BAD IN LAW IN AS MUCH AS THERE EXISTS TOTAL VAGU ENESS, AMBIGUITY AND NON APPLICATION OF MIND OF THE ASSESS ING OFFICER IN INITIATION AND COMPLETION OF THE PENALTY PROCEEDING S (REFER DECISION OF BOMBAY HIGH COURT IN THE CASE OF SAMSUN G PERICHERY) 5. WITH RESPECT TO THE PRAYER FOR ADMISSION OF ADDITIONAL G ROUND IT WAS SUBMITTED THAT IT BEING A LEGAL GROUND AND SINCE IT G OES TO THE ROOT OF THE ISSUE, THE ADDITIONAL GROUND BE ADMITTED. LD.D.R. DID N OT 5 ITA NO.490/PUN/2015 AY.NO.2005-06 SERIOUSLY OBJECT TO THE ADMISSION OF ADDITIONAL GROUND. C ONSIDERING THE AFORESAID SUBMISSIONS, THE ADDITIONAL GROUND IS ADMITTED . SINCE THE ADDITIONAL GROUND AND THE OTHER GROUNDS ARE WITH RE SPECT TO LEVY OF PENALTY AND ARE BEING INTER-CONNECTED, ALL THE GROUNDS A RE CONSIDERED TOGETHER. 6. ASSESSEE HAD EARNED PROFITS ON SALE OF SHARES AND HAD CLAIMED IT AS LONG TERM CAPITAL GAINS. AO WHILE FRAMING THE ASSESSMEN T ORDER HELD THAT THE TRANSACTION OF PURCHASE AND SALE OF SHARES WAS SHAM TRANSACTION AND COLOURFUL DEVISE TO CHANNELIZE THE UNACCOU NTED INCOME AND ACCORDINGLY TREATED IT AS INCOME FROM OTHER SOURCES. BEFORE US, LD.A.R. SUBMITTED THAT ASSESSEE HAD NEITHER CON CEALED NOR HAD FURNISHED INACCURATE PARTICULARS OF INCOME IN THE RETU RN OF INCOME AND IT WAS ONLY A CHANGE OF HEAD OF INCOME UNDER WHICH IT WAS ASSESSED AND THAT MERE CHANGE OF HEAD OF INCOME DOES N OT JUSTIFY LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AND FOR THIS PROPOSITION HE PLACED RELIANCE ON THE DECISION IN THE CASE OF RATANSHI DAHYA PAT EL IN ITA NO.1167/PN/2012 DT.19.09.2013 AND CHANDAK KRISHNAGOPA L MOTILAL IN ITA NO.2465/PN/2012 DT.25.11.2014. LD.A.R. FURTHER SUBMIT TED THAT THE PENALTY ORDER LEVIED BY AO IS BAD-IN-LAW, AS THER E WAS AMBIGUITY AND NON-APPLICATION OF MIND BY THE AO IN INITIATION AND COMPLETION OF PENALTY PROCEEDINGS. HE SUBMITTED THAT IN TH E ASSESSMENT ORDER, AO HAD RECORDED THE SATISFACTION TO T HE EFFECT THAT ASSESSEE HAD CONCEALED PARTICULARS OF INCOME. LD.A.R. REFER RING TO THE NOTICE U/S 274 R.W.S 271(1)(C) SUBMITTED THAT WHILE ISSUING TH E NOTICE DT.31.12.2012, THE AO HAS FAILED TO GIVE SATISFACTION AS TO WH ICH LIMB OF SECTION HAS NOT BEEN COMPLIED WITH BY THE ASSESSEE, AS THE RELEVANT PART OF THE PROFORMA NOTICE HAS NOT BEEN STRUCK OFF. HE POINTED TO THE 6 ITA NO.490/PUN/2015 AY.NO.2005-06 RELEVANT PORTION OF THE NOTICE, WHICH IS PLACED AT PAPER BO OK. HE THEREFORE SUBMITTED THAT SINCE THE AO HAS FAILED TO GIVE S ATISFACTION AS TO WHICH LIMB OF SEC.271(1)(C) HAS NOT BEEN COMPLIED WITH BY TH E ASSESSEE, THE PROCEEDINGS INITIATED IN THE CASE BY ISSUE O F NOTICE, IN WHICH APPROPRIATE PORTION HAS NOT BEEN STRUCK OFF ARE VIT IATED AND THEREFORE THE PENALTY ORDER PASSED IS INVALID AND FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY IN ITA NO.1154/2014 DT.05.01.20 17 AND THE DECISIONS OF PUNE TRIBUNAL IN THE CASE OF KANHAIYALAL JAIN VS. ACIT IN ITA NO.1201 TO 1205/PN/2014 ORDER DT.30.11.2016 AND IN THE CASE OF NANDKISHORE TULASIDAS KATORE VS. ACIT IN ITA NO. 2174 TO 2180/PN/2014 DT.14.12.2016. HE FURTHER SUBMITTED THAT TH E HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNADH A COTTON AND GINNING FACTORY REPORTED IN 359 ITR 565 HAS HELD THAT WHEN THE AO PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT, THEN T HE NOTICE HAS TO BE APPROPRIATELY MARKED. SIMILAR IS THE CASE FOR FURNISHING INACCURATE PARTICULARS OF INCOME. HE SUBMITTED THAT AS THE HIGH COURT HAS FURTHER HELD THAT THE STANDARD PROFORMA WITHO UT STRIKING OF THE RELEVANT CLAUSES WILL LEAD TO INFERENCE FOR NON-APPLICATION OF MIND BY THE AO. HE FURTHER SUBMITTED THAT IN THE PENALTY O RDER PASSED U/S 271(1)(C) OF THE ACT, AO HAS RECORDED THE SATISFACTION BY STATING THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCO ME AND THEREBY CONCEALED HIS INCOME AND SUBMITTED THAT LD. CIT(A ) IN THE ORDER DT.10.02.2015 WHILE CONFIRMING THE PENALTY ORDER PASSE D BY AO HAS HELD THAT IT WAS THE CASE OF CONCEALMENT AS WELL AS FURNISHIN G OF INACCURATE PARTICULARS OF INCOME. HE THEREFORE SUBMITTED THAT AO HAS NOT APPLIED HIS MIND WHILE RECORDING SATISFACTION AND AT THE TIME OF ISSUANCE OF NOTICE U/S 274 OF THE ACT AND HAS NOT SPECIFIE D THE CHARGE 7 ITA NO.490/PUN/2015 AY.NO.2005-06 FOR LEVY OF PENALTY AS THE AO WAS HIMSELF NOT CLEAR AS TO U NDER WHICH LIMB OF SEC.271(1)(C) PENALTY WAS LEVIABLE. HE THEREFORE SUBMITTE D THAT THE PENALTY PROCEEDINGS ARE INITIATED WITHOUT APPLICATION O F MIND BY AO AND THEREFORE THE PENALTY ORDER LEVIED BY THE AO IS BAD AND THEREFORE THE PENALTY LEVIED BE DELETED. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF AO AND LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO THE LEVYING OF PENALTY U/S 271(1)(C) OF THE ACT. 8. IT IS AN UNDISPUTED FACT THAT WHILE PASSING THE ASSES SMENT ORDER U/S 143 R.W.S. 153A, AO HAS RECORDED THE FINDING THAT AS SESSEE HAS CONCEALED PARTICULARS OF INCOME. IN THE NOTICE DT.31.12.2009 ISSUED U/S 274 OF THE ACT, AO HAS NOT STRUCK OFF THE INAPPLICABLE PORTION I.E., AS TO WHETHER IT WAS THE CASE OF CONCEALMENT OF PARTICULA RS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. WE FURTHE R FIND THAT IN THE PENALTY ORDER PASSED U/S 271(1)(C), AO HAS REC ORDED THE SATISFACTION BY STATING THAT ASSESSEE HAS FURNISHED INACC URATE PARTICULARS OF INCOME AND THAT LD. CIT(A) WHILE CONFIRMING THE PENALTY ORDER HAS CONCLUDED THAT IT WAS A CASE OF CONCEALMENT A S WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. THUS FROM THE PERUSAL OF NOTICE ISSUED U/S 274 R.W.S 271(1)(C) IT IS SEEN THAT AO IS NOT CLEAR AS TO UNDER WHAT CHARGE PENALTY HAS TO BE LEVIED U/S 2 71(1)(C) OF THE ACT AS THE NOTICE IS VAGUE AS IT FAILS TO CLEARLY SPELL OUT THE CHARGE OF LEVY OF PENALTY. WE FIND THAT ON IDENTICAL FACTS IN THE CASE OF GOLDIE JOGENDERSINGH ANAND IN ITA NO.188/PUN/2016, THE CO-ORDIN ATE BENCH OF THE TRIBUNAL HAS DELETED THE PENALTY BY HOLDING AS UNDER : 8 ITA NO.490/PUN/2015 AY.NO.2005-06 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPR ESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE A UTHORITIES BELOW. THE ASSESSEE HAS ASSAILED LEVY OF PENALTY U/ S. 271(1)(C) OF THE ACT ON ACCOUNT OF DEFECTIVE NOTICE. THE LD. AR OF THE ASSESSEE HAS POINTED THAT THE NOTICE ISSUED U/S. 274 R.W.S. 271(1)(C) IS DEFECTIVE AS IRRELEVANT PARTS OF THE PROFORMA NOTIC E HAVE NOT BEEN STRUCK OFF. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MANJUNATHA COTTON AND GINNING FACTORY REPORTED AS 359 ITR 565 HAS HELD THAT, WHE N THE ASSESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATEL Y MARKED. SIMILAR IS THE CASE FOR FURNISHING INACCURATE PARTIC ULARS OF INCOME. THE STANDARD PROFORMA WITHOUT STRIKING OF THE RELEV ANT CLAUSES WILL LEAD TO AN INFERENCE AS TO NON-APPLICATION OF MIND. IN THE PRESENT CASE WE FIND THAT AT THE TIME OF INITIATING PENALTY PROCEEDINGS THE ASSESSING OFFICER WHILE RECORDING S ATISFACTION HAS OBSERVED THAT, THE ASSESSEE HAS CONCEALED THE INCO ME AND HAS ALSO FURNISHED INACCURATE PARTICULARS OF INCOME WIT HIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. WHILE ISS UING NOTICE THE ASSESSING OFFICER HAS NOT STRUCK OFF IRRELEVANT PAR T IN THE SHOW CAUSE NOTICE ISSUED U/S. 274 AND THUS, THE RELEVANT EXTRACT OF NOTICE INDICATING CHARGE FOR LEVY OF PENALTY READS AS UNDER : HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISH ED INACCURATE PARTICULARS OF SUCH INCOME. 6. IT IS CLEARLY EVIDENT FROM THE PERUSAL OF NOTICE THAT THE ASSESSING OFFICER IS NOT CLEAR AS TO UNDER WHAT CHA RGE PENALTY HAS TO BE LEVIED U/S. 271(1)(C) OF THE ACT. THE NOT ICE IS VAGUE AS IT FAILS TO CLEARLY SPELL OUT THE CHARGE FOR LEVY OF P ENALTY. A FURTHER EXAMINATION OF THE RECORDS SHOW THAT THE OBSERVATIO NS OF THE ASSESSING OFFICER ARE INCONSISTENT WHILE RECORDING SATISFACTION AND AT THE TIME OF PASSING OF THE PENALTY ORDER. TH E ASSESSING OFFICER HAS LEVIED PENALTY FOR FURNISHING INACCURAT E PARTICULARS OF INCOME. THE ASSESSING OFFICER IS INCOHERENT IN REAS ONING FOR RECORDING SATISFACTION AND IN PASSING THE ORDER LEV YING PENALTY. 7. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COM MISSIONER OF INCOME TAX VS. SAMSON PERINCHERY (SUPRA) REITERATIN G THE VIEW OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF COMMISS IONER OF INCOME TAX VS. MANJUNATHA COTTON AND GINNING FACTOR Y (SUPRA) HAS HELD THAT 5 ITA NO. 188/PUN/2016, A.Y. 2006-07 FAILURE BY THE ASSESSING OFFICER TO UNAMBIGUOUSLY SPECIFY IN N OTICE ISSUED U/S. 274 THE CHARGE FOR LEVY OF PENALTY I.E. WHETHE R THE PENALTY IS BEING INITIATED FOR FURNISHING OF INACCURATE PARTIC ULARS OF INCOME OR FOR CONCEALMENT OF INCOME IS FATAL. IT REFLECTS NON -APPLICATION OF MIND AND RENDERS THE LEVY OF PENALTY INVALID. 8. THUS, IN THE LIGHT OF ABOVE DECISIONS AND THE FA CTS OF THE CASE, WE DIRECT THE ASSESSING OFFICER TO CANCEL THE PENAL TY. THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF THE A SSESSEE IS ALLOWED. 9. WE THEREFORE FIND THAT THE FACTS IN THE PRESENT CASE A RE IDENTICAL TO THAT OF IN THE CASE OF GOLDIE JOGENDERSINGH ANAND (SU PRA). IN VIEW OF THE AFORESAID FACTS AND IN THE ABSENCE OF ANY CONTRARY BINDING DECISION POINTED OUT BY REVENUE IN ITS SUPPORT, WE ARE OF THE VIEW THAT 9 ITA NO.490/PUN/2015 AY.NO.2005-06 SINCE THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT IS INVALID AND THEREFORE THE PROCEEDINGS ARISING HEREFROM ARE VITIAT ED AND THEREFORE CANNOT BE UPHELD AND THE PENALTY ORDER NEEDS TO BE SET ASIDE. WE ACCORDINGLY, SET ASIDE THE PENALTY ORDER PASSED AND ALLOW THE APPEAL OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON THE 3 RD DAY OF MARCH, 2017. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ! / ACCOUNTANT MEMBER PUNE; ! DATED : 3 RD DAY OF MARCH, 2017. YAMINI '#$%&'&$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5 6. CIT(CENTRAL), PUNE. CIT(A)-12, PUNE. #$% &&'(, * '(, / DR, ITAT, B PUNE; %+, - / GUARD FILE. / BY ORDER, // TRUE COPY // // TRUE COPY // // TRUE COPY // . /012 / ASSISTANT REGISTRAR, * '( , / ITAT, PUNE.