Sri.M.R.Somarajan, Kottayam V. The iTO, Wd-4, Kottayam

ITA 50/COCH/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6546 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-07-2019
• Assessment Year: 1995-1996
• Appeal Filed On: 10-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: T JOHN GEORGE
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice; Reasonable cause
• Section: 271(1)(c); 274; 139(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M I .T . A. NO . 50/COCH/2019 ASSESSMENT YEAR : 1995 - 96 SHRI M.R. SOMARAJAN, MAPPILAPARAMBIL,THAMPALKKAD, KANJIRAPALLY, KOTTAYAM [PAN:A CEPR 0683F] VS. THE INCOME TAX OFFICER, WARD - 4, KOTTAYAM. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) A SSESSEE BY SHRI T . JOHN GEORGE, ADV. REVENUE BY SMT. A.S. BINDHU, SR. DR D ATE OF HEARING 30 /07/2019 DATE OF PRONOUNCEMENT 01 / 0 8 /201 9 O R D E R PER CHANDRA POOJARI, AM: TH IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) , KOTTAYAM DATED 2 5 /0 6 /201 8 AND PERTAIN TO THE ASSESSMENT YEAR 1995 - 96. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS), KOTTAYAM ERRED IN CONFIRMING THE PENALTY LEVIED UNDER SECTION 271( 1 )(C) OF THE IT ACT, 1961 BY THE INCOME TAX OFFICER, WARD - 4, KOTTAYAM. HE OUGHT TO HAVE FOUND THAT SINCE THE APPELLATE ORDER HAS BEEN PASSED WITHOUT GIVING AN EFFECTIVE OPPORTUNITY OF BEING HEARD TO THE APPELLANT SINCE THERE WAS DENIAL OF NATURAL JUSTICE, THE DISPOSAL OF THE APPEAL ITSELF WAS INVALID. 2. IT IS SUBMITTED THAT AT THE TIME OF FILING THE APPEAL THE APPELLANT WAS LIVING IN K ANJIRAPPALLY, BUT BY THE END OF THE YEAR 2008 DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE APPELLANT HE HAD TO SHIFT HIS RESIDENCE TO KOCHI AND BECAUSE I.T.A. NO . 50/ COCH/201 9 2 OF THIS THE NOTICES ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS), KOTTAYAM HAVE NOT REACHED THE APPELLANT AND THAT WAS WHY THE APPEAL, HAPPENE D TO BE DECIDED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), KOTTAYAM EX PARTE. 3. THOUGH THE APPELLATE ORDER STATES THAT THE APPEAL WAS POSTED FOR HEARING ON 4 - 9 - 2015, 19 - 7 - 2016, 26 - 12 - 2017 AND 16 - 4 - 2018, NONE OF THESE NOTICES HAS BEEN RECEIVED BY THE APPELLANT, PROBABLY BECAUSE THE NOTICES HAVE BEEN SENT TO THE KANJIRAPPALLY ADDRESS. FOR THIS REASON THE APPELLANT DID NOT GET ANY OPPORTUNITY TO PRESENT HIS CASE AGAINST THE LEVY OF PENALTY U/S 271( 1 )(C) OF THE IT ACT BEFORE THE COMMISSIONER OF IN COME TAX (APPEALS). AS THERE WAS DENIAL OF NATURAL JUSTICE, IT IS PRAYED THAT THE MATTER MAY BE SENT BACK TO THE COMMISSIONER OF INCOME TAX (APPEALS) FOR FRESH DISPOSAL AS PER LAW. 4. WITHOUT PREJUDICE TO THE GROUND RELATING TO THE DENIAL OF NATURAL JUSTI CE, IT IS SUBMITTED THAT THERE WAS NO CASE FOR LEVY OF A PENALTY ON MERIT ALSO. THE ONLY DOCUMENT RELIED ON BY THE DEPARTMENT TO HOLD THAT THE APPELLANT HAS MADE A PAYMENT OF RS. 15,00,000 TO PURCHASE CERTAIN PROPERTY IN THIRUVANANTHAPURAM WAS AN AGREEMENT DATED 2 - 3 - 1995 WITH A TRUST. BUT NEITHER THE ASSESSING OFFICER NOR THE COMMISSIONER OF INCOME TAX (APPEALS) DID BOTHER TO ENQUIRE WHETHER THE SAID AGREEMENT WAS FULLY ACTED UPON AND THE SAID PROPERTY WAS TRANSFERRED TO THE APPELLANT BY THE TRUST EITHER DU RING THE COURSE OF ASSESSMENT OR DURING THE APPEAL PROCEEDINGS. ALL ALONG THE APPELLANT CONTENTED THAT HE NEVER PURCHASED THE SAID PROPERTY, BUT WAS ACTING O N BEHALF OF ANOTHER PERSON. THE DEPARTMENT NEVER TRIED TO KNOW THE TRUTH. AS A MATTER OF FACT THE A PPELLANT NEVER PAID THE CONSIDERATION OR BECAME OWNER OF THE IMPUGNED PROPERTY. 5. THOUGH THE APPELLANT COULD NOT PROPERLY PURSUE THE ASSESSMENT OR APPEAL PROCEEDINGS DUE TO A SERIES OF CALAMITIES ENCOUNTERED BY HIM AFTER THE YEAR 2008, IT IS SUBMITTED TH AT FOR THE REASONS THAT: (I) IF A PROPER ENQUIRY WAS MADE, THE DEPARTMENT COULD HAVE FOUND OUT WHO ACTUALLY PAID THE MONEY FOR FULFILLING THE TERMS OF THE AGREEMENT DATED 2 - 3 - 1995, AS THE ENTIRE MONEY COULD BE FOUND TO HAVE BEEN PAID THROUGH BANK BY SOME BODY ELSE . (II) THOUGH THE APPELLANT PLEADED WITH THE DEPARTMENT THAT IF THEY CALLED FOR THE PAY - IN - SLIPS'' FROM THE BANKS BY WHICH THE PAYMENT AS PER THE AGREEMENT WERE MADE, THEY COULD HAVE FOUND OUT THE ACTUAL PURCHASER, THE DEPARTMENT DID NOT ATTEMPT FOR THIS AND AS A RESULT THE ENTIRE PAYMENT WAS ATTRIBUTED TO THE APPELLANT AND MADE ASSESSMENT ON THE APPELLANT . (III ) A LL ALONG THE DEPARTMENT COMPELLED THE APPELLANT TO PROVE THAT HE HAS NOT MADE THE PAYMENT; IN OTHER WORDS THE DEPARTMENT WANTED THE APPELLANT TO PROVE WHAT HE DID NOT DO AS IT WAS NOT POSSIBLE OR I.T.A. NO . 50/ COCH/201 9 3 PRACTICABLE FOR A PERSON TO PROVE THAT HE HAS NOT ACTUALLY MADE ANY PAYMENT , WHEREAS , FOR A PERSON WHO HAS ACTUALLY MADE THE PAYMENT IT WAS EASY FOR HIM TO PROVE SUCH PAYMENT . (IV) IT MAY BE OBSERVED THAT THE ASSESSING OFFICER WHO WAS ONLY AN INCOME TAX OFFICER TO MAKE AN ASSESSMENT TOWARDS THE ALLEGED UNEXPLAINED INVESTMENT IN PURCHASE OF A PROPERTY, BECAUSE THE ASSESSMENT FOR A SUBSEQUENT ASST. YEAR (I.E., FOR THE ASST. YEAR 1996 - 97) WAS MAD E BY A JOINT COMMISSIONER OF INCOME TAX, WHO IS A SUPERIOR OFFICER THAN THE ASSESSING OFFICER IN WHICH AN ADDITION OF A SIMILAR NATURE WAS MADE AND THE ITO WAS BOUND TO FOLLOW THE DECISION OF HIS SUPERIOR OFFICER IN THE EARLIER ASSESSMENT ALSO, AS THE SAME WAS COMPLETED BY THE ITO AFTER THE COMPLETION OF THE SUBSEQUENT ASSESSMENT . (V) EVEN ADMITTING, WITHOUT CONCEDING THAT THE APPELLANT HAS MADE THE INITIAL PAYMENT OF RS. 3,00,000 ON THE DATE ON WHICH THE IMPUGNED AGREEMENT WAS SIGNED, THERE WAS NO EVIDEN CE TO PROVE THAT THE APPELLANT HAS ACTUALLY MADE THE REMAINING PAYMENTS, AS THE AGREEMENT NARRATED THAT SUCH REMAINING PAYMENTS WOULD BE MADE ON FUTURE DATES AND THE DEPARTMENT WAS NEVER ABLE TO P ROVE THAT THE APPELLANT HAD ACTUALLY MADE SUCH REMAINING PAY MENTS . (VI) AS A MATTER OF FACT THE APPELLANT NEVER PURCHASED THE PROPERTY AS HE DID NOT HAVE MONEY T O PURCHASE THE SAID PROPERTY AND IF A PROPER ENQUIRY WAS MADE THE DEPARTMENT COULD HAVE FOUND O UT THIS AND INSTEAD OF DOING THIS THE ENTIRE ALLEGED PURCHA SE MONEY WAS ATTRIBUTED TO THE APPELLANT AND MADE HEAVY ASSESSMENTS ON HIM . THE APPELLANT SHOULD HAVE GIVEN A BENEFIT OF DOUBT AND EXONERATED FROM THE LEVY OF PENALTY U/S 271(1) (C) AS THIS WAS N O T A FIT CASE FOR PAYMENT OF PENALTY. 6. IN THE RESUL T, THE PENALTY OF RS. 9, 00,000 LEVIED U/S 271 ( 1 )(C) MAY BE CANCELLED AND JUSTICE RENDERED . \ 3. THE ASSESSEE HAS RAISED THE ADDITIONAL GROUNDS OF APPEAL AS FOLLOWS: WITHOUT PREJUDICE TO T HE GROUNDS ALREADY TAKEN IT IS SUBMITTED THAT THE PENALTY INITIATED U/S 271(L)(C) IS INVALID FOR THE REASON THAT THE DEFAULT FOR WHICH THE PENAL ACTION HAS BEEN TAKEN HAS NOT BEEN SPECIFIED IN THE NOTICE ISSUED. THE NOTICE HAS MENTIONED BOTH THE DEFAULTS V IZ. CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. SINCE BOTH DEFAULTS HAVE BEEN MENTIONED IN THE NOTICE WITHOUT STRIKING OF THE DEFAULT NOT APPLICABLE TO THE APPELLANT, IT WAS CERTAIN THAT THE ASSESSING OFFICER I.T.A. NO . 50/ COCH/201 9 4 HIMSELF WAS NOT S URE ABOUT THE DEFAULT FOR WHICH HE WAS PROPOSING TO LEVY A PENALTY. IN THE LIGHT OF THE RECENT DECISIONS OF THE HON'BLE KARNATAKA HIGH COURT REPORTED AS 396 ITR 398 (KARN) [ MUNINAGA REDDY VS. AC IT] AND AS 396 ITR 538 (KARN) [ S. CHANDRASEKAR VS. ACIT] AND ALSO THAT OF HON'BLE TELANGANA & ANDHRA PRADESH HIGH COURT REPORTED AS 398 ITR 88 (T &AP) [ PR.CIT VS. SMT. BAISETTY REVATHI], SINCE THERE WAS NO VALID INITIATION OF PENAL PROVISIONS NO PENALTY COULD HAVE BEEN LEVIED IN THE APPELLANT'S CASE AND HENCE THE PE NALTY LEVIED MAY BE CANCELLED. 3.1 THE ASSESSEE HAS ALSO FILED A PETITION FOR ADMISSION OF THE ADDITIONAL GROUNDS OF APPEALS AS FOLLOWS: THE PETITIONER HAS FILED AN APPEAL BEFORE THIS HON'BLE BENCH AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS), KOTTAYAM CONFIRMING THE PENALTY UNDER SECTION 271(1)(C) OF THE IT ACT FOR THE ASST. YEAR 1995 - 96 AND THIS APPEAL IS NUMBERED AS ITA NO. 50/COCH/ 2019 AND THE APPEAL IS COMING UP FOR HEARING BEFORE THE BENCH ON 30 - 07 - 2019. 2. WHEN THE A PPEAL CAME UP FOR HEARING ON 6 - 6 - 2019, THE HON'BLE BENCH DIRECTED THE APPELLANT TO PRODUCE A COPY OF THE PENALTY NOTICE RECEIVED BY THE APPELLANT FOR THE ASST. YEAR UNDER APPEAL. AS MENTIONED IN THE AFFIDAVIT FILED BY THE APPELLANT ON 30 - 05 - 2019, SINCE THE APPELLANT HAD TO LEAVE HIS HOMETOWN KANJIRAPPALLY TO A RENTED HOUSE AT KOCHI IN A HURRY IN THE YEAR 2009 SOME OF THE PAPERS AND DOCUMENTS RELATING TO HIS BUSINESS INCLUDING THOSE RELATING TO INCOME TAX MATTERS ALSO WERE MISPLACED AND HENCE HE COULD NOT IM MEDIATELY TRACE OUT THE PENALTY NOTICE DIRECTED TO BE PRODUCED BY THE HON'BLE BENCH. THEREFORE THE PETITIONER TRIED TO OBTAIN A COPY OF THE SAME FROM THE ASSESSING OFFICER (INCOME TAX OFFICER, WARD - 4, KOTTAYAM). BUT THE OFFICER EXPRESSED HIS INABILITY TO FURNISH A COPY OF THE SAID PENALTY NOTICE AS AT PRESENT THE IT RECORDS ARE IN THE OFFICE OF THE SENIOR AUTHORISED REPRESENTATIVE, KOCHI. SINCE THE COPY OF THE NOTICE WAS TO BE PRODUCED BEFORE THE HON'BLE BENCH ON THE NEXT DATE OF HEARING IT WAS CONSIDERED ADVISABLE TO GET A COPY OF THE NOTICE BY MAKING A FORMAL REQUEST TO THE SENIOR AUTHORISED REPRESENTATIVE. ACCORDINGLY, ON MAKING A FORMAL REQUEST THE SENIOR AUTHORISED REPRESENTATIVE WAS PLEASED TO FURNISH A COPY OF THE NOTICE UNDER SECTION 271(1)(C) OF TH E IT ACT ISSUED TO THE PETITIONER AT THE TIME OF COMPLETION OF THE ASSESSMENT ON 22 - 03 - 2002 . A COPY OF THE NOTICE UNDER SECTION 274 READ WITH SECTION 271 DATED 22 - 03 - 2002 ALONG WITH THE COVERING LETTER RECEIVED FROM THE OFFICE OF THE SENIOR AUTHORISED REP RESENTATIVE DATED 10 - 07 - 2019 IS SUBMITTED FOR THE KIND PERUSAL OF THE HON'BLE BENCH. IN VIEW OF THE FACT THAT THE PENALTY NOTICE HAS NOT SPECIFIED THE DEFAULT FOR WHICH THE PENALTY HAS BEEN INITIATED - I.E., WHETHER IT WAS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME, AN I.T.A. NO . 50/ COCH/201 9 5 ADDITIONAL GROUND CHALLENGING THE VALIDITY OF INITIATION OF PENALTY IS BEING RAISED BY THE PETITIONER AND THE SAME IS BEING FILED ALONG WITH THIS PETITION. 3. IT IS SUBMITTED THAT IT WAS DUE TO THE FACT T HAT AT THE TIME OF FILING THIS APPEAL A COPY OF THE PENALTY NOTICE WAS NOT IMMEDIATELY AVAILABLE WITH THE PETITIONER A GROUND CHALLENGING THE VERY VALIDITY OF INITIATION OF THE PENAL PROCEEDINGS WAS NOT RAISED INITIALLY. NOW, ON GETTING COPY OF THE NOTICE THE PETITIONER WAS CONVINCED THAT THE PENAL PROCEEDINGS HAVE NOT BEEN VALIDLY INITIATED AS DECIDED BY THE COURTS (REFERRED TO IN THE ADDITIONAL GROUND OF APPEAL) AND HENCE AN ADDITIONAL GROUND HAS BEEN RAISED NOW. IT WAS NOT DUE TO ANY NEGLIGENCE OR LATCHE S SUCH A GROUND HAPPENED TO BE NOT RAISED AT THE TIME OF FILING THE APPEAL, BUT DUE TO THE CIRCUMSTANCES NARRATED ABOVE. IT IS THEREFORE PRAYED THAT THE ADDITIONAL GROUND NOW FILED MAY BE ADMITTED AND DECIDED ON MERITS AND JUSTICE RENDERED. 3.2 WE HAV E HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. WE FIND BONA FIDE REASONS IN THE ACT OF THE ASSESSEE IN NOT RAISING THE ADDITIONAL GROUND ON AN EARLIER OCCASION BY PLACING RELIANCE ON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF N ATIONAL T HERMAL P OWER C ORPORATION LTD. VS. CIT (229 ITR 383) WHEREIN IT WAS HELD THAT TRIBUNAL HAS THE DISCRETION TO ALLOW OR NOT TO ALLOW ADDITIONAL GROUND TO BE RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL. ACCORDINGLY , WE ADMIT THE ADDITIONAL GROUND FOR ADJUDICATION . 4. COMING TO THE MERIT S OF THE ADDITIONAL GROUND, THE LD. AR DREW OUR ATTENTION TO THE NOTICE ISSUED FOR IMPOSI NG PENALTY U/S. 274 OF THE ACT WHICH READS AS FOLLOWS: I.T.A. NO . 50/ COCH/201 9 6 NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME - TAX ACT, 1961 INCOME TAX OFFICER, KOTTAYAM WARD - 2 T O SHRI M.R. SOMARAJAN, AMBA RUBBER INDUSTRIES, THAMPALAKADU, KANJIRAPALLY DATED THE 22/03/2002 1. WHEREAS IN THE COU RSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 1995 - 96 IT APPEARS T O ME THAT YOU; - H AVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH ME RETURN OF INCOME WHICH YOU WERE REQUIRED TO FURNISH BY A NOTICE GIVEN UNDER SECTION 22(1)/22(2)/34 OF THE INDIAN INCOME TAX ACT, 1922 OR WHICH YOU WERE REQUIRED TO FURNISH UNDER SECTION 139(1) OR BY A NOTICE GIVEN UNDER SECTION 1 39(2)/148 OF THE INCOME TAX ACT, 1961 NODATED.OR HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH IT WITHIN THE TIME ALLOWED AND T HE MANNER REQUIRED BY THE SAID SECTION 139(1) OR BY SUCH NOTICE. HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE UNDER SECTION 22(4)/23(2) OF THE INCOME TAX ACT, 1922 OR UNDER SECTION 142(1)/142(2) OF THE INCOME TAX ACT, 1961. H AVE CONC EALED THE PARTICULARS OF YOUR INCOME OF . OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME 2. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 11 AM ON 08/04/2002 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE UNDER SEC TION 271 OF THE INCOME - TAX ACT, 1961 . IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED, BEFORE ANY SUCH ORDER IS MAD E UNDER SECTION 271. SD/ - ( INCOME - TAX OFFICER ) WARD - 2, KOTTAYAM I.T.A. NO . 50/ COCH/201 9 7 4.1 THE LD. AR SUBMITTED THAT THE PENALTY INITIATED U/S 271( 1 )(C) WAS INVALID FOR THE REASON THAT THE DEFAULT FOR WHICH THE PENAL ACTION WAS TAKEN HAS NOT BEEN SPECIFIED IN THE NOTICE ISSUED. THE NOTICE MENTIONED BOTH THE DEFAULTS VIZ. CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAD NOT STRUCK OFF THE IRRELEVANT PORTION OF THE PENALTY NOTICE WHICH WAS NOT APPLICABLE TO THE ASSESSEE AND DOES NOT CLEARLY MENTION WHETHER HE PROPOSED TO L EVY PENALTY FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 4.2 THE LD. AR RELIED ON THE RECENT JUDGMENTS OF THE KARNATAKA HIGH COURT IN THE CASE OF MUNINAGA REDDY V S. ACIT RE PORTED IN 396 ITR 398 A ND IN THE CASE OF S. C HANDRASEKAR VS. ACIT REPORTED IN 396 ITR 538 AND ALSO THAT OF TELANGANA & ANDHRA PRADESH HIGH COURT IN THE CASE OF PR.CIT VS. SMT. BAISETTY R EVATHI REPORTED IN 398 ITR 88 . H ENCE , IT WAS SUBMITTED THAT THE PENALTY LEVIED MAY BE CANCELLED. 5 . THE LD. DR SUBMITTED THAT IT WAS ONLY A TECHNICAL MISTAKE WHICH WAS NOT TO BE CONSIDERED AND THE APP EA L SHOULD BE DECIDED ON MERIT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. WE HAVE CAREFULLY GONE THROUGH THE NOTICE ISSUED U/S. 274 R .W.S. 271 OF THE ACT NARRATED IN PARA 4 OF THIS ORDER. AS SEEN FROM THE ABOVE NOTICE ISSUED U/S. 274 OF THE ACT, THE ASSESSING OFFICER HAS NOT STRUCK OUT THE IRRELEVANT PORTION OF THE NOTICE. IN OTHER WORDS HE HAS NOT SPECIFIED WHETHER HE IS LEVYING PENA LTY FOR CONCEALMENT OF I.T.A. NO . 50/ COCH/201 9 8 PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. AS HELD BY THE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. VS. M/S. SSAS EMERALD MEADOWS (2015) (11) TMI 1620 THAT THE NOTICE ISSUED BY THE ASSESSING OFFI CER U/S. 274 R.W.S 271(1)(C) IS TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 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. THIS VIEW WAS CONFIRMED BY THE SUPREME COURT IN THE SAME CASE, I.E., CIT & ANR. VS. M/S. SSAS EMERALD MEADOWS REPORTED IN (2016) (8) TMI 1145. 7 . IN VIEW OF THE ABOVE DISCUSSION, WE ARE INCLINED TO HOLD THAT THE PENALTY PROCEEDINGS INITIATED BY THE AO IS VOID AB INITIO AND ALLOW THE APPEAL OF THE ASSESSEE. SINCE WE HAVE QUASHED THE PENALTY PROCEEDINGS ITSELF, WE REFRAIN FROM ADJUDICATING THE OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 - 8 - 2019. SD/ - SD/ - (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 1 ST AUGUST , 2019 GJ COPY TO: 1 . SHRI M.R. SOMARAJAN, MAPPILAPARAMBIL,THAMPALKKAD, KANJIRAPALLY, KOTTAYAM. 2 . THE INCOME TAX OFFICER, WARD - 4, KOTTAYAM. 3 . THE COMMISSIONER OF INCOME - TAX (AP P EALS) , KOTTAYAM. 4. THE COMMISSIONER OF INCOME - TAX, KOTTAYAM . I.T.A. NO . 50/ COCH/201 9 9 5 . D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6 . GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN