Hitesh Construction P.Ltd, New Delhi V. ACIT, Central Circal-06, New Delhi

ITA 5108/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8017 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 08-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BURNWAL SENIOR
• Keywords: Unexplained cash credit; Search and seizure; Opportunity of being heard; Question of law; Reasonable cause; Set aside
• Section: 271(1)(c); 153A; 201; 274; 73; 13; 153C; 132; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCE) ITA NO.5105/DEL./2017 (ASSESSMENT YEAR : 2008-09) ITA NO.5106/DEL./2017 (ASSESSMENT YEAR : 2009-10) ITA NO.5107/DEL./2017 (ASSESSMENT YEAR : 2010-11) ITA NO.5108/DEL./2017 (ASSESSMENT YEAR : 2011-12) ITA NO.5109/DEL./2017 (ASSESSMENT YEAR : 2012-13) M/S. HITESH CONSTRUCTION PVT. LTD., VS. ACIT, CENTR AL CIRCLE 6, C 30, PANCHSHEEL ENCLAVE, NEW DELHI. NEW DELHI 110 017. (PAN : AABCH8078F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.C. YADAV, ADVOCATE REVENUE BY : MS. ANIMA BURNWAL, SENIOR DR DATE OF HEARING : 12.08.2021 DATE OF ORDER : 25.08.2021 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 2 AFORESAID INTERCONNECTED APPEALS FILED BY THE ASSES SEE CHALLENGING THE IMPUGNED ORDERS PASSED BY THE LD. C IT (A) BEARING COMMON QUESTION OF LAW AND FACTS ARE BEING DISPOSED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUS SION. 2. APPELLANT, M/S. HITESH CONSTRUCTION PVT. LTD. (H EREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEALS SOUGHT TO SET ASIDE THE IMPUGNED ORDERS ALL DATED 29.06.2017 PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS)-24, NEW DEL HI CONFIRMING THE PENALTY ORDERS DATED 29.03.2017, 30. 03.2017, 29.03.2017, 29.03.2017 & 29.03.2017 PASSED UNDER SE CTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (FOR SHORT T HE ACT) QUA THE ASSESSMENT YEARS 2008-09, 2009-10, 2010-11, 2011-12 & 2012-13 RESPECTIVELY ON THE IDENTICAL GROUNDS EXCEPT THE DI FFERENCE OF AMOUNT OF PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LD. CIT (A) INTER ALIA THAT :- 1. THAT THE LD. CIT (APPEAL) HAS ERRED IN UPHOLDIN G THE PENALTY (RS.10,14,082/-, RS.35,844/-, RS.30,900/-, RS.30,900/- & RS.,30,900/- FOR AYS 2008-09, 2009-10, 2010-11, 201 1-12 & 2012-13) IMPOSED BY THE AO, INVOKING THE PROVISIONS OF SEC 271(1)( C) OF IT ACT 1961. 2. THAT THE LD. CIT (APPEAL) HAS ERRED IN UPHOLDING THE PENALTY (RS.10,14,082/-, RS.35,844/-, RS.30,900/-, RS.30,900/- & RS.,30,900/- FOR AYS 2008-09, 2009-10, 2010-11, 201 1-12 & 2012-13) WITHOUT CONSIDERING THE FACTS AND CIRCUMST ANCES OF THE CASE AND RELYING ON IRRELEVANT JUDICIAL PRONOUN CEMENTS. ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 3 3. THAT THE IMPUGNED APPELLATE ORDER IS ARBITRARY, ILLEGAL, BAD IN LAW AND IN VIOLATION OF RUDIMENTARY PRINCIPL ES OF CONTEMPORARY JURISPRUDENCE. 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF ASSESSMEN T ORDERS ALL DATED 20.06.2014 FRAMED U/S 153A OF THE ACT FOR AYS 2008-09, 2009-10, 2010-11 & 2011-12 AND U/S 143 (3) OF THE A CT FOR AY 2012-13, ASSESSMENTS WERE FRAMED AT AN INCOME OF RS.RS.4,47,19,600/- & RS.17,52,600/- FOR AYS 2008-0 9 & 2009-10 RESPECTIVELY BY MAKING ADDITIONS AS UNDER :- ASSESSMENT YEAR HEAD OF ADDITION AMOUNT (IN RS.) 2008-09 (I) DISCLOSURE IN SETTLEMENT APPLICATION 30,00,000 (II) UNEXPLAINED CASH CREDITS 1,57,93,990 (III) COMMISSION PAID TO SECURE UNEXPLAINED CASH CREDITS 4,73,816 2009-10 (IV) DISCLOSURE IN SETTLEMENT APPLICATION 1,00,000 (V) UNEXPLAINED CASH CREDITS 16,00,000 (VI) COMMISSION PAID TO SECURE UNEXPLAINED CASH CREDITS 48,000 AND AT AN INCOME OF RS1,00,000/- EACH FOR AYS 2010- 11, 2011-12 & 2011-12 RESPECTIVELY BY MAKING ADDITION OF RS.1, 00,000/- ON ACCOUNT OF DISCLOSURE MADE BY THE ASSESSEE BEFORE T HE INCOME TAX SETTLEMENT COMMISSION. PENALTY PROCEEDINGS HAVE BE EN INITIATED AGAINST THE ASSESSEE U/S 271(1)(C) OF THE ACT. DEC LINING THE ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 4 CONTENTIONS RAISED BY THE ASSESSEE, AO PROCEEDED TO LEVY THE PENALTY TO THE TUNE OF RS.10,14,082/-, RS.35,844/-, RS.30,900/-, RS.30,900/- & RS.,30,900/- FOR AYS 2008-09, 2009-10 , 2010-11, 2011-12 & 2012-13 RESPECTIVELY @ 100% OF THE TAX SO UGHT TO BE EVADED. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING APPEALS WHO HAS CONFIRMED THE PENALTY BY DIS MISSING THE SAME. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEALS. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEALS, GONE THROUGH THE DOCUMENTS RELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. BY MOVING A SEPARATE APPLICATION, ASSESSEE COMPA NY SOUGHT TO RAISE ADDITIONAL GROUND ON THE GROUND THAT THE S AME GO TO THE ROOT OF THE CASE WHICH IS AS UNDER :- ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CA SE THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT I S VOID AS THE NOTICE U/S 274 READ WITH SECTION 271 IS BAD AND DEF ECTIVE AS IT IS ISSUED WITHOUT DELETING THE APPROPRIATE CLAUSE UNDE R WHICH THE PENALTY IS PROPOSED TO BE IMPOSED IS EITHER FOR FIL ING OF INACCURATE PARTICULAR OF INCOME OR CONCEALMENT OF P ARTICULAR OF INCOME AND AS SUCH THE NOTICE IS NOT SUSTAINABLE AN D NOT CURABLE. ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 5 7. KEEPING IN VIEW THE FACT THAT THE ADDITIONAL GRO UND SOUGHT TO BE RAISED BY THE ASSESSEE, WHICH IS A LEGAL GROUND AND CAN BE RAISED AT ANY STAGE OF THE PROCEEDINGS, IS OTHERWISE NECES SARY FOR COMPLETE ADJUDICATION OF THE CONTROVERSY AT HAND, T HE APPLICATION FOR ADDITIONAL GROUND IS HEREBY ALLOWED. 8. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNED ORDERS CONTENDED INTER ALIA THAT IN ORDER TO INITIATE THE PENALTY PROCEEDINGS, THE AO HAS FAILED TO SPECIFY IN THE SHOW-CAUSE NOTI CE ISSUED U/S 271(1)(C)/274 OF THE ACT IF THE ASSESSEE HAS CONCEA LED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF I NCOME AND RELIED UPON THE DECISIONS OF HONBLE KARNATAKA HIGH COURT IN CIT VS. SSAS EMERALD MEADOWS -73 TAXMANN.COM 241 (KAR.) (REVENUES SLP DISMISSED IN 242 TAXMAN 180) AND HON BLE HIGH COURT OF DELHI IN PR. CIT VS. SAHARA INDIA LIF E INSURANCE COMPANY LTD. IN ITA 475/2019 ORDER DATED 02.08.2019 ; AND THAT ALL THESE APPEALS ARE COVERED BY ASSESSEES GR OUP COMPANY CASES WHICH WERE ALSO SEARCHED DURING SEARCH AND SE IZURE OPERATION CONDUCTED ON 06.09.2011, WHEREBY PENALTY LEVIED HAS BEEN DELETED BY THE COORDINATE BENCH OF THE TRIBUNAL IN CASE OF ITA NO5 090, 5091& 5092/DEL/2017 FOR AYS 2010-11, 2011-12 & 2012 -13 IN ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 6 RADHIKA SURGICAL PVT. LTD. VS. ACIT ORDER DATED 17. 02.2021 . HOWEVER, ON THE OTHER HAND, LD. DR FOR THE REVENUE CONTENDED THAT IT IS A CASE OF FURNISHING OF INACCURATE PARTICULAR S OF INCOME AND HAS RELIED UPON THE ORDER PASSED BY THE AO AS WELL AS C IT (A). 9. UNDISPUTEDLY, ASSESSMENTS IN ALL THE APPEALS EXC EPT THE APPEAL BEARING ITA NO.5109/DEL/2017 FOR AY 2012-13 WERE FRAMED U/S 153A OF THE ACT PURSUANT TO THE SEARCH A ND SEIZURE OPERATION CARRIED OUT U/S 132 (4) OF THE ACT IN ROC KLAND GROUP OF CASES. IT IS ALSO NOT IN DISPUTE THAT ASSESSEE COM PANY HAS INITIALLY FILED APPLICATION FOR SETTLEMENT BEFORE INCOME TAX SETTLEMENT COMMISSION WHICH WAS REJECTED AND THE ONLY ADDITION MADE IN AYS 2010-11, 2011-12 & 2011-12 WAS FOR RS.1,00,000 /- EACH ON ACCOUNT OF DISCLOSURE MADE BEFORE INCOME TAX SETTLE MENT COMMISSION. 10. IN ORDER TO PROCEED FURTHER, WE WOULD LIKE TO P ERUSE THE IDENTICAL WORDED NOTICES ISSUED BY AO U/S 274 READ WITH SECTION 271(1)(C) OF THE ACT TO INITIATE THE PENALTY PROCEE DINGS, AVAILABLE AT PAGES 11 TO 15 OF THE PAPER BOOK FOR AYS 2008-09 TO 2012-13, AND NOTICE ISSUED FOR AY 2008-09 IS EXTRACTED FOR READY PERUSAL AS UNDER :- ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 7 NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. DATE: 20.06.2014 TO M.S. HITESH CONSTRUCTION PVT. C-30, PANCHSHEEL ENCLAVE, NEW DELHI-17. WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2008-09 IT APPEARS TO ME THAT YOU:- HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE UNDER SECTION 22(4)/23(2) OF THE INDIAN INCOME TAX ACT, 1922 OR UNDER SECTION 142(1)/143(2) OF THE INCOME TAX ACT, 1961 DATED .. HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT ROO M NO.364, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTENTION, NEW DELH I AT 11.00 AM/PM ON 23.07.2014 AND SHOW CAUSE WHY AN ORD ER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE UNDER SECTION 271 OF THE INCOME TAX ACT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THR OUGH AUTHORIZED PERSON, YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY S UCH ORDER IS MADE UNDER SECTION 271(1)(C). SD/- DCIT, CC-11, NEW DELHI. 11. BARE PERUSAL OF THE NOTICES ISSUED U/S 274 READ WIT H SECTION 271(1)(C) OF THE ACT, EXTRACTED ABOVE IN ORDER TO I NITIATE THE PENALTY PROCEEDINGS AGAINST THE ASSESSEE GOES TO PROVE THAT THE AO HIMSELF WAS NOT AWARE / SURE AS TO WHETHER HE IS ISSUING NO TICE TO INITIATE THE PENALTY PROCEEDINGS EITHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 8 BY THE ASSESSEE RATHER ISSUED VAGUE AND AMBIGUOUS N OTICE BY INCORPORATING BOTH THE LIMBS OF SECTION 271(1)(C). WHEN THE CHARGE IS TO BE FRAMED AGAINST ANY PERSON SO AS TO MOVE TH E PENAL PROVISIONS AGAINST HIM/HER, HE/SHE IS REQUIRED TO B E SPECIFICALLY MADE AWARE OF THE CHARGES TO BE LEVELED AGAINST HIM /HER. 12. HONBLE APEX COURT IN CASE OF CIT VS. SSAS EMERALA MEADOWS - (2016) 73 TAXMANN.COM 248 (SC) WHILE DISMISSING THE SLP FILED BY THE REVENUE QUASHING THE PENALTY BY TH E TRIBUNAL AS WELL AS HONBLE HIGH COURT ON GROUND OF UNSPECIFIED NOTICE HAS HELD AS UNDER:- SECTION 274, READ WITH SECTION 271(1)(C), OF THE I NCOME-TAX ACT, 1961 - PENALTY - PROCEDURE FOR IMPOSITION OF (CONDI TIONS PRECEDENT) - ASSESSMENT YEAR 2009-10 - TRIBUNAL, RE LYING ON DECISION OF DIVISION BENCH OF KARNATAKA HIGH COURT RENDERED IN CASE OF CIT V. MANJUNATHA COTTON & GINNING FACTORY [2013] 359 1TR 565/218 TAXMAN 423/35 TAXMANN.COM 250, ALLO WED APPEAL OF ASSESSEE HOLDING THAT NOTICE ISSUED BY AS SESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271 (1 )(C) WAS BAD IN LAW, AS IT DID NOT SPECIFY UNDER WHICH LIMB OF SECTION 271 (1 )(C) PENALTY PROCEEDINGS HAD BEEN INITIATED, I.E., WHETHER FOR C ONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME - HIGH COURT HELD THAT MATTER WAS COVERED BY AFORESAID DECISION OF DIVISION BENCH AND, THEREFORE, THERE WA S NO SUBSTANTIAL QUESTION OF LAW ARISING FOR DETERMINATI ON - WHETHER SINCE THERE WAS NO MERIT IN SLP FILED BY REVENUE, S AME WAS LIABLE TO BE DISMISSED - HELD, YES [PARA 2] [IN FAVOUR OF ASSESSEE] 13. HONBLE DELHI HIGH COURT IN CASE OF PR. CIT VS. SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPRA) WHILE DECIDING THE IDENTICAL ISSUE HELD AS UNDER :- ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 9 21. THE RESPONDENT HAD CHALLENGED THE UPHOLDING O F THE PENALTY IMPOSED UNDER SECTION 271 (1) (C) OF THE AC T, WHICH WAS ACCEPTED BY THE ITAT. IT FOLLOWED THE DECISION OF T HE KARNATAKA HIGH COURT IN CIT V. MANJUNATHA COTTON & GINNING FA CTORY 359 ITR 565 (KAR) AND OBSERVED THAT THE NOTICE ISSU ED BY THE AO WOULD BE BAD IN LAW IF IT DID NOT SPECIFY WHICH LIM B OF SECTION 271(1) (C) THE PENALTY PROCEEDINGS HAD BEEN INITIAT ED UNDER I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE KARNATAKA HIGH COURT HAD FOLLOWED THE ABOVE JUDGMENT IN THE S UBSEQUENT ORDER IN COMMISSIONER OF INCOME TAX V. SSA'S EMERAL D MEADOWS (2016) 73 TAXMAN.COM 241 (KAR) , THE APPEAL AGAINST WHICH WAS DISMISSED BY THE SUPREME COURT OF INDIA I N SLP NO. 11485 OF2016 BY ORDER DATED 5TH AUGUST, 2016. 14. FOLLOWING THE DECISIONS RENDERED IN THE CASES O F CIT VS. SSAS EMERALA MEADOWS AND PR. CIT VS. SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT WHEN THE NOTICE ISSUED BY THE AO IS BAD IN LAW BEING VAGUE AND AMBIGUOUS HAVING NOT SPECIFIED UNDER WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS INITI ATED U/S 271(1)(C) ARE NOT SUSTAINABLE. 15. EVEN THE AO HAS FAILED TO APPLY HIS MIND AT THE TIME OF RECORDING SATISFACTION AT THE TIME OF FRAMING ASSES SMENT TO INITIATE THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AS TO UNDER WHICH LIMB OF SECTION 271(1)(C) I.E. FOR CONCEALING PARTI CULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME , PENALTY PROCEEDINGS HAVE BEEN SOUGHT TO BE INITIATED RATHER WRITTEN VAGUE AND AMBIGUOUS SATISFACTION BY RECORDING THAT, PENA LTY PROCEEDINGS ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 10 U/S 271(1)(C) ARE INITIATED. SO, INITIATING PENAL TY PROCEEDINGS ON THE BASIS OF VAGUE AND AMBIGUOUS SATISFACTION RATHE R NO SATISFACTION ARE BAD IN LAW AND AS SUCH NOT SUSTAI NABLE. 16. IDENTICAL ISSUE AS TO LEVY THE PENALTY ON THE B ASIS OF IDENTICAL ADDITIONS HAS ALREADY BEEN DECIDED BY THE COORDINATE BENCH OF THE TRIBUNAL IN CASE OF RADHIKA SURGICAL PVT. LTD. (SUPRA) IN FAVOUR OF THE ASSESSEES GROUP COMPANY WHICH WAS ALSO SEAR CHED DURING THE SEARCH AND SEIZURE OPERATION CONDUCTED ON O6.09 .2011 BY RETURNING FOLLOWING FINDINGS :- 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. WE FIND THAT THE IDENTICAL ISSUE AROSE IN THE CASE OF THE ASSESSEE IN A.Y. 2008-09 AND THE CO-ORDINATE BENCH OF TRIBUNAL IN ITA NO. 5088/DEL/2017 FOR A.Y. 2008-09 VIDE ORDER DATED 21. 01.2021 HAS DELETED THE PENALTY BY OBSERVING AS UNDER: 3. SEARCH AND SEIZURE ACTION U/S 132(4) OF THE INCOME TAX ACT, 1961 (HEREAFTER REFERRED TO AS THE THE ACT) WAS CARRIED OUT IN THE ROCKLAND GROUP OF CASE S ON 06.09.2011. SUBSEQUENT TO THE SEARCH AND SEIZURE AC TION, ASSESSMENT PROCEEDINGS WERE CARRIED OUT U/S 153C R. W.S. 143(3), BY ISSUE OF NOTICE DATED 05.08.2013 TO THE APPELLANT TO FILE THE RETURN OF INCOME. IN RESPONSE , THE ASSESSEE FILED RETURN OF INCOME ON 10.09.2013, DISC LOSING THE TOTAL INCOME AS NIL. SUBSEQUENTLY, THE ASSESSEE FILED AN APPLICATION FOR SETTLEMENT U/S 245C OF THE ACT B EFORE THE INCOME TAX SETTLEMENT COMMISSION IN THE CAPACIT Y OF A RELATED PERSON, RELATED TO THE OTHER ASSESSEES OF THE ROCKLAND GROUP WHO HAD ALSO FILED SETTLEMENT APPLICATIONS AS SPECIFIED PERSON' U/S 245C(I) PROV ISO (I). HOWEVER, THE ASSESSEE'S APPLICATION WAS REJECTED BY THE INCOME TAX SETTLEMENT COMMISSION VIDE THEIR ORDER D ATED 23.04.2013, WHEREIN THE COMMISSION HELD THAT THE ASSESSEE DOES NOT QUALIFY FOR ADMISSION AS A PERSON ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 11 RELATED TO TO THE SPECIFIED PERSON. THE ASSESSE E FILED A WRIT PETITION BEFORE THE HONBLE DELHI HIGH COURT, CHALLENGING THE REJECTION ORDER OF THE SETTLEMENT COMMISSION, BUT THE PETITION WAS DISMISSED BY THE HONBLE DELHI HIGH COURT ON 20.10.2015. MEANWHILE, THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER MAKIN G THE FOLLOWING ADDITIONS OVER AND ABOVE THE INCOME RETUR NED BY THE ASSESSEE: A.Y. HEAD OF ADDITION AMOUNT (IN RS.) 2008-09 (I) DISCLOSURE IN SETTLEMENT APPLICATION 30,00,000/- (II) UNEXPLAINED CASH CREDITS 1,79,56,880/- (III) COMMISSION PAID TO SECURE UNEXPLAINED CASH CREDITS 5,38,706/- THE ASSESSEE FILED APPEAL AGAINST ALL THE ABOVE HEA DS OF ADDITIONS. IN THE APPEAL AGAINST THE QUANTUM ADDITI ONS, THE FOLLOWING AMOUNTS WERE CONFIRMED IN FIRST APPEA L. A.Y. HEAD OF ADDITION AMOUNT (IN RS.) 2008-09 (I) DISCLOSURE IN SETTLEMENT APPLICATION 30,00,000/- (II) UNEXPLAINED CASH CREDITS 2,26,000/- (III) COMMISSION PAID TO SECURE UNEXPLAINED CASH CREDITS 1,79,569/- AFTER GIVING EFFECT TO THE ORDER OF CIT(A), THE ASS ESSING OFFICER AFTER PROVIDING THE ASSESSEE AN OPPORTUNITY TO SHOW CAUSE AS TO WHY PENALTY U/S 271(1)(C) SHOULD N OT BE LEVIED FOR CONCEALMENT OF INCOME, AND CONSIDERING T HE SAME, REJECTED THE SUBMISSIONS OF THE ASSESSEE AND PROCEEDED TO LEVY PENALTY AT THE RATE OF 100% OF TH E TAX SOUGHT TO BE EVADED ON THE AMOUNTS CONFIRMED IN FIR ST APPEAL. . ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 12 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIALS AVAILABLE ON RECORD. FIRST OF AL L, IN THE NOTICE ISSUED U/S 274 R.W.S 271(1)(C) OF THE INCOME TAX ACT, 1961, THERE WAS NO SPECIFIC CHARGES AS RELATES TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. FROM THE NOTICE DATED 20/06/ 2014 PRODUCED BY THE LD. AR DURING THE HEARING, IT CAN B E SEEN THAT THE ASSESSING OFFICER WAS NOT SURE UNDER WHICH LIMB OF PROVISIONS OF SECTION 271 OF THE INCOME TAX ACT, 1961, THE ASSESSEE IS LIABLE FOR PENALTY. BESIDES THAT TH E ASSESSMENT ORDER ALSO DID NOT SPECIFY THE CHARGE AS TO WHETHER THERE IS CONCEALMENT OF INCOME OR FURNISHIN G OF INACCURATE PARTICULARS OF INCOME IN ASSESSEES CASE . BESIDES THIS, THE PRESENT CASE IS RELATING TO SEARC H CONDUCTED BY THE REVENUE IN THE PREMISES OF THE ASS ESSEE, WHILE THE DECISION RELIED BY THE ASSESSING OFFICER AS WELL AS CIT (A) THAT OF HONBLE SUPREME COURT IN CASE OF MAK DATA P. LTD. VS. CIT 358 ITR 593 IS RELATING TO SUR VEY AND THERE IS NO ISSUE INVOLVED ABOUT THE NOTICE ISSUED U/S 271(1)(C) R.W.S. 274 OF THE ACT. THIS CASE RELIED BY THE REVENUE IS NOT APPLICABLE IN THE PRESENT CASE DUE T O THE DISTINGUISHING FACTS. THERE IS SEPARATE PROVISION F OR PENALTY IN SEARCH CASES GIVEN UNDER THE STATUTE AFT ER 01.07.2012 THAT OF SECTION 271AAB OF THE ACT WHICH WAS TOTALLY IGNORED BY THE ASSESSING OFFICER. THUS, THE PENALTY ITSELF IS BASED ON INCORRECT SECTION. THEREFORE WE ARE TAKING UP THE CONTENTION OF THE ASSESSEE THAT THERE IS NO PARTICULAR LIMB MENTIONED IN THE NOTICE ISSUED UNDE R SECTION 271(1)(C) R.W.S. 274 OF THE ACT. THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE SUP REME COURT IN CASE OF M/S SSA EMERALD MEADOW. THE EXTRA CT OF THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN M/S SSA EMERALD MEADOWS ARE AS UNDER WHICH WAS CONFIRMED BY THE HONBLE APEX COURT: '3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT') 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. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE ITA NO. 4913/DEL/2015 DECISION OF THE DIVISION BENCH OF THIS COURT ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 13 RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT. THE APPEAL IS ACCORDINGLY DISMISSED.' THUS, ADDITIONAL GROUND NO. (II) OF THE ASSESSEE'S APPEAL IS ALLOWED. SINCE THE INCEPTION OF THE NOTICE ISSUED U /S 271(1)(C) HAS BECOME NULL AND VOID, THERE IS NO NEED TO COMMENT O N MERIT OF THE CASE. THE PENALTY U/S 271(1)(C) OF THE ACT IS Q UASHED. SINCE IN THE INSTANT CASE ALSO THE INAPPROPRIATE W ORDS IN THE PENALTY NOTICE HAS NOT BEEN STRUCK OFF AND THE NOTICE DOES NOT SPECIFY AS TO UNDER WHICH LIMB OF THE PROV ISIONS, THE PENALTY U/S 271(1)(C) HAS BEEN INITIATED, THERE FORE, WE ARE OF THE CONSIDERED OPINION THAT THE PENALTY LEVI ED U/S 271(1)(C) IS NOT SUSTAINABLE AND HAS TO BE DELETED. ALTHOUGH THE LD. DR SUBMITTED THAT MERE NONSTRIKIN G OFF OF THE INAPPROPRIATE WORDS WILL NOT INVALIDATE THE PENALTY PROCEEDINGS, HOWEVER, THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF SSAS EMERALD MEADOWS (SUPRA) WHERE THE SLP FILED BY THE REVENUE HAS BEEN DISMISSED IS DIRECTLY ON THE ISSUE CONTESTED H EREIN BY THE ASSESSEE. FURTHER, WHEN THE NOTICE IS NOT MENTI ONING THE CONCEALMENT OR THE FURNISHING OF INACCURATE PARTICULARS, THE RATIO LAID DOWN BY THE HONBLE HIG H COURT IN CASE OF M/S. SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPRA) WILL BE APPLICABLE IN THE PRES ENT CASE. THE HONBLE DELHI HIGH COURT HELD AS UNDER: 21. THE RESPONDENT HAD CHALLENGED THE UPHOLDING OF THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT, WHICH WAS ACCEPTED BY THE ITAT. IT FOLLOWED THE DECISION OF THE KARNATAKA HIGH COURT IN CIT V. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (KAR) AND OBSERVED THAT THE NOTICE ISSUED BY THE AO WOULD BE BAD IN LAW IF IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) THE PENALTY PROCEEDINGS HAD BEEN INITIATED UNDER I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE KARNATAKA HIGH COURT HAD FOLLOWED THE ABOVE JUDGMENT IN ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 14 THE SUBSEQUENT ORDER IN COMMISSIONER OF INCOME TAX V. SSAS EMERALD MEADOWS (2016) 73 TAXMAN.COM 241(KAR), THE APPEAL AGAINST WHICH WAS DISMISSED BY THE SUPREME COURT OF INDIA IN SLP NO.11485 OF 2016 BY ORDER DATED 5TH AUGUST, 2016. 22. ON THIS ISSUE AGAIN THIS COURT IS UNABLE TO FIND ANY ERROR HAVING BEEN COMMITTED BY THE ITAT. NO SUBSTANTIAL QUESTION OF LAW ARISES. THUS, NOTICE UNDER SECTION 271(1)(C) R.W.S. 274 OF THE ACT ITSELF IS BAD IN LAW. WE, THEREFORE, SET-ASIDE THE ORDER OF T HE CIT(A) AND DIRECT THE ASSESSING OFFICER TO CANCEL THE PENALTY SO LEVIED. 9. BEFORE US, NO DISTINGUISHING FEATURE IN THE FAC TS OF THE CASE IN THE YEAR UNDER CONSIDERATION AND THAT OF EA RLIER YEAR HAS BEEN POINTED OUT BY THE REVENUE. FURTHER IT HAS ALS O NOT BROUGHT ON RECORD ANY MATERIAL TO SHOW THAT THE DECISION OF THE CO- ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CA SE FOR A.Y. 2008-09 HAS BEEN SET ASIDE/ STAYED OR OVER RULED BY THE HIGHER JUDICIAL FORUM. CONSIDERING THE TOTALITY OF THE AF ORESAID FACTS AND FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH IN THE ASSESSEES OWN CASE FOR 2008-09 AND FOR SIMILAR REA SONS, WE ARE OF THE VIEW THAT THE LEVY OF PENALTY U/S 271(1)(C) WAS NOT JUSTIFIED. WE THEREFORE DIRECT ITS DELETION. THUS THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 17. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT ALL THE PRESENT APPEALS ARE CO VERED BY THE ORDER PASSED BY THE COORDINATE BENCH OF THE TRIBUNA L IN ASSESSEES GROUP COMPANY CASES AND NO DISTINGUISHING FACTS, IF ANY, HAVE BEEN BROUGHT ON RECORD NOR IT IS THE CASE OF THE REVENUE IF THE ORDER PASSED BY THE COORDINATE BENCH OF THE TRIBUNAL HAS BEEN STAYED BY ANY HIGHER FORUM. ITA NO.5105/DEL./2017 ITA NO.5106/DEL./2017 ITA NO.5107/DEL./2017 ITA NO.5108/DEL./2017 ITA NO.5109/DEL./2017 15 18. CONSEQUENTLY, FOLLOWING THE ORDER PASSED BY THE COORDINATE BENCH OF THE TRIBUNAL IN CASE OF RADHIKA SURGICAL PVT. LTD. (SUPRA) AND DECISIONS RENDERED BY HONBLE SUPREME C OURT IN CASE OF CIT VS. SSAS EMERALA MEADOWS (SUPRA) & HONBLE DELHI HIGH COURT IN CASE OF PR. CIT VS. SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPRA), PENALTY LEVIED BY THE AO AND SUSTAINED BY THE LD. CIT (A) IN ALL THE AFORESAID APPEALS IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE ORDERED TO BE DELETED. RESULTAN TLY, ALL THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 25 TH DAY OF AUGUST, 2021. SD/- SD/- (ANIL CHATURVEDI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 25 TH DAY OF AUGUST, 2021 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-24 NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.