Empire Tubewells (P) Ltd., New Delhi V. DCIT, Circle- 8(1), New Delhi

ITA 5352/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5665 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 13-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Opportunity of being heard; Principle of natural justice; Question of law; Initiation of penalty proceedings
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A .NO.-5352/DEL/2018 (ASSESSMENT YEAR-2012-13) EMPIRE TUBEWELLS (P) LTD., 663, BASEMENT, STREET NO. 8, GOVIND PURI, KALKAJI, NEW DELHI 110 019 (PAN NO. AAACE3632R) (APPELLANT) VS DCIT, CIRCLE-8(1), NEW DELHI (RESPONDENT) APPELLANT BY SHRI GAUTAM JAIN, ADVOCATE & SH. L ALIT MOHAN, CA RESPONDENT BY SHRI S.L. ANURAGI, SR. DR ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 06.06.2018 OF THE LD. CIT(A)-3, DELHI RELEVANT TO ASSESSMENT YEAR 2012-13 ON THE FOLLOWING GROUNDS: - I) THAT THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING PENALTY OF RS. 2,10,000/- IN AN ORDER DATED 6.6.2018 U/S. 271(1)(C) OF THE ACT. II) THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT IN ABSENCE OF ANY SPECIFIC SHOW CAUSE NOTICE HAVING BEEN ISSUED, THE LEVY OF PENALTY IS OTHERWISE WHOLLY MISCONCEIVED. III) THAT FURTHERMORE THAT SINCE NO SATISFACTION WAS RECORDED IN THE ORDER OF ASSESSMENT, PENALTY LEVIED IS OTHERWISE WAS WITHOUT JURISDICTION. IV) THAT THE LD. CIT(A) HAS SUSTAINED THE PENALTY BY FAILING TO APPRECIATE THAT ASSESSMENT PROCEEDINGS ARE NOT CONCLUSIVE AND AS ALLEGED 2 INCORRECT CLAIM DOES NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS, WHEN THE DETAILS SUPPLIED BY THE ASSESSEE IN RETURN ARE NOT FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. V) THAT THE LD. CIT(A) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN IMPOSING THE PENALTY WITHOUT CONSIDERING SUBMISSION OF ASSESSEE AND WITHOUT GRANTING ANY OPPORTUNITY OF BEING HEARD MUCH LESS VALID AND PROPER OPPORTUNITY AND THEREFORE THE ORDER MADE IS CONTRARY OR PRINCIPLES OF NATURAL JUSTICE AND HENCE A NULLITY. VI) THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACTUAL MATRIX OF THE CASE OF THE APPELLANT AND EVIDENCE ON RECORD AND CONCLUSIONS THUS DRAWN MECHANICALLY ARE WHOLLY UNJUSTIFIED. IT IS THEREFORE, PRAYED THAT THE PENALTY LEVIED OF RS. 2,10,000/- U/S. 271(1) OF THE ACT AND SUSTAINE D BY THE LD. CIT(A) MAY KINDLY BE DELETED. 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE N OT DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE N OT REPEATED HERE FOR THE SAKE OF BREVITY. 3. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE HAS STATED THAT NO SPECIFIC SHOW CAUSE NOTICE HAVE BEE N ISSUED AND ALSO NO SATISFACTION WAS RECORDED IN THE ORDER OF A SSESSMENT AND PENALTY LEVIED IS OTHERWISE WAS WITHOUT JURISD ICTION. IN THIS REGARD HE DRAW MY ATTENTION TOWARDS PB PAGE NO. 2 4, 32 & 39 WHICH ARE SHOW CAUSE NOTICES DATED 14.7.2016, 25 .7.2016 & 14.2.2017. HE FURTHER DRAW OUR ATTENTION TOWARDS P ARA NO. 2 3 AT PAGE NO. 1 OF THE PENALTY ORDER DATED 20.03.2017 AND STATED THAT AO HAS WRITTEN THAT PENALTY PROCEEDINGS U/S. 271(1) ON ACCOUNT OF FURNISHING INACCURATE PARTICULARS OF INC OME WAS INITIATED ALONGWITH THE ASSESSMENT ORDER AND NOTICE ISSUED TO THE ASSESSEE. HOWEVER, VIDE PARA NO. 4 AT PAGE NO . 4 (LAST PAGE) OF THE PENALTY ORDER, IT HAS BEEN MENTIONED T HAT IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE ASSESSEE COMPANY HAS DELIBERATELY CONCEALED PARTICULARS OF INCOME TO THE EXTENT OF RS. 7,00,000/-, FROM WHICH IT IS CLEAR THAT NO SATISFACTION HAS BEEN RECORDED THAT UNDER WHICH CHARGE THE PENALTY I S LEVIABLE I.E. ON ACCOUNT OF CONCEALMENT OF INCOME OR FURNISH ING OF INACCURATE PARTICULARS. HENCE, HE STATED THAT THE PENALTY IMPOSED IS LIABLE TO BE QUASHED ON LEGAL GROUND AS THE ISSUE IS SQUARELY COVERED BY THE FOLLOWING DECISIONS.: - HONBLE KARNATAKA HIGH COURT DECISION IN THE CASE OF CIT & ORS. VS. M/S MANJUNATHA COTTON AND GINNIG FACTORY & ORS. (2013) 359 ITR 565 - APEX COURT DECISION IN THE CASE OF CIT & ANR. VS. M/S SSAS EMERALD MEADOWS IN CC NO. 11485/2016 DATED 05.8.2016. 4 4. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTH ORITIES ALONGWITH THE PROVISIONS OF LAW AS WELL AS THE CAS E LAW CITED BY THE LD. COUNSEL OF THE ASSESSEE. AFTER PERUSING THE PB PAGE NO. 24, 32 & 39 WHICH ARE SHOW CAUSE NOTICES DATED 14. 7.2016, 25.7.2016 & 14.2.2017, WE NOTE THAT NO SPECIFIC SHO W CAUSE NOTICE HAVE BEEN ISSUED FOR LEVYING THE PENALTY IN DISPUTE. FOR THE SAKE OF CONVENIENCE, WE ARE REPRODUCING HEREWI TH THE CONTENTS OF THE SHOW CAUSE NOTICE DATED 14.07.2015 AS UNDER:- SUB:- PENALTY PROCEEDINGS UNDER SECTION 271(1) OF THE INCOME TAX ACT, 1961 ASSESSMENT YEAR 2012-13 SHOW CAUSE NOTICE REG. REFERENCE IS INVITED TO THE ABOVE MENTIONED PENALTY PROCEEDINGS WHICH ARE PENDING FOR FINALIZATION. 2. SINCE THE ABOVE PENALTY PROCEEDINGS ARE NOW GETTING BARED BY LIMITATION, YOU ARE HEREBY GIVEN AN OPPORTUNITY TO SHOW CAUSE AS TO WHY PENALTY SHOULD NOT BE LEVIED UPON YOU UNDER THE PROVISIONS OF INCOME TAX ACT AS MENTIONED ABOVE. YOU ARE REQUESTED TO PLEASE FILE YOUR EXPLANATION, IF ANY T O THE SHOW CAUSE NOTICE BEING ISSUED TO YOU ON 5 25.7.2016 AT 11.30 AM. PLEASE NOTE THAT IN CASE OF YOUR FAILURE TO FILE EXPLANATION ON THE DATE FIXED FOR HEARING, IT WILL BE PRESUMED THAT YOU HAVE NO EXPLANATION TO OFFER AND THE PENALTY PROCEEDINGS SHALL BE FINALIZED ON THE BASIS OF MATERIAL AVAILA BLE ON RECORDS AND ON MERITS OF THE CASE. 5.1 WE FURTHER NOTE FROM PARA NO. 2 AT PAGE NO. 1 OF THE PENALTY ORDER DATED 20.03.2017 AND FOUND THAT AO HAS HIMSELF WRITTEN THAT PENALTY PROCEEDINGS U/S. 271(1) ON ACCOUNT OF FURNISHING INACCURATE PARTICULARS OF INC OME WAS INITIATED ALOGNWITH THE ASSESSMENT ORDER AND NOTICE ISSUED TO THE ASSESSEE. AND SUBSEQUENTLY VIDE PARA NO. 4 AT PAGE NO. 4 (LAST PAGE) OF THE SAME PENALTY ORDER HE HAS WRITT EN THAT IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE ASSESSEE CO MPANY HAS DELIBERATELY CONCEALED PARTICULARS OF INCOME TO THE EXTENT OF RS. 7,00,000/-. THEREFORE, IN MY CONSIDERED OPINION, THE AO IS NOT CLEAR UNDER WHICH CHARGE THE PENALTY IS LEVIABL E I.E. WHETHER IT IS ON ACCOUNT OF CONCEALMENT OF INCOME O R FURNISHING OF INACCURATE PARTICULARS. HENCE, I AM OF THE VIEW THAT THE AO HAS INITIATED THE PENALTY FOR CONCEALMENT OF PARTIC ULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS, WHI CH IS CONTRARY TO THE PROVISIONS OF LAW. THEREFORE, THE PENALTY I N DISPUTE IS NOT SUSTAINABLE IN THE EYES OF LAW. MY AFORESAID V IEW IS SUPPORTED BY THE FOLLOWING DECISIONS:- 6 I) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS 2015 (11) TMI 1620 KARNATAKA HIGH COURT HAS HELD THAT TRIBUNAL HAS CORRECTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) 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 DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE O F COMMISSIONER OF INCOME TAX VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) (7) TMI 620- KARANATAKA HIGH COURT. THUS 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 DECIDED IN FAVOUR OF ASSESSEE. II) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS HONBLE SUPREME COURT OF INDIA REPORTED IN 2016 (8) TMI 1145 SUPREME COURT. THE APEX COURT HELD THAT HIGH COURT ORDER CONFIRMED (2015) (11) 7 TMI 1620 (SUPRA) KARNATAKA HIGH COURT. NOTICE ISSUED BY AO UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) 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 DECIDED IN FAVOUR OF ASSESSEE. III) ITAT, A BENCH, NEW DELHI DECISION DATED 05.12.2017 IN THE CASE OF ASHOK KUMAR CHORDIA VS. DCIT PASSED IN ITA NO. 5788 TO 5790/DEL/2014 WHEREIN THE TRIBUNAL HAS OBSERVED AS UNDER:- 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH THE RELEVANT RECORDS AVAILABLE WITH US. FIRSTLY, WE HAVE PERUSED THE NOTICE DATED 26.3.2013 ISSUED BY THE AO FOR INITIATING THE PENALTY AND DIRECTING THE ASSESSEE TO APPEAR BEFORE HIM AT 11.30 AM ON 26/04/2013 AND ISSUED A SHOW CAUSE TO THE ASSESSEE STATING THEREIN THAT ..YOU HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. AFTER PERUSING THE NOTICE DATED 26.3.2013 ISSUED BY THE AO TO THE 8 ASSESSEE, WE ARE OF THE VIEW THAT THE AO HAS INITIATED THE PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME AS WELL AS IN THE PENALTY ORDER DATED 30.9.2013 AO HAS STATED THAT HE IS SATISFIED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOME, WHICH IS CONTRARY TO LAW. IN VIEW OF ABOVE, THE PENALTY IS NOT SUSTAINABLE IN THE EYES OF LAW. OUR AFORESAID VIEW IS FORTIFIED BY THE FOLLOWING DECISIONS:- I) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS 2015 (11) TMI 1620 KARNATAKA HIGH COURT HAS HELD THAT TRIBUNAL HAS CORRECTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) 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 DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE O F COMMISSIONER OF INCOME TAX VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) (7) TMI 620- 9 KARANATAKA HIGH COURT. THUS 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 DECIDED IN FAVOUR OF ASSESSEE. II) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS HONBLE SUPREME COURT OF INDIA REPORTED IN 2016 (8) TMI 1145 SUPREME COURT. THE APEX COURT HELD THAT HIGH COURT ORDER CONFIRMED (2015) (11) TMI 1620 (SUPRA) KARNATAKA HIGH COURT. NOTICE ISSUED BY AO UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) 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 DECIDED IN FAVOUR OF ASSESSEE. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENTS, WE DELETE THE PENALTY IN DISPUTE AND DECIDE THE ISSUE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE. IV) ITAT, D BENCH, NEW DELHI DECISION DATED 26.5.2017 IN THE CASE OF RAJENDER JAIN VS. ACIT 10 PASSED IN ITA NO. 6804/DEL/2013 WHEREIN THE TRIBUNAL HAS OBSERVED AS UNDER:- 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH THE RELEVANT RECORDS AVAILABLE WITH US. FIRSTLY, WE HAVE PERUSED THE ASSESSMENT ORDER WHEREIN THE AO HAS RECORDED HIS SATISFACTION ON THE PAGE 2, 2 ND PARA VIZ. I AM SATISFIED THAT IT IS A FIT CASE FOR INITIATION OF PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCOME. WE HAVE ALSO PERUSED THE NOTICE DATED 31.12.2007 ISSUED BY THE AO FOR INITIATING THE PENALTY AND DIRECTING THE ASSESSEE TO APPEAR BEFORE HIM AT ---- -----AM/PM ON --------200------ AND ISSUED A SHOW CAUSE TO THE ASSESSEE STATING THEREIN THAT WHY AN ORDER IMPOSING THE PENALTY OF AMOUNT SHOULD NOT BE MADE U/S. 271(1)(C) OF THE I.T. ACT, 1961. AFTER PERUSING THE NOTICE DATED 31.12.2007 ISSUED BY THE AO TO THE ASSESSEE, WE ARE OF THE VIEW THAT THE AO HAS INITIATED THE PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCOME, BUT IN THE PENALTY ORDER DATED 06.11.2009 HE HAS STATED THAT HE IS SATISFIED THAT 11 THE ASSESSEE HAS FURNISHED THE INACCURATE PARTICULARS OF INCOME. 7.1 HOWEVER, THE LD. CIT(A) HAS GIVEN CLEAR FINDING REGARDING THE FURNISHING OF INACCURATE PARTICULARS. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PARA NO. 5.3.1 OF THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) IS REPRODUCED AS UNDER:- 5.3.1 THE ABOVE FINDINGS OF THE LD. CIT(A) CLEARLY ESTABLISHES THAT THE APPELLANT HAS CONCEALE D THE INCOME OF RS. 26,50,500/- AND DID NOT DECLARE IN THE RETURN OF INCOME INSPITE OF ADMITTIN G A DISCLOSURE OF RS. 40,00,000/- DURING SURVEY. THUS, THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE FACTS OF THE CASE CLEARLY REVEAL THAT THE APPELLANT TRIED TO EVADE PAYMENT OF TAXES BY FURNISHING INACCURATE PARTICULARS OF INCOME. THEREFORE, I HOLD THAT THE A O WAS FULLY JUSTIFIED IN LEVYING THE PENALTY U/S. 271(1)(C) OF THE ACT. THE PENALTY LEVIED BY THE AO IS UPHELD. THIS GROUND OF APPEAL IS REJECTED. 8. KEEPING IN VIEW OF THE AFORESAID FINDING OF THE LD. CIT(A), WE ARE OF THE CONSIDERED VIEW THAT THE AO HAS PASSED THE ASSESSMENT ORDER WHEREIN THE AO HAS RECORDED HIS SATISFACTION ON THE PAGE 2, 2 ND 12 PARA VIZ. I AM SATISFIED THAT IT IS A FIT CASE FOR INITIATION OF PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCOME. FURTHER THE AO VIDE HIS NOTICE DATED 31.12.2007 FOR INITIATING TH E PENALTY AND DIRECTED THE ASSESSEE TO APPEAR BEFORE HIM AT ---------AM/PM ON --------200------ AND ISSUED A SHOW CAUSE TO THE ASSESSEE STATING THEREIN THAT WHY AN ORDER IMPOSING THE PENALTY OF AMOUNT SHOULD NOT BE MADE U/S. 271(1)(C) OF THE I.T. ACT, 1961. AFTER PERUSING THE NOTICE DATED 31.12.2007 ISSUED BY THE AO TO THE ASSESSEE, WE ARE OF THE VIEW THAT THE AO HAS INITIATED THE PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME/ CONCEALMENT OF INCOME, BUT IN THE PENALTY ORDER DATED 06.11.2009 HE HAS STATED THAT HE IS SATISFIED THAT THE ASSESSEE HAS FURNISHE D THE INACCURATE PARTICULARS OF INCOME. IN OUR VIEW THE PENALTY IN DISPUTE IS NOT SUSTAINABLE IN THE EYES OF LAW, BECAUSE THE AO HAS NOT RECORDED ANY CLEAR FINDING WHETHER THE ASSESSEE WAS GUILTY OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. SECONDLY, THE NOTICE U/S. 271(1)(C) HAS BEEN ISSUED TO THE ASSESSEE LEVYING 13 THE PENALTY FOR FURNISHING OF INACCURATE PARTICULAR S OF INCOME/CONCEALMENT OF INCOME, WHEREAS THE PENALTY IN DISPUTE HAS BEEN LEVIED BY THE AO ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS. I N OUR VIEW THE PENALTY IS NOT SUSTAINABLE IN THE EYES OF LAW. OUR AFORESAID VIEW IS FORTIFIED BY THE FOLLOWING DECISIONS:- I) CIT & ANR. VS. M/S EMERALD MEADOWS 2015 (11) TMI 1620 KARNATAKA HIGH COURT HAS HELD THAT TRIBUNAL HAS CORRECTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) 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 DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE O F COMMISSIONER OF INCOME TAX VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) (7) TMI 620- KARANATAKA HIGH COURT. THUS SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS 14 COURT, WE ARE OF THE OPINION NO SUBSTANTIAL QUESTION OF LAW ARISES DECIDED IN FAVOUR OF ASSESSEE. II) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS HONBLE SUPREME COURT OF INDIA REPORTED IN 2016 (8) TMI 1145 SUPREME COURT. THE APEX COURT HELD THAT HIGH COURT ORDER CONFIRMED (2015) (11) TMI 1620 (SUPRA) KARNATAKA HIGH COURT. NOTICE ISSUED BY AO UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) 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 DECIDED IN FAVOUR OF ASSESSEE. 8.1 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENTS, WE DELETE THE PENALTY IN DISPUTE AND DECIDE THE ISSUE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE. 6. KEEPING IN VIEW OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE AFORESAID PRECEDENTS, I CANCEL THE PENALTY IN DISPUTE BY RESPECTFULLY FOLLOWING THE AF ORESAID DECISIONS AND ALLOW THE GROUNDS RAISED BY THE ASSES SEE. 15 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE STANDS ALLOWED. ORDER PRONOUNCED ON 04-02-2019. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED: 04/02/2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI