SAROJ ANIL STEEL P.LTD, THANE V. ITO WD 3(2), THANE

ITA 5597/MUM/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3489 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 1997-1998
• Appeal Filed On: 04-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK NARANG
• Assessee Lawyers: DINESH R SHAH
• Keywords: Initiation of penalty proceedings; Accommodation entries
• Section: 147; 143(3); 133A; 133(6)

Judgement Text

1 SAROJ ANIL STEEL (P) LTD IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI MAHAVIR SINGH(JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NO.5597/MUM/2014 (ASSESSMENT YEAR:1997-98) & I.T.A NO.5106/MUM/2017 (ASSESSMENT YEAR:1996-97) M/S SAROJ ANIL STEEL (PVT) LTD FLAT NO.103, BLDG NO.21, TULSIDHAM, BEHIND CINEMAX, NEAR DAV PUBLIC SCHOOL, GODBUNDER ROAD, THANE (W) 400 601 PAN : AAFCD0196M VS ITO, WD.3(2), THANE APPELLANT RESPONDENT APPELLANT BY SHRI DINESH R SHAH RESPONDENT BY SHRI ABHISHEK NARANG DATE OF HEARING 08 -08-2018 DATE OF PRONOUNCEMENT 21-08-2018 O R D E R PER G MANJUNATHA, AM : THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF THE CIT(A)-1 & CIT(A)-2, THANE DATED 1-06 -2014 & 01-05-2017 RESPECTIVELY AND THEY PERTAIN TO AYS 1997-98 & 1996 -97 RESPECTIVELY. SINCE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, FO R THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY 2 SAROJ ANIL STEEL (P) LTD THIS COMMON ORDER. 2. THE ASSESSEE HAS RAISED MORE OR LESS COMMON GROU NDS OF APPEAL FOR BOTH THE ASSESSMENT YEARS. BY THESE GROUNDS OF APPEAL, ASSESSEE HAS CHALLENGED LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. THE ASSESSEE ALSO FILED AN APPLICATION FOR FILING A DDITIONAL GROUNDS OF APPEAL ON 30-07-2018 AND TAKEN A LEGAL GROUND CHALL ENGING VALIDITY OF PENALTY ORDER PASSED BY THE AO U/S 271(1)(C) IN PUR SUANCE TO NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE INCOME-TAX A CT, 1961. 3. THE BRIEF FACTS OF THE CASE EXTRACTED FROM ITA N O.5106/MUM/2017 FOR AY 1996-97 ARE THAT THE ASSESSEE COMPANY IS ENG AGED IN THE BUSINESS OF TRADING IN IRON & STEEL. A SURVEY ACTI ON U/S 133(6) OF THE I.T. ACT, 1961 WAS CONDUCTED IN THE GROUP COMPANIES OF ANIL EXIM (PVT) LTD AND ASSESSEE BEING PART OF THE GROUP WAS ALSO COVER ED UNDER SURVEY ACTION. DURING THE COURSE OF SURVEY, IT WAS NOTICE D THAT THE ASSESSEE WAS INVOLVED IN HAWALA TRANSACTIONS, I.E. PROVIDING ACCOMMODATION ENTRIES WITHOUT ACTUAL DELIVERY OF GOODS. THEREFOR E THE ASSESSMENT WAS REOPENED U/S 147 AND ACCORDINGLY ASSESSMENT HAS BEE N COMPLETED U/S 143(3) R.W.S. 147 OF THE I.T. ACT, 1961 WHEREIN THE INCOME OF THE ASSESSEE WAS ASSESSED AT RS.15,40,950 BY ESTIMATING 1% PROFIT ON GROSS TURNOVER. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE LD.CIT (A) HAS DIRECTED THE AO TO ESTIMATE PROFIT @0.4% OF GROSS TURNOVER. ON FURTHER APPEAL, THE 3 SAROJ ANIL STEEL (P) LTD ITAT HAS SET ASIDE THE MATTER TO THE AO WITH A DIRE CTION TO ESTIMATE INCOME AT 1% OF TOTAL TURNOVER AND ALLOW CERTAIN AD MINISTRATIVE EXPENSES. THE AO, WHILE COMPLETING THE ASSESSMENT U/S 143(3) R.W.S. 254 OF THE I.T. ACT, 1961, AFTER ALLOWING CERTAIN E XPENSES DETERMINED THE TOTAL INCOME AT RS.13,73,980 AS AGAINST THE INCOME OF RS.15,40,954 ASSESSED EARLIER. AGAINST THE ORDER OF AO ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) WHICH WAS DISMISSED BY THE LD.CIT (A). ON FURTHER APPEAL, THE ITAT, E-BENCH, MUMBAI VIDE ORDER DATED 11-09-2008 RESTORED THE MATTER BACK TO THE FILE OF THE AO WITH A DIRECTION TO RECOMPUTE THE INCOME OF THE ASSESSEE AFTER VERIFICA TION OF GENUINENESS OF EXPENDITURE CLAIMED. CONSEQUENT TO ORDER OF ITA T, THE AO PASSED ORDER U/S 143(3) R.W.S. 254 ON 22-02-2009 AND DETER MINED TOTAL INCOME AT RS.12,28,020. 4. THEREAFTER, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) BY ISSUING NOTICE U/S 274 R.W.S. 271(1)(C) FOR CONCEAL MENT OF PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE VIDE ITS LETTER DATED 15-02-2011 FILED AN ELABORATE WRITTEN SUBMISSIONS ON THE ISSUE OF LE VY OF PENALTY WHICH HAS BEEN REPRODUCED BY THE AO IN HIS ASSESSMENT ORD ER AT PARA 4 ON PAGES 3 TO 12. THE AO, AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE HELD THAT THE ASSESSEE COMPANY COULD NOT F URNISH ANY EVIDENCE, WHATSOEVER TO SHOW THAT THERE WAS NO CONC EALMENT OF INCOME. 4 SAROJ ANIL STEEL (P) LTD THEREFORE, HE OPINED THAT IT IS A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) FOR CONCEALMENT OF PARTICULARS OF INCOME AND FOR FU RNISHING INACCURATE PARTICULARS OF INCOME. THE RELEVANT PARA OF THE AO S PENALTY ORDER IS EXTRACTED BELOW:_ 5. CONSIDERING THE FACTS OF THE CASE, THE EXPLANATI ON OF THE ASSESSEE WAS NOT FOUND TO BE ACCEPTABLE ON THE FOLLOWING GRO UNDS:- RATHER THAN FURNISHING THE EXPLANATION ON MERI TS, THE ASSESSEE JUST ONCE AGAIN NARRATED THE 'HAWALA' BUSINESS OF THE CO MPANY. THE ASSESSEE- ONCE AGAIN TRIED TO EXPLAIN THE M ERITS AND CONSTRAINTS OF 'HAWALA' TRANSACTIONS WHICH HAS ALREADY BEEN CON SIDERED IN THREE ASSESSMENT ORDERS AND THREE APPELLATE ORDER OF THE CIT(A). EVEN THE ITAT AFTER CONSIDERING ALL THE FACTS', CONSTRAINTS AND CIRCUMSTANCES DECIDED THE CASE TWICE AND ISSUED DIRECTIONS TO THE ASSESSING OFFICER TO COMPUTE THE INCOME OF THE ASSESSEE. BASED ON WHICH THE INCOME OF THE ASSESSEE COMPANY WAS ASSESSED BY PASSING ASSESS MENT ORDER U/S 143(3) R.W.S. 254 OF THE I.T.ACT,1961 ON 22/12/ 2009. IN THE EXPLANATION SUBMITTED, THE ASSESSEE HAS CL AIMED DEDUCTION IN TURNOVER IN RESPECT OF SISTER CONCERNS WHICH CAN NO T 3 BE CONSIDERED IN THE PENALTY PROCEEDINGS. IN IS PERTINENT TO MENTION HERE THAT TRIE ASSESSEE HAS NEVER CLAIMED THE DEDUCTION ON ACCOUNT OF TURNOVER OF SISTER CONCERNS. THE SAME WAS FIRST TIME CLAIMED BE FORE THE CIT(A) WHILE FILING APPEAL AGAINST THE ASSESSMENT ORDER PA SSED U/S 143(3) R.W.S. 254 OF THE I.T.ACT,1961 ON 22/12/2009. THE H ON'BLE CIT(A) DULY DISCUSSED/CONSIDERED THE CLAIM OF THE ASSESSEE AND DISMISSED THE SAME. THE ASSESSEE COMPANY COULD NOT FURNIS H ANY EVIDENCES OF WHATSOEVER TO SHOW THAT THERE WAS NO CONCEALMENT OF INCOME, SAKE OF ARGUMENT, EVEN IF THE CLAIM OF ASSESSEE REGARDING C TION ON ACCOUNT OF TURNOVER OF THE SISTER CONCERNS IS RELIED UPON OR CONSIDERED, IT COME TO CONCLUDE THAT THE ASSESSEE HAS CONCEALED THE INCOME . THE ONLY DIFFERENCE WOULD BE AMOUNT OF CONCEALED INCOME. THI S CLEARLY SHOWS THAT THE ASSESSEE HAS CONCEALED THE INCOME BY FURNI SHING INACCURATE PARTICULARS OF INCOME. WITHOUT GOING INTO THE QUANT UM, THE ASSESSEE COMPANY HAD ITSELF ADMITTED TO HAVE EARNED INCOME I N 'HAWALA' TRANSACTIONS OVER AND ABOVE THE DECLARED INCOME IN THE RETURN OF INCOME WHICH HAS ALSO BEEN DETECTED BY ASSESSING OF FICER, CIT(A) AS WELL AS THE ITAT ON ALL THE EARLIER OCCASIONS. THER EFORE, IN VIEW OF THE HIGH COURT OF RAJASTHAN (JAIPUR BENCH), IN CIT VS R .C.GUPTA & CO. (1980) 122 ITR 0567 :(1980) 015 CTR 0023 :(1980) 00 3 TAXMAN 0501 WHEREIN IT WAS HEID THAT WHERE THE ASSESSEE HI MSELF HAD ADMITTED THAT A CERTAIN AMOUNT REPRESENTED HIS INCOME, NO FU RTHER EVIDENCE WOULD BE NECESSARY TO SHOW THAT IT, WAS THE AMOUNT WHICH REPRESENTED HIS INCOME AND/OR THAT IT REPRESENTED HIS CONCEALED INCOME. IN THE 5 SAROJ ANIL STEEL (P) LTD PRESENT CASE, THE DECISION IS SQUARELY APPLICABLE A ND THUS PENALTY UNDER SECTION 271(L)(C) OF THE ACT,1961 IS ATTRACTE D IN THIS CASE. IT IS NOT THE CASE WHERE THE AO HAS TAKEN A DIFFERENT VIEW (O THER THAN THE QUANTUM) FROM THE ASSESSEE IN TREATING CERTAIN INCO ME AS CONCEALED INCOME. THIS SITUATION CLEARLY DOUBT THE INTENTION OF THE ASSESSEE AND THEREFORE ACTION ON PART OF THE ASSESSEE CAN BE CLE ARLY TERMED AS DELIBERATE 'CONCEALMENT'. 6. IN VIEW OF THE ABOVE THE EXPLANATION OF THE ASSE SSEE IS HEREBY REJECTED. THUS, I AM SATISFIED THAT THE ASSESSEE HAS CONCEALE D THE PARTICULARS OF INCOME BY FURNISHING INACCURATE PARTICULARS OF SUCH INCOME UNDER THE PROVISIONS OF SECTION 271(L)(C) OF THE I.T.ACT,1961. THEREFORE, A PENALTY OF RS.4,80,482/- IS LEVIED U/S 271(L)(C) OF THE I.T.ACT,1961 AGAINST TH E MAXIMUM PENALTY LEVIABLE AT THE THREE TIMES OF THE ABOVE PENALTY LEVIED. THE WO RKING OF PENALTY IS AS UNDER:- (I) INCOME ASSESSED U/S. 143(3) R.W.S. 254 [AFTER GIVING EFFECT TO THE ORDER OF CIT(A)'S ORDER DTD. 15/09/2010] ' ' ' - RS.12,28,020/- TAX ON IT (A) RS.5,28,049/- (II) RETURNED INCOME RS.1,10,620/- TAX ON IT (B) RS.47,567/- (III) TAX SOUGHT TO. EVADED (A-B) RS.4,80,482/- PENALTY LEVIABLE:- RS.4,80,482A RS. 14,41,4467- MINIMUM @ 100% OF 4,80,482/- MAXIMUM @ 300% OF ?4,80,482/- (IV) PENALTY LEVIED RS.4,80,482/- 5. AGGRIEVED BY THE ORDER OF THE PENALTY, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) ASSESSEE HAS FILED ELABORATE WRITTEN SUBMISSIONS WHICH HAVE BEEN REPRODUCED BY T HE LD.CIT(A) IN HIS ORDER AT PARA 8 ON PAGES 5 TO 7 OF HIS ORDER. THE LD.CIT(A), AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE HE LD THAT THE ASSESSEE 6 SAROJ ANIL STEEL (P) LTD HAD CONCEALED THE PARTICULARS OF ITS INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT AND ACCORDINGLY, THE AO WAS RI GHT IN IMPOSING PENALTY U/S 271(1)(C) OF THE ACT. THE RELEVANT POR TION OF THE ORDER OF THE LD.CIT(A) IS EXTRACTED BELOW:- 5. I HAVE CAREFULLY CONSIDERED (HE FACTS OF THE CAS E, FINDINGS OF THE AO IN THE ASSESSMENT ORDERS AS WELL AS PENALTY ORDER, SUBMISS IONS OF THE LD, AR AND MATERIAL PLACED ON RECORD. FROM THE FACTS OF THE CASE IT IS NOTICED THAT THE HISTORICAL FACTS OF THE CASE HAVE BEEN DISCUSSED IN DETAIL IN THE FOREGOING PARAS OF THE APPEAL ORDER, HENCE NOT REPRODUCED TO AVOID REPETITION. THE APPELLANT I S ENGAGED IN THE BUSINESS OF HAWALA TRANSACTIONS FROM A FLAT NO. 204, QUAY STREET, FIRS T FLOOR, DARUKHANA, RAY ROAD, MUMBAI. IN THIS CASE A SURVEY ACTION U/S 133A OF TH E ACT WAS CARRIED OUT. THE SURVEY PARTY NOTICED THAT THE APPELLANT AND OTHER ASSOCIAT E CONCERNS, OPERATING FROM THE ABOVE FLAT, WERE PROVIDING ACCOMMODATION ENTRIES TO VARIOUS CLIENTS, AS PER THEIR REQUIREMENT, AFTER CHARGING A NOMINAL COMMISSION AN D ACCORDINGLY EARNED THE TAXABLE INCOME. IN-SPITC OF HAVING TAXABLE INCOME, THE APPE LLANT HAD NOT DECLARED/OFFERED CORRECTLY THE SAME FOR TAX. THE HON'BLE ITAT, KEEPI NG IN MIND THE FACTS OF THE CASE, SUBMISSION OF THE APPELLANT, FINDING OF THE AO IN T HE ASSESSMENT ORDER AND THAT OF CIT(A) IN THE APPELLATE ORDERS, HAD DIRECTED THE AO TO DETERMINE THE COMMISSION INCOME @ 1% OF THE TOTAL TURNOVER AND FURTHER DIREC TED TO ALLOW EXPENSES, ACTUALLY INCURRED BY THE APPELLANT AGAINST THE SAID COMMISSI ON INCOME. THE AO HAS ACCORDINGLY DETERMINED THE TAXABLE INCOME AT RS 12, 28,0207- AND THE SAME WAS ALSO UPHELD BY THE THEN C1T(A), THANE. .AFTER CONSIDERIN G THE SUBMISSION OF THE APPELLANT AND KEEPING IN VIEW THE FINDING OF THE CIT(A) IN TH E QUANTUM APPEAL, HAD IMPOSED THE MINIMUM PENALTY OF RS 4,80,482/-, BY GIVING THE DETAILED FINDING IN THE PENALTY ORDER. IN A YR 1997-98, ON ACCOUNT OF SIMILAR SET O F CIRCUMSTANCES, THE PENALTY IMPOSED BY THE AO WAS UPHELD BY THE CIT (A) 1, THAN E, IN ITA NO. 04/12-13 DATED 11.06.2014, BY OBSERVING .;-. INTER-ALIA, AS UNDER: - I HAVE CAREFULLY CONSIDERED THE APPELLANT'S SUBMISSIO NS, THE OBSERVATIONS OF THE AO IN THE ORDER AND PENALTY ORD ER AND THE FUELS OF THE CASE. AS FAR AS THE FACTUAL SUBMISSIONS OF THE APPE LLANT ARE CONCERNED, IT IS SEEN THAT THE HON'BLE ITAT, 'E' BENCH, MUMBAI, VIDE THEIR ORDER DATED 04. 04.2014 HAVE DISMISSED THE APPELLANT 'S APPEAL. WITH REGARD TO THE APPELLANT 'S CONTENTION THAT SALES WITH SISTER CONC ERNS /GROUP CONCERNS WERE REQUIRED TO BE REDUCED FROM THE TOTAL TURNOVER OF THE APPELLANT, IT HAS BEEN HELD BY THE HON 'BLE ITAT, MUMBAI THAT THE ISSUE OF COMMISSION AND TOTAL TURNOVER HAD OBTAINED FINALITY . IT WAS FURTHER OBSERVED THAT THE APPELLANT HAD NOT RAISED ANY SUCH ISSUE BEFORE THE TRIBUNAL IN THE SECOND FOUND AND THEREFORE THE ITAT , MUMBAI, REJECTED THE APPELLANT'S CONTENTION IN THIS REGARD. THEREFOR E, THE SUBMISSION OF THE APPELLANT REGARDING DETERMINATION OF INCOME HAVE BE EN FINALLY DECIDED BY THE ITAT, MUMBAI, BY DISMISSING THE APPELLANT'S APPEAL. 11. AS FAR AS LEGAL SUBMISSIONS OF THE APPELLANT AR E CONCERNED, IT IS SEEN THAT THE VARIOUS JUDGMENTS RELIED UPON BY THE APPEL LANT ARE PRIMARILY RELATING TO TWO ISSUES I.E. FIRST, THE ASSESSMENT P ROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE PROCEEDINGS AND PENALTY CA NNOT BE IMPOSED 7 SAROJ ANIL STEEL (P) LTD AUTOMATICALLY OR IN A MECHANICAL MANNER ON THE BASI S OF THE ASSESSMENT ORDER. SECONDLY, IN THE CASE OF ESTIMATION OF PROFI T, PENALTY U/S. 271(L)(C) OF THE IT, ACT CANNOT BE IMPOSED. 12. DURING THE COURSE OF SURVEY AT THE APPELLANT'S PREMISES, IT WAS FOUND THAT THE APPELLANT WAS INDULGING IN PROVIDING ACCOM MODATION ENTRIES TO PARTIES AND INCOME FROM THE SAME HAD NOT BEEN DECLA RED BY THE APPELLANT IN ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDER ATION. !I IS AN ADMITTED FACT THAT THE APPELLANT WAS ISSUING ACCOMMODATION B ILLS. THEREFORE, IT CANNOT BE SAID THAT THE PENALTY U/S. 27L(L)(C) OF T HE I. T. ACT HAS BEEN IMPOSED IN THE APPELLANTS CASE MECHANICALLY OR ONL Y ON THE BASIS OF ADDITION MADE IN THE ASSESSMENT ORDER. THE FAD OF A PPELLANT 'S ISSUING ACCOMMODATION BILLS, WAS FOUND OUT DURING THE COURS E OF SURVEY AT THE APPELLANT 'S PREMISES. 13. AS FAR AS THE ISSUE OF ESTIMATION OF APPELLANT' S INCOME IS CONCERNED, IT IS SEEN THAT THE SAME HAS BEEN DONE ON THE BASIS OF THE DIRECTIONS OF THE HON'BLE ITAT, MUMBAI, WHICH HAS BEEN UPHELD BY THE HONBLE ITAT IN THREE ROUNDS OF APPEALS ON THE SAME ISSUE. THEREFOR E, IN THE APPELLANT'S CASE IT CANNOT BE SAID THAT SOME WILD GUESS HAS BEE N MADE OR THE INCOME OF THE APPELLANT HAS BEEN ESTIMATED ON SOME ASSUMPT ION ETC. THEREFORE, THE JUDGMENTS RELIED UPON BY THE APPELLANT ARE NOT APPLICABLE IN ITS CASE AS THE APPELLANT HAD NOT DISCLOSED INCOME FROM THE BUSINESS OF ISSUING ACCOMMODATION BILLS IN ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION FILED ON 30. 1 1 .1997 AND IT IS ONLY ON THE BASIS OF SURVEY CARRIED OUT IN ITS CASE, IT WAS FOUND THAT THE APPE LLANT HAD NOT DECLARED INCOME' FROM BUSINESS OF ISSUING ACCOMMODATION BILLS. THERE/ORE, IT IS HELD THAT THE APPELLANT HAD CONCEALED THE PARTICULA RS OF ITS INCOME AND THE AO HAS RIGHTLY IMPOSED PENALTY U/S. 27L(L)(C) O F THE L.T. ACT ON THE CONCEALED INCOME. THEREFORE, PENALTY IMPOSED BY THE AO U/S. 271(I)(C) OF THE I. T. ACT AMOUNTING TO RS. 11.Q0.562/- IS CONFI RMED' 5.1 FROM THE ABOVE FACTS IT IS CRYSTAL CLEAR THAT I T WAS ONLY AFTER SURVEY ACTION, CARRIED OUT BY THE DEPARTMENT, IT HAS COME TO THE N OTICE OF THE AO THAT IN-SPITE OF EARNING THE TAXABLE COMMISSION INCOME FROM ENTRY PROVIDING BUSINESS, THE APPELLANT HAD NOT FILED THE RETURN/DECLARED THE INC OME, FOR THE REASON WELL KNOWN TO IT. THE HON'BLE ITAT, WHILE THE ISSUE UNDE R DISPUTE IN THE QUANTUM APPEAL, HAD DULY CONSIDERED THE ALL ASPECTS AS WELL AS THE CONTENTION OF THE APPELLANT AND ACCORDINGLY GIVEN THE CLEAR CUT DIREC TION FOR ESTIMATING ITS COMMISSION INCOME @1% OF THE TOTAL TURNOVER. THE HO N'BLE ITAT ALSO DIRECTED TO DETERMINE THE NET, INCOME, AFTER ALLOWI NG THE ACTUAL EXPENSES, INCURRED FOR PROVIDING ENTRIES TO THE VARIOUS PARTI ES. IN VIEW OF THESE FACTS THIS IS NOT A CASE OF PURELY ESTIMATION OF INCOME, AS HA S BEEN CONTENDED, THEREFORE, NOT TENABLE AND ACCORDINGLY REJECTED. CONSIDERING THE FACT THAT THE ISSUES UNDER APPEAL HAD ALREADY BEEN DECIDED BY THE CIT(A) 1, THANE, AFTER CONSIDERING THE SUBMISSIONS AS WELL AS CASE LAWS RE LIED UPON, IN APPELLANT'S OWN CASE, IN A YR 1997-98 AS ABOVE, WHEREIN THE FAC TS AND CIRCUMSTANCES WERE SIMILAR TO THAT OF PRESENT YEAR, THEREFORE, RE SPECTFULLY FOLLOWING THE SAME PARITY OF REASONING, THE PENALTY OF RS 4,80,482/-, LEVIED U/S 271(L)(C) OF THE I.T. ACT, BY THE AO IS UPHELD AND ALL THE GR OUNDS OF APPEAL, RAISED AS ABOVE, ARE DISMISSED. 8 SAROJ ANIL STEEL (P) LTD 6. THE LD.AR FOR THE ASSESSEE, AT THE TIME OF HEARI NG SUBMITTED THAT THE LD.CIT(A) WAS ERRED IN CONFIRMING PENALTY LEVIE D BY THE AO U/S 271(1)(C) WITHOUT APPRECIATING THE FACT THAT THE NO TICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT IS VAGUE IN NATURE AND THE AO FAILED TO APPLY HIS MIND BEFORE INITIATION OF PENALTY PROCEEDINGS T O FRAME A SPECIFIC CHARGE ON THE ASSESSEE, WHETHER PENALTY PROCEEDINGS HAVE BEEN INITIATED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD.AR FOR TH E ASSESSEE, REFERRING TO NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) DATED 22- 12-2009 SUBMITTED THAT THE AO HAS ISSUED PRINTED FORM OF NOTICE WITHO UT STRIKING OFF IRRELEVANT PORTION IN THE NOTICE. THEREFORE, IT IS A CLEAR CASE OF NON APPLICATION OF MIND BY THE AO BEFORE INITIATION OF PENALTY PROCEEDINGS, THEREFORE, PENALTY ORDER PASSED U/S 271(1)(C) IN PU RSUANCE OF A VAGUE NOTICE IS BAD IN LAW AND LIABLE TO BE QUASHED. IN SUPPORT OF HIS ARGUMENT, HE RELIED UPON THE DECISION OF HONBLE SU PREME COURT IN THE CASE OF SSA EMERALD MEADOWS (2010) 386 ITR 1 (SC). THE ASSESSEE ALSO RELIED UPON THE DECISION OF HONBLE BOMBAY HIG H COURT IN THE CASE OF CIT VS SAMSON PERINCHERRY (2017) 98 CCH 39 AND T HE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNA THA COTTONA & GINNING FACTORY (2013) 369 ITR 565 (KAR). 7. ON THE OTHER HAND, THE LD.DR STRONGLY SUPPORTED ORDER OF THE 9 SAROJ ANIL STEEL (P) LTD LD.CIT(A) AND SUBMITTED THAT THE ASSESSEE HAS CONCE ALED PARTICULARS OF ITS INCOME WHICH IS EVIDENT FROM THE FACT THAT THE AO HAS GATHERED INFORMATION ABOUT CONCEALMENT OF INCOME IN PURSUANC E OF SURVEY ACTION CONDUCTED U/S 133A WHERE IT WAS NOTICED THAT THE AS SESSEE WAS INVOLVED IN PROVIDING ACCOMMODATION ENTRIES WITHOUT ACTUAL DELIVERY OF GOODS FOR WHICH THE AO HAS ASSESSED INCOME BY ESTIM ATING THE PROFIT FROM TOTAL TURNOVER FOR WHICH THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION. THEREFORE, THE AO WAS RIGHT IN LEVYIN G PENALTY U/S 271(1)(C) AND HIS ORDER SHOULD BE UPHELD. 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF LOWER AUTHORI TIES. THE ISSUE OF NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) WITHOUT STRI KING OFF IRRELEVANT PORTION IN THE NOTICE IS NO LONGER RES INTEGRA. TH E HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNI NG FACTORY (SUPRA) HAS CONSIDERED THE ISSUE IN THE LIGHT OF NOTICE ISS UED U/S 274 R.W.S. 271(1)(C) AND HELD THAT IF THE AO ISSUED A VAGUE NO TICE, THEN IT IS A CASE OF NON APPLICATION OF MIND BY THE AO BEFORE INITIAT ION OF PENALTY PROCEEDINGS AND HENCE, PURSUANT TO SUCH VAGUE NOTIC E, PENALTY IMPOSED U/S 271(1)(C) CANNOT BE SUSTAINED UNDER LAW. THE H ONBLE SUPREME COURT IN THE CASE OF CIT VS SSA EMERALD MEADOWS (SU PRA) HAS CONSIDERED SIMILAR ISSUE AND AFTER CONSIDERING RELE VANT FACTS, BY FOLLOWING THE DECISION OF HONBLE KARNATAKA HIGH CO URT IN THE CASE OF 10 SAROJ ANIL STEEL (P) LTD MANJUNATHA COTTON & GINNING FACTORY (SUPRA) HELD TH AT NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) WAS BAD IN LAW AS IT DID NOT S PECIFY UNDER WHICH LIMB OF SECTION 271(1)(C) PENALTY PROCEEDINGS HAD BEEN I NITIATED. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SAM SON PERINCHERRY (SUPRA) HAS CONSIDERED SIMILAR ISSUE AND BY FOLLOWI NG THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNA THA COTTON & GINNING FACTORY (SUPRA) HAS TAKEN SIMILAR VIEW AND HELD THAT IF THE AO ISSUED A VAGUE NOTICE WITHOUT SPECIFYING THE CHARGE UNDER WHICH PENALTY PROCEEDINGS HAVE BEEN INITIATED, THEN THE WHOLE PEN ALTY PROCEEDINGS IS VITIATED AND CONSEQUENT PENALTY ORDER IS BAD IN LAW . IN THIS CASE, ON PERUSAL OF FACTS AVAILABLE ON RECORD, WE FIND THAT THE AO HAS INITIATED PENALTY PROCEEDINGS BY ISSUING NOTICE DATED 22-12-2 009 WHEREIN THE AO HAS PUT A RIGHT MARK ON THE PRINTED PORTION OF NOTI CE WHICH STATES FOR CONCEALING THE PARTICULARS OF YOUR INCOME AND / OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME. WE FURTHER NOTICE THA T EVEN IN THE ASSESSMENT ORDER, THE AO HAS INITIATED PENALTY PROC EEDINGS FOR CONCEALMENT OF INCOME AND FOR FURNISHING OF INACCUR ATE PARTICULARS OF INCOME. THIS LAPSE IS CONTINUED EVEN IN PENALTY OR DER WHERE THE AO HAS LEVIED PENALTY UNDER BOTH THE LIMBS, I.E. CONCEALME NT OF PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT NOTICE ISSUED BY THE AO U/S 274 R.W.S. 271(1)(C) IS VAGUE AND WHICH WAS ISSUED WITH OUT APPLICATION OF 11 SAROJ ANIL STEEL (P) LTD MIND AND HENCE, WHOLE PENALTY PROCEEDINGS IS VITIAT ED. CONSEQUENTLY, THE PENALTY LEVIED BY THE AO U/S 271(1)(C) CANNOT B E SUSTAINED. ACCORDINGLY WE DIRECT THE AO TO DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE I.T. ACT, 1961. 9. THE FACTS AND ISSUE IN ITA NO.5597/MUM/2014 FOR AY 1997-98 ARE IDENTICAL TO THE FACTS AND ISSUE CONSIDERED IN THE PRECEDING PARAGRAPHS IN ITA NO.5106/MUM/2017. THE REASONS GIVEN BY US I N PRECEDING PARAGRAPHS SHALL MUTATIS MUTANDIS APPLY TO THIS APP EAL ALSO. THEREFORE, FOR SIMILAR REASONS, WE DIRECT THE AO TO DELETE PEN ALTY LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST AUGUST, 2018. SD/- SD/- (MAHAVIR SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 21 ST AUGUST, 2018 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER SR.PS, ITAT, MUMBAI