Kailash Chander Malhotra HUF, New Delhi V. ACIT circle-45(1), New Delhi

ITA 5960/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5923 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 10-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Question of law; Initiation of penalty proceedings
• Section: 271(1)(c); 274; 73; 13; 69; 27

Judgement Text

IN TH E INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 5960 /DEL/201 9 ASSESSMENT YEAR : 20 14 - 15 KAILASH CHANDER MALHOTRA, HUF, L - 7A (LGF), SOUTH EXTE NSION PART - 2, NEW DELHI. PAN: A AAHK4297H VS ACIT, CIRCLE - 45(1), NEW DELHI. (APP ELL A NT ) (RESPONDENT) A SSESSEE BY : SHRI R AJ KUMAR GUPTA, CA RE VENUE BY : SHRI R.K. GUPTA, SR. DR DATE OF HEARING : 2 1.09. 20 20 DATE OF PRONOUNCEMENT : 29 . 0 9 . 20 20 ORDER PER R. K. PANDA, AM : THIS APPEAL FI LED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29 TH APRIL 2019 OF THE CIT (A) - 15 , NEW DELHI , RELATING TO ASSESSMENT YEAR 2014 - 15 . T HE GROUNDS RAISED BY THE ASS ESSEE ARE AS UNDER : - 1. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE INITIATION OF PENALTY PROCEEDINGS ARE ILLEGAL AND UNSUSTAINABLE IN LAW, MORE SO, AS THE NOTICE ISSUED FOR INITIATING IMPUGNED PROCEEDINGS IS FATALLY DEFECTIVE FOR NOT SPECIFYING THE SPEC IFIC CHARGE I.E. EITHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. ITA NO. 5960 /DEL/201 9 2 2. THAT WITHOUT PREJUDICE, THE IMPUGNED PENALTY ORDER IS VITIATED IN LAW FOR IMPOSING PENALTY FOR BOTH THE CHARGES AS PER FINDINGS IN PAR A - 8 OF IMPUGNED PENALTY ORDER AS: - HENCE, I AM SATISFIED THAT THIS IS A FIT CASE FOR IMPOSITION OF PENALTY FOR CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHINS INACCURATE PARTICULARS OF INCOME AMOUNTING TO RS.24,00,000/ - AS PER THE PROVISIONS OF SEC.2 71(L)(C) OF THE ACT 3. THAT WITHOUT PREJUDICE, EVEN ON MERITS ALSO, UNDER THE FACTS AND CIRCUMSTANCES, NO PENALTY U/S.271(L)(C) SHOULD HAD BEEN LEVIED, HENCE THE IMPUGNED ORDER LEVYING PENALTY OF RS.8,15,760/ - @100% OF THE TAX SOUGHT TO BE EVADED NEEDS T O BE QUASHED. 2. F ACTS OF THE CASE , IN BRIEF , ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 19 TH JULY 2014 DECLARING TOTAL INCOME AT RS. 2 , 46 , 6 7, 670 / - . T HE AO COMPLETED THE ASSESSMENT DETERMINING THE TOTAL INCOME AT RS. 2 , 7 0,67, 670 / - WHEREIN HE MADE AN EDITION OF RS. 24 LAKHS TREATING THE AMOUNT OF RS. 24 LAKHS CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE AS INCOME UNDER SECTION 69 A AS AGAINST AGRICULTURAL INCOME DECLARED BY THE ASSESSEE . T HE ASSESSEE DID NOT PREFER ANY APPEAL AGAI NST THE SAID ADDITION . T HEREAFTER , THE AO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C) OF THE IT ACT . RE JECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND HOLDING THAT THE ADDITIONAL INCOME DISCLOSED BY THE ASSESSEE HAS COME ONLY AFTER IT WAS DETECTED BY THE AO AND , THEREFORE , THE ASSESSEE HAS C ONCEALE D THE PARTICULAR S OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME , THE AO LEVIED PENALTY OF RS. 8 , 15 , 760 / - BEING THE MINIMUM PENALTY UNDER SECTION 271 ( 1 )(C) OF THE IT ACT . 3. I N APPE AL , THE LD. CIT (A) UPHELD THE PENALTY SO LEVIED BY THE AO. W HILE DOING SO HE ALSO REJECTED THE CONTENTION OF THE ASSESSEE BEFORE HIM THAT SHOW C AUSE ITA NO. 5960 /DEL/201 9 3 N OTICE ISSUED DID NOT SPELL OUT ANY SPECIFIC CHARGES AS TO WHETHER PENALTY PROCEEDINGS WERE BEING INITIATED FOR CONCEALMENT OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME . A CCORDING TO HIM , THE VARIOUS DECISIONS RELIED ON BY THE L D. COUNSEL FOR THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE SINCE IN THIS CASE THE ASSESSEE HAD PRIOR KNOW LEDGE OF CAUSE OF ACTION BEFORE LE VYING OF PENALTY . I N OTHER WORDS , THE ASSESSEE WAS AWARE OF THE FACTS OF SECTION 271 ( 1 )( C ) UNDER WHICH PENALTY PROCEEDINGS WERE PROPOSED TO BE INITIATED SINCE IT IS DISCERNIBLE FROM THE ASSESSMENT ORDER . T HEREFORE , ACCORDI NG TO THE L D. CIT(A), WHERE SATISFACTION OF THE AO WHILE COMPLETING THE ASSESSMENT HAS BEEN CORRECTLY RECORDED , THEN , MERELY BECAUSE OF INAPPROPRIATE PORTION HAS NOT BEEN STRUCK OFF IN THE NOTICE , THE PENALTY PROCEEDINGS WOULD NOT BECOME INVALID . 4. A GGRI EVED WITH SUCH ORDER OF THE CIT(A), T HE ASSESSEE IS IN APPEAL BEFORE T HE TRIBUNAL . 5. THE L D. COUNSEL FOR THE ASSESSEE D REW THE ATTENTION OF THE B ENCH TO PAGE 2 OF THE SYNOPSIS WHICH CONTAINS THE FIRST SHOW - C AUSE N OTICE UNDER SECTION 271 (1)(C) OF THE A CT DATED 26 TH DECEMBER , 2016 . H E SUBMITTED THAT A PERUSAL OF THE SAME WOULD SHOW THAT THE INAPPROPRIATE WORDS IN THE SAID NOTICE HAS NOT BEEN STRUCK OFF AND THE AO HAS, IN THE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271 OF THE IT A CT . DATED 26TH DE CEMBER 2016 HAS MENTIONED AS UNDER : - TO KALLASH CHAN D ER MAL HOTRA ( HU F ) J - 3/ 127 - 128 , RAJO URI GARDEN DELHI 110027 . ITA NO. 5960 /DEL/201 9 4 WHEREAS IN THE COURSE OF PROCEEDING BEFORE ME FOR THE ASSESSMENT YEAR 2014 - 15 IT APPEARS TO ME THAT YOU : - _ * HAVE CON C E AL ED THE PARTICULAR S OF YOUR IN COME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME IN ITEMS OF EXPLANATION 1,2,3,4,AND 5. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 2:30 P.M. ON 17/01/2017 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE UND ER 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 THROUGH AUTHORIZED REPRESENTATIVE YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THAT SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECTION 271(1) (C) . 6. REFERRING TO THE SECOND SHOW CAUSE NOTICE DATED 2 ND DECEMBER 2017 , HE SUBMITTED THAT THE AO HAS NOT . REFER RE D TO THE FIRST SHOW C AUSE N OTICE AND , HERE ALSO , THERE IS NO MENTION AS TO UNDER WHICH L IMB OF THE PROVISIO NS OF SECTION 271 (1)(C) THE PENALTY HAS BEEN INITIATED . R EFERRING TO P ARA 8 OF THE ASSESSMENT ORDER , THE L D. COUNSEL D REW THE ATTENTION OF THE B ENCH TO THE OPERATIVE PARA AND SUBMITTED THAT HERE ALSO THE AO IS NOT CLEAR AS TO UNDER WHICH L IMB OF T HE PROVISIONS OF SECTION 27 1(1)(C) OF THE A CT THE PENALTY IS BEING INITIATED . R EFERRING TO THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF PCIT VS S AHARA LIFE INSURANCE COMPANY LTD., VIDE ITA 426 / 2019 , ORDER DATED 2 ND AUGUST 2019 , HE SUBMITTED THAT THE H ON BLE HIGH COURT IN THE DECISION HAS UPHELD THE ORDER OF THE TRIBUNAL QUASHING THE PENALTY PROCEEDINGS ON THE GROUND THAT NOTICE ISSUED BY THE AO WOULD BE BAD IN LAW IF IT DID NOT SPECIFY UNDER WHICH LIMIT OF SECTION 271 ( 1 )(C) THE PENALTY PROCEE DINGS HAVE BEEN INITIATED , I.E., W HE THER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME . ITA NO. 5960 /DEL/201 9 5 R EFERRING TO THE DECISION OF THE DELHI B ENCH OF THE TRIBUNAL IN THE CASE OF SA NJAY MITRA VS. DCIT, IN I TA NO. 5206 /DEL/ 2016 , ORDER DATED 0 1 . 10 . 2018 , HE SUBMITTED THAT UNDER IDENTICAL CIRCUMSTANCES , T HE TRIBUNAL HAS QUASHED THE PENALTY PROCEEDINGS ON THE GROUND THAT INAPPROPRIATE WORDS IN THE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271 .. HAVE NOT BEEN STRUCK OFF . RE LYING ON VARIOUS DECISIONS PLACED IN THE PAPER BOOK / SYNOPSIS , THE LD. COUNSEL SUBMITTED THAT SINCE INAPPROPRIATE WORDS HAVE NOT BEEN STRUCK OFF FROM THE PENALTY NOTICE AND IT IS NOT CLEAR AS TO UNDER WHICH LIMB THE AO HAS INITIATED PENALTY PROCEEDINGS U NDER SECTION 271 (1)(C), THEREFORE, THE PENALT Y SO LEVIED BY THE AO AND UPHELD BY THE CIT(A) SHOULD BE DELETED . 7. SO FAR AS THE MERIT OF THE CASE IS CONCERNED , HE SUBMITTED THAT IT WAS A BONA FIDE CLAIM MADE BY THE ASSES SEE WHICH DOES NOT INVITE THE RIGOU RS OF PENALTY PROCEEDINGS UNDER SECTION 271 ( 1 )(C) OF THE A CT . H E SUBMITTED THAT THE ASSESSEE IN THE INSTANT CASE HAS DECLARED AN INCOME OF RS. 24 LACS AS AGRICULTURAL INCOME AND THE AMOUNT WAS RECEIVED THROUGH CHEQUE FROM M/S N A TURE F O RMS & REAL ESTATE PVT. LTD., AS RENT O F AGRICULTURAL LAND TO BE USED FOR AGRICULTURAL PURPOSES FOR CULTIVATION OF ALLAVERA BY THE SAID COMPANY . R EFERRING TO THE PROVISIONS OF SECTION 2 (1A)(A) , HE SUBMITTED THAT RENT DERIVED FROM LAND SITUATED IN INDIA USED FOR AGRICULTURAL PURP OSES IS AGRICULTURAL INCOME . H E SUBMITTED THAT THERE WAS NO DISPUTE TO THE FACT THAT THE ASSESSEE O WNS AGRICULTURAL LAND AND PRIOR TO ASSESSMENT YEAR 2014 - 15 THE ASSESSEE HAD BEEN CARRYING OUT AGRICULTURAL ACTIVITY HIMSELF AND ITA NO. 5960 /DEL/201 9 6 WAS DECLARING AGRICULTURAL IN COME OF RS. 5 , 23 , 500 / - IN ASSESSMENT YEAR 2012 - 13 AND RS. 5 , 24 , 500 / - IN ASSESSMENT YEAR 2013 - 14 WHICH WAS ACCEPTED BY THE D EPARTMENT . HE SUBMITTED THAT ALTHOUGH THE ASSESSEE HAD A STRONG CASE IN HIS FAVOUR , HOWEVER , TO BUY PEACE OF MIND HE HAD ACCEPTED THE A DDITION MADE BY THE AO AND PAID TAXES THE RE ON . R ELYING ON VARIOUS DECISIONS , HE SUBMITTED THAT PENALTY UNDER SECTION 271 (1)(C) OF THE A CT IS NOT LEVIA BLE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE . 8. T HE LD. DR, ON THE OTHER HAND , HEAVILY RELIED ON TH E ORDER OF THE CIT (A). S O FAR AS THE ARGUMENT OF THE L D. COUNSEL THAT THE INAPPROPRIATE WORDS IN THE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271 ( 1 )(C) OF THE A CT IS CONCERNED , I.E., UNDER WHICH LIMB THE AO HAS INITIATED PENALTY PROCEEDINGS , THE L D. DR, REFERRING TO THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF M AK D ATA PRIVATE LIMITED VS CIT , REPORTED IN 358 ITR 593, DREW THE ATTENTION OF THE B ENCH TO PARA 10 OF THE ORDER WHICH READS AS UNDER : - 10. THE AO HAS TO SATISFY WHETHER THE PEN ALTY PROCEEDINGS BE INITIATED OR NOT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE AO IS NOT REQUIRED TO RECORD HIS SATISFACTION IN A PARTICULAR MANNER OR REDUCE IT INTO WRITING. THE SCOPE OF SECTION 271(L)(C) HAS ALSO BEEN ELABORATELY DISCUSSED BY THIS COURT IN UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS (2008) 13 SCCO 369 AND CIT VS. ATUL MOHAN BINDAL (2009) 9 SCC 589. 9. HE SUBMITTED THAT AS PER THE ABOVE DECISION , THE AO IS NOT REQUIRED TO RECORD HIS SATISFACTION IN A PARTICULAR MANNER OR REDUCE IT INTO WRITING . T HEREFORE , THE ARGUMENT OF THE L D. COUNSEL FOR THE ASSESSEE SHOULD BE REJECTED AND THERE IS NO ITA NO. 5960 /DEL/201 9 7 INF IRMITY IN THE ASSESSMENT AND PENALTY ORDER OF THE AO AS WELL AS IN THE NOTICE ISSUED WHILE INITIATING PENALTY PROCEEDINGS . 10. S O FAR AS THE MERIT OF THE CASE IS CONCERNED , HE SUBMITTED THAT THE ASSESSEE HAS WRONGLY CLAIMED BOG U S AGRICULTURAL INCOME AND THE AO HAS DISCUSSED THIS ISSUE ELABORATELY AND MADE THE ADDITION WHICH THE ASSESSEE ACCEPTED AND NOT PREFERRED ANY APPEAL AND PA I D THE TAXES . H E SUBMITTED THAT BUT FOR THE INVESTIGATION THE ASSESSEE WOULD NOT HAVE OFFERED THE INCOME TO TAX . H E ACCORDINGLY SUBMITTED THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE , THE PENALTY LEVIED BY THE AO AND UPHELD BY THE CIT(A) IS FULLY JUS TIFIED . 1 1 . WE HAVE CONSIDERED THE R IVAL ARGUMENTS MADE BY BOTH THE SIDES , PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE . W E HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US . W E FIND THE FIRST ISS UE TO BE DECIDED IN THE GROUNDS RAISED BY THE ASSESSEE IS REGARDING THE VALIDITY OF INITIATION OF PENALTY PROCEEDINGS IN ABSENCE OF NON - STRIKING OF THE INAPPROPRIATE WORDS IN THE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271 ( 1 )(C) OF THE A CT . A PER USAL OF THE PENALTY NOTICE ISSUED UNDER SECTION 274 RE A D WITH 271 OF THE ACT DATED 26 TH DECEMBER 2016 WHICH HAS ALREADY BEEN REPRODUCED IN THE PRECEDING PARAGRAPHS SHOWS THAT THE INAPPROPRIATE WORDS HAVE NOT BEEN STRUCK OFF AND IT IS NOT CLEAR AS TO UNDER WHICH LIMB OF PROVISIONS OF SECTION 271(1)(C) THE AO HAS INITIATED PENALTY PROCEEDINGS , I.E., FOR CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. ITA NO. 5960 /DEL/201 9 8 1 2 . S IMILARLY , THE SUBSEQUENT NOTICE ISSUED BY THE AO ON 2 ND JUNE 2017 DOES NOT SHOW ANYTHING AND THE AO SIMPLY ASKED THE ASSESSEE TO SHOW CAUSE A S TO WHY PENALTY UNDER SECTION 271 (1)(C) SHOULD NOT BE IMPO SED IN YOUR CASE . WE FIND P ARA 8 OF THE PENALTY ORDER READS AS UNDER : - SINCE THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME, PENALT Y PROCEEDINGS U/S 271(L)(C) OF THE ACT WERE INITIATED. MOREOVER, THE ASSESSEE'S DISCLOSURE FOR ADDITIONAL INCOME HAS COME ONLY AFTER IT WAS DETECTED BY A O . HENCE, I AM SATISFIED THAT THIS IS A FIT CASE FOR IMPOSITION OF PENALTY FOR CONCEALMENT OF PARTICULA RS OF INCOME AND FURNISHING INACCURATE PARTICULARS IN RESPECT OF HIS INCOME AMOUNTING TO RS. 24,00,000/ - AS PER THE PROVISIONS OF SEC. 271 (1 ) ( C) OF THE ACT. 1 3 . T HEREFORE , WE FIND MERIT IN THE ARGUMENT OF THE L D. COUNSEL THAT THE AO IS NOT SURE AS TO UND ER WHICH LIM B HE HAS INITIATED PENALTY PROCEEDINGS UNDER SECTION 271 ( 1 )(C) OF THE A CT , I.E., FOR CONCEALMENT OF INCOME OR FOR F URNISHING INACCURATE PARTICULARS OF INCOME . W E FIND IDENTICAL ISSUE HAD COME UP BEFORE T HE HON BLE DELHI HIGH COURT IN THE CASE O F PCIT VS M/S SAHARA INDIA LIFE INSURANCE COMPANY LIMITED . W E FIND THE HON BLE HIGH COURT VIDE ITA 4 26 / 2019 , ORDER DATED 2 ND AUGUST 2019 AT PARA 21 OF THE ORDER HAS OBSERVED AS UNDER : - 21. T HE RESPONDENT HAD CHALLENGED THE UPHOLDING OF THE PENALTY IMPOSED UNDER SECTION 271(1) (C) OF THE ACT. WHICH WAS ACCEPTED BY THE I TAT. 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 ABOV E JUDGMENT IN THE SUBSEQUENT ORDER IN COMMISSIONER OF INCOME TAX V. SSA S 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. ITA NO. 5960 /DEL/201 9 9 1 4 . S IMILARLY , WE FIND THE CO - ORDINATE B ENCH OF THE TRIBUNAL IN THE CASE OF SANJAY MI TRA, VIDE ITA NO. 5206 / DEL / 2016 , ORDER DATED 1 ST OCTOBER , 2018 , WHILE DECIDING IDENTICAL ISSUE HAS HELD AS UNDER : - 15. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE S IDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ONLY ISSUE TO BE DECIDED IN THE GROUNDS OF APPEAL IS REGARDING THE SUSTAINABLE OF PENALTY LEVIED U/S 271(1)(C) WHEN THE INAPPROPRI ATE WORDS IN THE NOTICE ISSUED U/S 274 R.W.S. 271 HAVE NOT BEEN STRUCK OFF. A PERUSAL OF THE NOTICE ISSUED U/S 274 R.W.S. 271 DATED 31.03.2004 SHOWS THAT THE INAPPROPRIATE WORDS IN THE SAID NOTICE HAVE NOT BEEN STRUCK OFF AND IT IS A PRINTED NOTICE. EVEN T HE LAST LINE OF THE SAID NOTICE ONLY SPEAKS OF SECTION 271 AND DOES NOT EVEN MENTION OF SECTION 271(1)(C) OF THE I.T. ACT. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THIS BENCH OF THE TRIBUNAL IN THE CASE OF SAHIWAL INVESTMENT & TRADING CO. VS. ITO VIDE ITA NO.4913/DEL/2015 FOR ASSESSMENT YEAR 2006 - 07 ORDER DATED 18.07.2018 TO WHICH BOTH OF US PARTIES. WE FIND THE TRIBUNAL IN THE SAID DECISION WHILE ALLOWING THE ADDITIONAL GROUND FILED BY THE ASSESSEE HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER : - '12. ADDITIONAL GROUND NO. (II) IS RELATING TO ABSENCE OF SPECIFIC CHARGE POINTING OUT IN THE NOTICE. IT IS PERTINENT TO NOTE HERE THAT THE PENALTY ORDER IS BASED ON FURNISHING OF INACCURATE PARTICULARS BUT THE NOTICE IS NOT SPECIFYING EXACTLY ON WHICH LIMB THE PENALTY U/S 271(1)(C) HAS BEEN INITIATED. FROM THE NOTICE DATED 30.06.2013 PRODUCED BY THE LD. AR DURING THE HEARING, IT CAN BE 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. THE ISSUE IS SQUARELY COVERED BY THE DECISI ON OF THE HON'BLE SUPREME COURT IN CASE OF M/S SSA' EMERALD MEADOWS. THE EXTRACT OF ITA NO.5206/DEL/2016 THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN M/S. SSA' EMERALD MEADOWS ARE AS UNDER WHICH WAS CONFIRMED BY THE HON'BLE APEX COURT: '3. THE TRIB UNAL 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. 5960 /DEL/201 9 10 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 DETER MINATION 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 ON MERIT OF TH E CASE. THE PENALTY U/S 271(1)(C) OF THE ACT IS QUASHED.' 16. SINCE IN THE INSTANT CASE ALSO THE INAPPROPRIATE WORDS IN THE PENALTY NOTICE HAS NOT BEEN STRUCK OFF AND THE NOTICE DOES NOT SPECIFY AS TO UNDER WHICH LIMB OF THE PROVISIONS, THE PENALTY U/S 271 (1)(C) HAS BEEN INITIATED, THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE PENALTY LEVIED U/S 271(1)(C) IS NOT SUSTAINABLE AND HAS TO BE DELETED. ALTHOUGH THE LD. DR HAS RELIED ON VARIOUS DECISIONS TO THE PROPOSITION THAT MERE NON - STRIKING OFF OF THE INAPPROPRIATE WORDS WILL NOT INVALIDATE THE PENALTY PROCEEDINGS, HOWEVER, ALL THESE DECISIONS ARE OF NON - JURISDICTIONAL HIGH COURT DECISIONS. THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL RELIED ON BY THE LD. DR IS PRIOR TO THE DECISION OF THE HON'BLE K ARNATAKA HIGH COURT IN THE CASE OF SSA'S EMERALD MEADOWS (SUPRA) WHERE THE SLP FILED BY THE REVENUE HAS BEEN DISMISSED. SINCE THERE IS NO DECISION OF ITA NO.5206/DEL/2016 THE JURISDICTIONAL HIGH COURT ON THIS ISSUE, THEREFORE, WE FIND MERIT IN THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT IF TWO VIEWS ARE AVAILABLE ON A PARTICULAR ISSUE, THE VIEW WHICH IS FAVOURABLE TO THE ASSESSEE HAS TO BE FOLLOWED IN THE LIGHT OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF VEGETABLE PRODUCTS LIMITED (SUPRA). WE, THEREFORE, SET - ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO CANCEL THE PENALTY SO LEVIED. 1 5 . THE DECISION IN THE CASE OF M AK DATA PRIVATE LIMITED RELIED ON BY THE L D. D R IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE SINCE THE ISSUE IN THAT CASE WAS SCOPE OF E XPLANATION - 1 TO SECTION 271 ( 1 )(C) OF THE A CT AND VOLUNTARY SURRENDER OF INCOME TO BUY P EACE OF M IND . T HERE WAS NO OCCASION ON THE PART OF THE HON BLE SUPREME COURT TO DECIDE ON THE ISSUE OF NON - ST RI KING OF F O F INAPPROPRIATE WORDS IN ITA NO. 5960 /DEL/201 9 11 THE NOTICE ISSUED WHILE INITIATING PENALTY PROCEEDINGS . T HEREFORE , THE DECISION RELIED ON BY THE LD. DR IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE . 1 6 . I N THIS VIEW OF THE MATTER , WE HOLD THAT THE PENALTY PROCEEDINGS INITI ATED BY THE AO IS NOT IN ACCORDANCE WITH L A W AND , THEREFORE , THE SAME HAS TO BE QUASHED . S INCE THE ASSESSEE SUCCEEDS ON THIS LEGAL GROUND , THE GROUND S ON MERIT BECOME ACADEMIC IN NATURE AND , THEREFORE , THE SAME IS NOT B EING ADJUDICATED. 1 7 . IN THE RESULT , THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER P RONOUNCED IN THE OPEN COURT ON 29 .09.2020. SD/ - SD/ - ( SU DHANSHU SRIVASTAVA ) ( R. K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH SEPTEMBER, 2020. DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI