M/s. Sudhir Transformers Ltd., Bangalore V. ACIT, New Delhi

ITA 597/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1166 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 04-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAINA SOIN KAPIL SENIOR
• Keywords: Opportunity of being heard; Principle of natural justice; Question of law; Initiation of penalty proceedings; Reasonable cause; Set aside
• Section: 27; 271(1)(c); 43B; 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.597 /DEL./2016 (ASSESSMENT YEAR : 2005-06) M/S. SUDHIR TRANSFORMERS LTD., VS. ACIT, CENTRAL C IRCLE 4, 31, BOMMASANDRA INDSUTRIAL AREA, (ERSTWHILE CC 2 5), BANGALORE 560 099. NEW DELHI. (PAN : AAACI4556J) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KARAN KUMAR, CA REVENUE BY : MS. NAINA SOIN KAPIL, SENIOR DR DATE OF HEARING : 21.08.2019 DATE OF ORDER : 13.09.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. SUDHIR TRANSFORMERS LTD. (HEREINAF TER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL SOU GHT TO SET ASIDE THE IMPUGNED ORDER DATED 01.02.2015 PASSED BY THE COMMI SSIONER OF INCOME-TAX (APPEALS)-23, NEW DELHI AFFIRMING THE PENALTY ORDER DATED 18.03.2014 PASSED U/S 271(1)(C) OF THE INCOME -TAX ACT, 1961 (FOR SHORT THE ACT), QUA THE ASSESSMENT YEAR 2005 -06 ON THE GROUNDS INTER ALIA THAT :- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN UPHOL DING THE LEVY ITA NO.597/DEL./2016 2 OF PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE I NCOME TAX ACT AMOUNTING TO RS.94,250/-. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS FAILED TO APPRECIATE THAT, THERE WAS NEITHER FU RNISHING OF ANY INACCURATE PARTICULARS OF INCOME NOR COULD IT BE VA LIDLY HELD THAT THERE WAS ANY CONCEALMENT OF INCOME ON THE FACTS OF THE CASE SO AS TO SUSTAIN THE LEVY OF PENALTY. 2.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FURTHER ERRED IN LAW AND ON FACTS BY FAILING TO APPRECIATE THAT NO SATISFACTION HAS BEEN RECORDED SO AS TO ENTAIL T HE LEVY OF PENALTY AND AS SUCH, THE ORDER PASSED BY LEARNED AS SESSING OFFICER IS BAD IN LAW AND THE PENALTY SUSTAINED IS LIABLE T O BE CANCELLED. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS FAILED TO APPRECIATE THE BASIC FACT THAT A SUM OF RS.2,57,569/- REPRESENTED THE DEDUCTION U/S 43B ON ACCOUNT OF FOL LOWING: CENTRAL SALES TAX - RS. 64,484.00 LATE PAYMENT OF E.S.I. - RS. 1,730.00 KARNATAKA SALES TAX - RS.1,91,355.00 TOTAL - RS.2,57,569.00 DEDUCTION U/S 43B WERE DULY DISCLOSED BY THE APPELL ANT COMPANY, AND THERE COULD BE NO BASIS MUCH LESS VALI D BASIS TO DISALLOW THE SAME AND FURTHER IMPOSITION OF PENALTY IN MISCONCEIVED AND UNSUSTAINABLE IN LAW AND SHOULD BE DELETED, AS SUCH. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE ISSUE AT HAND ARE : ASSESSEE COMPANY IS A LIMITED COMPANY EN GAGED IN THE MANUFACTURE AND SALES OF ELECTRICAL TRANSFORMERS. ON THE BASIS OF ASSESSMENT ORDER FRAMED UNDER SECTION1 43 (3) READ WITH SECTION 153C OF THE ACT, ASSESSING OFFICER (AO) MAKING DISALLOWA NCE OF RS.45,16,261/- OUT OF WHICH ADDITION TO THE TUNE OF RS.2,57,569/- ON ACCOUNT OF UNPAID CENTRAL SALES-TAX, LOW PAYMENT OF ESI AND ON ACCOUNT OF LATE PAYMENT OF KARNATAKA SALES-TAX WAS CONFIRME D, INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. DECL INING THE CONTENTIONS ITA NO.597/DEL./2016 3 RAISED BY THE ASSESSEE THAT THE ISSUE IN QUESTION I S QUA INADVERTENT CLAIM OF U/S 43B OF THE ACT BY THE ASSESSEE IN WHICH PENA LTY PROCEEDINGS U/S 271(1)(C) WERE NOT ATTRACTED, AO PROCEEDED TO LEVY THE PENALTY TO THE TUNE OF RS.94,250/- BY MAKING FOLLOWING COMPUTATION :- CONCEALED INCOME (773635+240750) : RS.2,57,569/- TAX SOUGHT TO BE EVADED : RS. 94,252/- MINIMUM PENALTY @ 100% : RS. 94,252/- MAXIMUM PENALTY @ 300% : RS.2,82,756/- 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS CONFIRMED THE PENALTY BY DISMISSING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UP ON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF TH E FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, THE AO HAS INITIALLY MADE DISALLOW ANCE OF RS.45,16,260/- CLAIMED AS EXPLAINED BY THE ASSESSEE OUT OF WHICH RS.2,57,569/- HAS BEEN CONFIRMED BY THE LD. CIT (A) CLAIMED BY THE ASSESSEE ON ACCOUNT OF CENTRAL SALES-TAX, LATE PAYM ENT OF ESI AND KARNATAKA SALES-TAX. IT IS ALSO NOT IN DISPUTE THA T AUDITED BALANCE SHEET HAS BEEN FILED AND ACCEPTED BY THE REVENUE. 6. IN THE BACKDROP OF THE AFORESAID UNDISPUTED FACTS & CIRCUMSTANCES OF THE CASE, ORDER PASSED BY THE LOWE R REVENUE AUTHORITIES AND ARGUMENTS ADDRESSED BY THE LD. AUTH ORIZED ITA NO.597/DEL./2016 4 REPRESENTATIVES OF THE PARTIES TO THE APPEAL, THE S OLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS:- AS TO WHETHER THE ASSESSEE HAS CONCEALED PARTICULA RS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS O F SUCH INCOME DURING ASSESSMENT PROCEEDINGS? 7. LD. AR FOR THE ASSESSEE CONTENDED THAT THE AO IN ORDER TO INITIATE THE PENALTY PROCEEDINGS HAS FAILED TO SPECIFY IN TH E SHOW-CAUSE NOTICE ISSUED U/S 271(1)(C)/274 OF THE ACT IF THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE P ARTICULARS OF INCOME AND RELIED UPON THE DECISIONS OF HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTO RY-359ITR 565, CIT VS. SSAS EMERALA MEADOWS -73 TAXMANN.COM 241 (KAR.) (REVENUES SLP DISMISSED IN 242 TAXMAN 180) AND HONBLE HIGH COURT OF DELHI IN PR. CIT VS. SAHARA I NDIA LIFE INSURANCE COMPANY LTD. IN ITA 475/2019 ORDER DATED 02.08.2019. 8. IN ORDER TO PROCEED FURTHER, WE WOULD LIKE TO PE RUSE THE NOTICE ISSUED BY AO U/S 274 READ WITH SECTION 271(1 )(C) OF THE ACT TO INITIATE THE PENALTY PROCEEDINGS WHICH IS EXTRAC TED AS UNDER FOR READY PERUSAL:- NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961. ASSTT. COMMISSION OF INCOME TAX, CENTRAL CIRCLE-25, NEW DELHI. ITA NO.597/DEL./2016 5 DATED: 26.12.2011 TO M/S SUDHIR INFRA VIDYUT LTD. 507, INTERNATIONAL TRADE TOWER, NEHRU PLACE, NEW DELHI -110 019. WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2005-06 IT APPEARS TO ME THAT YOU:- HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE UNDER SECTION 142(1)/143(2) OF THE INCOME TA X ACT, 1961 DATED HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME IN TERMS OF EXPLANATION 1, 2,3,4 AND 5. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 10. 30 AM/PM ON 20.01.2012 AND SHOW CAUSE WHY AN ORDER 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 THROUGH AUTHORIZED REPR ESENTATIVES YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERS BEFORE ANY SUCH ORDER IS MADE UND ER SECTION 271. SD/- ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 25, NEW DELHI. 9. BARE PERUSAL OF THE NOTICE ISSUED U/S 274 READ W ITH SECTION 271(1)(C) OF THE ACT, EXTRACTED ABOVE, IN ORDER TO INITIATE THE PENALTY PROCEEDINGS AGAINST THE ASSESSEE GOES TO PROVE THAT THE AO HIMSELF WAS NOT AWARE / SURE AS TO WHETHER HE IS ISSUING NOTICE TO INITIATE THE PENALTY PROCEEDINGS EITHER FOR CONCEALMENT OF PART ICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME 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 ITA NO.597/DEL./2016 6 PROVISIONS AGAINST HIM/HER, HE/SHE IS REQUIRED TO B E SPECIFICALLY MADE AWARE OF THE CHARGES TO BE LEVELED AGAINST HIM /HER. 10. HONBLE HIGH COURT OF KARNATAKA IN CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) WHILE DECIDING THE IDENTICAL ISSUE HELD THAT WHEN THE AO HAS FAILE D TO ISSUE A SPECIFIC SHOW-CAUSE NOTICE TO THE ASSESSEE AS REQUI RED U/S 274 READ WITH SECTION 271(L)(C), PENALTY LEVIED IS NOT SUST AINABLE. THE OPERATIVE PART OF THE JUDGMENT IS REPRODUCED AS UND ER:- 59. AS THE PROVISION STANDS, THE PENALTY PROCEEDIN GS CAN BE INITIATED ON VARIOUS GROUND SET OUT THEREIN. IF THE ORDER PASSED BY THE AUTHORITY CATEGORICALLY RECORDS A FINDING REGAR DING THE EXISTENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN PENALTY PROCEEDINGS IS INITIATED, IN THE NOTICE TO BE ISSUED UNDER SECTION 274, THEY COULD CONVENIENTLY REFER TO THE S AID ORDER WHICH CONTAINS THE SATISFACTION OF THE AUTHORITY WHICH HA S PASSED THE ORDER. HOWEVER, IF THE EXISTENCE OF THE CONDITIONS COULD NOT BE DISCERNED FROM THE SAID ORDER AND IF IT IS A CASE O F RELYING ON DEEMING PROVISION CONTAINED IN EXPLANATION 1 OR IN EXPLANATION 1 (B), THEN THOUGH PENALTY PROCEEDINGS ARE IN THE N ATURE OF CIVIL LIABILITY, IN FACT, IT IS PENAL IN NATURE. IN EITHE R EVENT, THE PERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED IN SECTI ON 271 SHOULD BE MADE KNOWN ABOUT THE GROUNDS ON WHICH THE Y INTEND IMPOSING PENALTY ON HIM AS THE SECTION 274 MAKES IT CLEAR THAT ASSESSEE HAS A RIGHT TO CONTEST SUCH PROCEEDINGS AN D SHOULD HAVE FULL OPPORTUNITY TO MEET THE CASE OF THE DEPARTMENT AND SHOW THAT THE CONDITIONS STIPULATED IN SECTION 271 (1)( C) DO NOT EXIST AS SUCH HE IS NOT LIABLE TO PAY PENALTY. THE PRACTICE OF THE DEPARTMENT SENDING A PRINTED FORM WHERE ALL THE GRO UND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SA TISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASS ESSEE NOT REBUTTING THE INITIAL PRESUMPTION IS SERIOUS IN NAT URE AND HE HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILI TY. AS SAID PROVISIONS HAVE TO BE HELD TO BE STRICTLY CONSTRUED , NOTICE ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLES OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NOTICE IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASS ESSEE. ITA NO.597/DEL./2016 7 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, TH AT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. NO DOUBT, THE FACTS OF SOME CASES MAY ATTRACT BOTH THE OFFENCES AND IN SOME CASES THERE M AY BE OVERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES T HE INITIATION OF THE PENALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE O FFENCES. BUT DRAWING UP PENALTY PROCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSEE GUILTY OF ANOTHER OFFENCE OR FINDING HIM G UILTY FOR EITHER THE ONE OR THE OTHER CANNOT BE SUSTAINED IN LAW. IT IS NEEDLESS TO POINT OUT SATISFACTION OF THE EXISTENCE OF THE GROU NDS MENTIONED IN SECTION 271(1)(C) WHEN IT IS A SINE QUA NON FOR INITIATION OR PROCEEDINGS, THE PENALTY PROCEEDINGS SHOULD BE CONF INED ONLY TO THOSE GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECI FICALLY STATED SO THAT THE ASSESSEE WOULD HAVE THE OPPORTUNITY TO MEET THOSE GROUNDS. AFTER, HE PLACES HIS VERSION AND TRIES TO SUBSTANTIATE HIS CLAIM, IF AT ALL, PENALTY IS TO BE IMPOSED, IT SHOU LD BE IMPOSED ONLY ON THE GROUNDS ON WHICH HE IS CALLED UPON TO ANSWER . IT IS NOT OPEN TO THE AUTHORITY, AT THE TIME OF IMPOSING PENA LTY TO IMPOSE PENALTY ON THE GROUNDS OTHER THAN WHAT ASSESSEE WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENALTY PROCEEDINGS MAY BE VALID AND LEGAL, THE FINAL ORDER IMPOSING PE NALTY WOULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAINED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROU ND, THE PENALTY SHOULD ALSO BE IMPOSED ON THE SAME GROUND. WHERE THE BASIS OF THE INITIATION OF PENALTY PROCEEDINGS IS N OT IDENTICAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, THE IM POSITION OF PENALTY IS NOT VALID. THE VALIDITY OF THE ORDER OF PENALTY MUST BE DETERMINED WITH REFERENCE TO THE INFORMATION, FACTS AND MATERIALS IN THE HANDS OF THE AUTHORITY IMPOSING THE PENALTY AT THE TIME THE ORDER WAS PASSED AND FURTHER DISCOVERY OF FACTS SUB SEQUENT TO THE IMPOSITION OF PENALTY CANNOT VALIDATE THE ORDER OF PENALTY WHICH, WHEN PASSED, WAS NOT SUSTAINABLE. 61. THE ASSESSING OFFICER IS EMPOWERED UNDER THE AC T TO INITIATE PENALTY PROCEEDINGS ONCE HE IS SATISFIED I N THE COURSE OF ANY PROCEEDINGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF TOTAL INCOM E UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICULARS OF INCOME ARE DIFFERENT. THUS THE ASSESSING OFFICER WHILE ISS UING NOTICE HAS TO COME TO THE CONCLUSION THAT WHETHER IS IT A CASE OF CONCEALMENT OF INCOME OR IS IT A CASE OF FURNISHING OF INACCURA TE PARTICULARS. THE APEX COURT IN THE CASE OF T ASHOK POI V. CIT [2 007] 292 ITR 11 /161 TAXMAN 340 AT PAGE 19 HAS HELD THAT CON CEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THE GUJARAT HIGH COURT IN T HE CASE OF CIT V. MANU ENGG. [1980] 122 ITR 306 AND THE DELHI HIGH COURT IN THE CASE OF CIT V. VIRGO MARKETING (P) LTD . [2008] 171 TAXMAN 156, HAS HELD THAT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BE ING UNCLEAR PENALTY IS NOT SUSTAINABLE. THEREFORE, WHEN THE ASS ESSING OFFICER ITA NO.597/DEL./2016 8 PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT , THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. SIMILAR IS T HE CASE FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ST ANDARD PROFORMA WITHOUT STRIKING OF THE RELEVANT CLAUSES W ILL LEAD TO AN INFERENCE AS TO NON-APPLICATION OF MIND. 11. 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] 12. 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 :- 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 ITA NO.597/DEL./2016 9 271(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. 13. FOLLOWING THE DECISIONS RENDERED IN THE CASES O F CIT VS. MANJUNATHA COTTON AND GINNING FACTORY, CIT VS. SSA S EMERALA MEADOWS AND PR. CIT VS. SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT WHEN T HE NOTICE ISSUED BY THE AO IS BAD IN LAW BEING VAGUE A ND AMBIGUOUS HAVING NOT SPECIFIED UNDER WHICH LIMB OF SECTION 27 1(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS INITIATED U/S 271(1)(C) ARE NOT SUSTAINABLE. 14. SO, WE ARE OF THE CONSIDERED VIEW THAT THE PENA LTY LEVIED BY THE AO AND CONFIRMED BY THE LD. CIT (A) IS NOT SUSTAINA BLE IN THE EYES OF LAW, HENCE ORDERED TO BE DELETED. CONSEQUENTLY, TH E APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 13 TH DAY OF SEPTEMBER, 2019. SD/- SD/- (PRASHANT MAHARISHI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 13 TH DAY OF SEPTEMBER , 2019 TS ITA NO.597/DEL./2016 10 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-23, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.