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

ITA 598/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9007 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• 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: 271(1)(c); 43B; 274; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.598/DEL./2016 (ASSESSMENT YEAR : 2007-08) ITA NO.599/DEL./2016 (ASSESSMENT YEAR : 2008-09) ITA NO.600/DEL./2016 (ASSESSMENT YEAR : 2009-10) M/S. SUDHIR TRANSFORMERS LTD., VS. ACIT, CC 4, 31, BOMMASANDRA INDUSTRIAL AREA, NEW DELHI. BANGALORE. (PAN : AAACI4556J) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KARAN KUMRA, CA REVENUE BY : SMT. NAINA SOIN KAPIL, SENIOR DR DATE OF HEARING : 03.09.2019 DATE OF ORDER : 24.09.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : SINCE COMMON QUESTIONS OF FACTS AND LAW HAVE BEEN R AISED IN THE AFORESAID APPEALS, THE SAME ARE BEING DISPOS ED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUSSIO N. 2. APPELLANT, M/S. SUDHIR TRANSFORMERS LTD. (HEREINAFT ER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL SOUGHT TO ITA NOS.598, 599 & 600/DEL./2016 2 SET ASIDE THE IMPUGNED ORDER DATED 20.01.2016, 201. 2016 & 01.12.2015 PASSED BY THE COMMISSIONER OF INCOME-T AX (APPEALS)-23, NEW DELHI AFFIRMING THE PENALTY ORDER DATED 23.03.2015, 23.03.2015 & 18.03.2014 PASSED U/S 271( 1)(C) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT), QUA THE ASSESSMENT YEARS 2007-08, 2008-09 & 2009-10 RESPECTIVELY ON TH E IDENTICAL GROUNDS EXCEPT THE DIFFERENCE IN AMOUNT INTER ALIA THAT :- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN UPHOL DING THE LEVY OF PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE I NCOME TAX ACT AMOUNTING TO RS.1,40,144/, RS.3,18,749/- & RS.1 ,41,000/- FOR AYS 2007-08, 2008-09 & 2009-10 RESPECTIVELY. 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 (A PPEALS) 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.4,16,350/- REPRESENTED THE DEDUCTION U/S 43B ON ACCOUNT OF FOL LOWING: AY 2007-08 BONUS PAYABLE - RS. 83,608/- DUTIES & TAXES - RS. 17,309/- ENTRY TAX PAYABLE - RS.3,12,143/- E.S.I. - RS. 3.290/- TOTAL - RS.4,16,350/- AY 2008-09 BONUS PAYABLE - RS.7,42,291/- (7,44,791/- - 2,500 ) ESI - RS. 87,842/- RATES & TAXES - RS. 1,300/- PF PAYABLE - RS.1,06,341/- TOTAL - RS.9,37,774/- ITA NOS.598, 599 & 600/DEL./2016 3 AY 2009-10 ESI - RS. 88,511.66 PROVIDENT FUND - RS. 68,842.32 SALES CST SILVASSA - RS.2,54,996.00 TOTAL - RS.4,12,349.98 DEDUCTION U/S 43B WERE DULY DISCLOSED BY THE APPELL ANT COMPANY, AND THERE COULD BE NO BASIS MUCH LESS VALID BASIS T O DISALLOW THE SAME AND FURTHER IMPOSITION OF PENALTY IN MISCONCEI VED AND UNSUSTAINABLE IN LAW AND SHOULD BE DELETED, AS SUCH . 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE ISSUE AT HAND ARE : ON THE BASIS OF COMPLETED ASSESSMENT FRA MED UNDER SECTION 143 (3) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) READ WITH SECTION 153C VIDE ORDER ALL DATED 26.12.2011 FOR AY S 2007-08, 2008- 09 & 2009-10, PENALTY PROCEEDINGS WERE INITIATED U/ S 271(1)(C) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS CONCEAL ED PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCO ME QUA THE ADDITION MADE ON ACCOUNT OF BONUS PAYABLE, ON ACCOU NT OF DUES & TAXES, ON ACCOUNT OF ENTRY TAX PAYABLE AND ON ACCOU NT OF ESI. DECLINING THE CONTENTIONS RAISED BY THE ASSESSEE, A O PROCEEDED TO LEVY THE PENALTY OF RS.1,40,350/-, RS.3,18,749/- & RS.1,41,000/- FOR AYS 2007-08, 2008-09 & 2009-10 RESPECTIVELY @ 1 00% OF THE TAX SOUGHT TO BE EVADED. 4. ASSESSEE CARRIED THE MATTER BY WAY OF APPEALS BE FORE THE LD. CIT (A) WHO HAS CONFIRMED THE PENALTIES BY DISMISSING T HE APPEALS. FEELING ITA NOS.598, 599 & 600/DEL./2016 4 AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIB UNAL BY WAY OF FILING THE PRESENT APPEALS. 5. 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. 6. UNDISPUTEDLY, ADDITIONS HAVE BEEN MADE IN THESE CASES ON ACCOUNT OF DISALLOWANCE OF DEDUCTIONS CLAIMED BY TH E ASSESSEE U/S 43B OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT THE ASS ESSEE HAS ACCEPTED THE ADDITIONS. IT IS ALSO NOT IN DISPUTE THAT THE ASSE SSEE HAD FILED AUDITED BALANCE SHEET DISCLOSING ALL THE DEDUCTIONS CLAIMED U/S 43B OF THE ACT. 7. 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 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? 8. 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 ITA NOS.598, 599 & 600/DEL./2016 5 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. 9. LD. DR FOR THE REVENUE IN ORDER TO REPEL THE ARG UMENTS ADDRESSED BY THE LD. AR FOR THE ASSESSEE RELIED UPON THE ORDE RS PASSED BY THE AO AND THE LD. CIT (A). 10. IN ORDER TO PROCEED FURTHER, WE WOULD LIKE TO PERUS E THE NOTICE DATED 26.12.2011 IN ALL THE CASES ISSUED BY AO U/S 274 READ WITH SECTION 271(1)(C) OF THE ACT TO INITIATE THE P ENALTY PROCEEDINGS WHICH IS EXTRACTED 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. 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 2007-08 IT APPEARS TO ME THAT YOU:- ITA NOS.598, 599 & 600/DEL./2016 6 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. 11. BARE PERUSAL OF THE NOTICE ISSUED U/S 274 READ WITH 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 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 HIGH COURT OF KARNATAKA IN CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) WHILE DECIDING ITA NOS.598, 599 & 600/DEL./2016 7 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. 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 ITA NOS.598, 599 & 600/DEL./2016 8 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 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. 13. HONBLE APEX COURT IN CASE OF CIT VS. SSAS EMERALA MEADOWS - (2016) 73 TAXMANN.COM 248 (SC) WHILE DISMISSING THE ITA NOS.598, 599 & 600/DEL./2016 9 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] 14. 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 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. ITA NOS.598, 599 & 600/DEL./2016 10 15. 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. 16. EVEN, ON MERITS, IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS DISCLOSED ALL THE DEDUCTIONS CLAIMED U/S 43B OF THE ACT WHICH LEADS TO THE CONCLUSION THAT THERE IS NO CONCEALMENT, NO MALAFID E OR FALSE REPRESENTATION AS THE CASE MAY BE ON THE PART OF TH E ASSESSEE IN CLAIMING DEDUCTIONS U/S 43B OF THE ACT AND AS SUCH, THE SAME CANNOT BE AMOUNTED TO CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHI NG OF INACCURATE PARTICULARS OF SUCH INCOME. MERELY BECAUSE OF THE FACT THAT THE DEDUCTIONS CLAIMED BY THE ASSESSEE HAVE BEEN DISALL OWED THE PROVISIONS CONTAINED U/S 271(1)(C) ARE NOT ATTRACTED. 17. HONBLE SUPREME COURT IN A CASE CITED AS RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) WHILE INTERPRETING THE PROVISIONS CONTAINED U/S 271(1)(C) OF THE ACT DECID ED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. OPERATIVE PART OF WHICH IS REPRODUCED FOR READY REFERENCE AS UNDER :- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, TH ERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. ITA NOS.598, 599 & 600/DEL./2016 11 SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRA CE THE DETAIL OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN T HE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE C ANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN OR DER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTL Y COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAM OUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY TH E ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULA RS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO AT TRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE , NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INAC CURATE PARTICULARS. 18. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT PENALTIES LEVIED BY THE AO AND CONFIRMED BY THE LD. CIT (A) IN THE AFORESAID APPEALS ARE DELETED, H ENCE ALL THE THREE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF SEPTEMBER, 2019. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 24 TH DAY OF SEPTEMBER , 2019 TS ITA NOS.598, 599 & 600/DEL./2016 12 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)- 23 , NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.