Late Shri Jaswant Singh Madhok through L/H Shri Sandeep Singh Madhok, New Delhi V. ACIT, New Delhi

ITA 6469/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7384 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 19-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR
• Keywords: Invalid notice; Opportunity of being heard; Principle of natural justice; Question of law; Initiation of penalty proceedings; Reasonable cause; Deemed dividend; Set aside
• Section: 271(1)(c); 274; 139(1); 73; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER A ND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.6469/DEL./2016, A.Y. 2011-12 LATE SHRI JASWANT SINGH MADHOK VS. ACIT THROUGH L/H SH. SANDEEP SINGH CENTRAL CIRCLE-3, MADHOK NEW DELHI D-97, DEFENCE COLONY, NEW DELHI - 110024 (APPELLANT) (RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI SARAS KUMAR, SR. DR DATE OF HEARING : 20.01.2020 DATE OF ORDER :31 .01.2020 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT LATE SHRI JASWANT SINGH MADHOK TH ROUGH L/H SHRI SANDEEP SINGH MADHOK, NEW DELHI (HEREINAFT ER REFERRED TO AS 'THE ASSESSEE) BY FILING THE AFORESAID APPEA L, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 29/09/2016 PASSED BY LD. COMMISSIONER OF INCOME TAX(APPEALS)-25, NEW DELHI QUA THE ASSESSMENT YEAR 2011-12 ON THE GROUNDS INTER ALIA THAT : 1. THAT THE ID. CIT(A) HAS ERRED IN SUSTAINING THE PENALTY OF RS.4,21,344/- IMPOSED U/S 271(L)(C) ITA NO. 6469/D EL./2016 2 OF THE ACT WITHOUT APPRECIATING THE FACTS OF THE CASE AND DETAILED SUBMISSIONS MADE BY THE APPELLANT. 2. THAT THE ID. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACTS OF THE CASE BY HOLDING THAT THERE IS NO DOUBLE TAXATION. 3. THAT THE ID. CIT(A) HAS ERRED IN NOT ADJUDICATING GROUND NOS. 2 & 3 RAISED BEFORE HIM. 4. THAT THE ORDER IMPOSING PENALTY IS BAD IN LAW AND VOID AB INITIO SINCE IN THE SHOW CAUSE NOTICE ISSUED U/S 274 READ WITH SECTION 271 THE ID. AO HAS NOT STRUCK OFF THE IRRELEVANT CLAUSE OF THE NOTICE, MEANING THEREBY THE AO HAS NOT APPRISE THE ASSESSEE ABOUT THE SPECIFIC CHARGE, UNDER WHICH ASSESSEE HAS BEEN HELD GUILTY OF PENAL ACTION. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, DELETE, SUBSTITUTE ANY GROUND OF APPEAL ON OR BEFORE THE DATE OF HEARING. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF ASSESSME NT ORDER FRAMED U/S 153A/143(3) OF THE INCOME TAX ACT, 1961 (FOR SH ORT THE ACT) AT AN INCOME OF RS. 2,84,85,396/- BY WAY OF MAKING ADDITION OF RS. 14,43,784/- AND 1,50,00,000/- ON ACCOUNT OF DIS ALLOWANCE OF CREDIT CARD EXPENSES AND DEEMED DIVIDEND RESPECTIVE LY, INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. DECLINING THE CONTENTION RAISED BY THE ASSESSEE AO LEVIED THE PEN ALTY TO THE TUNE OF RS. 4,21,344/- @ 100% OF THE TAX SOUGHT TO BE E VADED. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS CONFIRMED THE PENALTY BY DISMIS SING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE ITA NO. 6469/D EL./2016 3 TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE S OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY ADDITION HAS BEEN MADE IN THIS CASE ON ACCOUNT OF DISALLOWANCE OF CREDIT CARD EXPENSES CLAIMED BY THE ASSESSEE AS WELL AS ON ACCOUNT OF FAILURE OF THE ASSESSEE TO EX PLAIN THE SOURCE OF ACQUISITION OF THE JEWELLERY. IT IS ALSO NOT IN DISPUTE THAT IDENTICALLY WORDED NOTICES U/S 274 READ WITH SECTIO N 271(1)(C) HAVE BEEN ISSUED TO INITIATE THE PENALTY PROCEEDING S TO THE ASSESSEE IN BOTH THE AFORESAID APPEALS ON THE SAME DATE I.E. 30.03.2014. 7. FROM THE PERUSAL OF THE ASSESSMENT ORDER IT IS E VIDENT THAT AT THE TIME OF INITIATING THE PENALTY PROCEEDINGS, THE ASSESSING OFFICER WAS NOT AWARE ENOUGH AS TO UNDER WHICH LIMB OF THE SECTION 271(1)(C) OF THE ACT I.E. AS TO WHETHER TH E ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHE D INACCURATE PARTICULARS OF INCOME, HE IS PROCEEDING. LIKEWISE THE ASSESSING OFFICER HAS ISSUED A CRYPTIC SHOW CAUSE NOTICE U/S 271(1)(C) / 274 OF THE ACT WHEREBY HE HAS FAILED TO SPECIFY AS TO W HETHER ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURN ISHED INACCURATE ITA NO. 6469/D EL./2016 4 PARTICULARS OF INCOME. 8. HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY-359ITR 565, C IT VS. SSAS EMERALD MEADOWS -73 TAXMANN.COM 241 (KAR.) (REVENUES SLP DISMISSED IN 242 TAXMAN 180) AND HON BLE HIGH COURT OF DELHI IN PR. CIT VS. SAHARA INDIA LIF E INSURANCE COMPANY LTD. IN ITA 475/2019 ORDER DATED 02.08.2019 DECIDED THE IDENTICAL ISSUE BY CONFIRMING THE DELETION OF P ENALTY MADE BY THE LOWER APPELLATE AUTHORITY ON ACCOUNT OF INVALID SATISFACTION AND INVALID NOTICE. 9. IN ORDER TO PROCEED FURTHER, WE WOULD LIKE TO P ERUSE THE IDENTICAL NOTICE ISSUED BY AO U/S 274 READ WITH SEC TION 271(1)(C) OF THE ACT IN BOTH THE AFORESAID APPEALS TO INITIAT E THE PENALTY PROCEEDINGS WHICH IS EXTRACTED AS UNDER FOR READY PERUSAL :- NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961. INCOME TAX OFFICE, NEW DELHI. DATED: 30.03.2014 TO, LATE SH. JASWANT SINGH MADHOK THROUGH L/H SH. SANDEEP SINGH MADHOK A-101, LAJPAT NAGAR, PART-I, NEW DELHI WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FO R THE ASSESSMENT YEAR 2011-12 IT APPEARS TO ME THAT YOU : - * HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH ME RETURN OF ITA NO. 6469/D EL./2016 5 INCOME WHICH YOU WERE REQUIRED TO FURNISH BY A NOTI CE GIVEN UNDER SECTION 22(L)/22(2)/34 OF THE INDIAN INCOME-T AX ACT, 1922 OR WHICH YOU WERE REQUIRED TO FURNISH UNDER SECTION 139(1) OR BY A NOTICE GIVEN UNDER SECTION 139(2)/148 OF THE INCO ME-TAX ACT, 1961, NO.. DT.. OR HAVE WITHOUT REASONABLE CA USE FAILED TO FURNISH IT WITHIN THE TIME ALLOWED AND TH E MANNER REQUIRED BY THE SAID SECTION 139(1) OR BY SUCH NOTI CE. * HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE UNDER SECTION 22(4)/23(2) OF THE INDIAN INCOME-TAX ACT, 1922 OR UNDER SECTION 142(1)/143(2) OF THE INCOME - TAX ACT , 1961. * HAVE CONCEALED THE PARTICULARS OF YOUR INCO ME OR . FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME ON 28 . 04.2014 AT 11 AM IN MY OFFICE AT ROOM NO. 332, E-2, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI- 110055 AND SHOW C AUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MA DE UNDER SECTION 271 OF THE INCOME - TAX ACT, 1961. IF YOU D O NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD I N PERSON OR THROUGH AUTHORIZED REPRESENTATIVE, YOU MAY SHOW CAU SE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CO NSIDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECTION 271. YOURS FAITHFULLY, SD/- (INDU BALA SAINI) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-13, NEW DELHI 10. BARE PERUSAL OF THE NOTICES ISSUED U/S 27 4 READ WITH SECTION 271(1)(C) OF THE ACT, EXTRACTED ABOVE, IN ORDER TO INITIATE THE PENALTY PROCEEDINGS AGAINST THE ASSESSEE GO TO PRO VE THAT THE AO HIMSELF WAS NOT AWARE / SURE AS TO WHETHER SHE/HE I S ISSUING NOTICE TO INITIATE THE PENALTY PROCEEDINGS EITHER FOR CON CEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF ITA NO. 6469/D EL./2016 6 SUCH INCOME BY THE ASSESSEE RATHER ISSUED VAGUE AN D AMBIGUOUS NOTICE BY INCORPORATING BOTH THE LIMBS OF SECTION 2 71(1)(C). WHEN THE CHARGE IS TO BE FRAMED AGAINST ANY PERSON SO AS TO MOVE THE PENAL PROVISIONS AGAINST HIM/HER, HE/SHE IS REQUIRE D TO BE SPECIFICALLY MADE AWARE OF THE CHARGES TO BE LEVELE D AGAINST HIM/HER. 11. 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 FAILED TO ISSUE A SPECIFIC SHOW-CAUSE NOTICE TO THE ASSESSEE AS REQUIRED U/S 274 READ WITH SECTION 271(L)(C), PENALTY LEVIED IS NOT SUSTAINABLE. THE OPERATIVE PART OF THE JUDGMENT IS REPRODUCED AS UNDER:- 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 ITA NO. 6469/D EL./2016 7 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 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 IN THE COU RSE OF ANY PROCEEDINGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF TOTAL INCOME UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICULARS OF I NCOME ARE DIFFERENT. THUS THE ASSESSING OFFICER WHILE ISSUING 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. ITA NO. 6469/D EL./2016 8 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. 11. HONBLE APEX COURT IN CASE OF CIT VS. SSAS EMERALD 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 :- ITA NO. 6469/D EL./2016 9 21. THE RESPONDENT HAD CHALLENGED THE UPHOLDING OF 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 IN SLP NO. 11485 OF2016 BY ORDER DATED 5TH AUGUST, 2016. 13. FOLLOWING THE DECISIONS RENDERED IN THE CASES OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY, CIT VS. SSA S EMERALD MEADOWS AND PR. CIT VS. SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPRA) , WE ARE OF THE CONSIDERED VIEW THAT WHEN THE NOTICES ISSUED BY THE AO ARE BAD IN LAW BEING VAGUE AND AMBIGUOUS HAVING NOT SPECIFIED UNDE R WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, AO HAS MOVED THE LAW INTO MOTION, THE PENALTY PROCEEDINGS INITIATED U/S 271(1)(C) ARE NOT SUSTAINABLE. 14. NOT ONLY THIS EVEN AT THE TIME OF INITIATING TH E PENALTY PROCEEDINGS THE ASSESSING OFFICER HAS NOT APPLIED H IS MIND AND AS SUCH WAS NOT AWARE ENOUGH AS TO WHETHER HE IS INITI ATING THE PENALTY PROCEEDINGS FOR CONCEALMENT OF PARTICULARS OF INCOM E OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME RATHER SOUGHT TO INITIATE ITA NO. 6469/D EL./2016 10 THE PENALTY AGAINST THE ASSESSEE IN A MECHANICAL MA NNER AS UNDER :- PENALTY PROCEEDINGS, U/S 271(1)(C) OF THE INCOME T AX ACT, 1961 ARE INITIATED SEPARATELY. 15. WE ARE OF THE CONSIDERED VIEW THAT WHEN AT THE TIME OF INITIATING PENALTY PROCEEDINGS ASSESSING OFFICER WA S NOT AWARE AS TO UNDER WHICH OF THE LIMB OF SECTION 271(1)(C) HE IS INTIATING THE PENALTY PROCEEDINGS SUBSEQUENT PROCEEDINGS U/S 271( 1)(C) ARE FUTILE EXERCISE MAKING LEVY OF PENALTY AND AS SUCH IS NOT SUSTAINABLE IN THE EYE OF LAW. 16. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, AO F AILED TO MAKE OUT THE CASE OF CONCEALMENT OF INCOME OR FURNI SHING INACCURATE PARTICULAR OF INCOME AS THE CASE MAY BE BY THE ASSESSEE SO AS TO ATTRACT THE PROVISIONS CONTAINED U/S 271(1 )(C) OF THE ACT, HENCE, THE PENALTY LEVIED BY THE AO AND CONFIRMED B Y THE LD. CIT(A) IS HEREBY ORDERED TO BE DELETED. 17. CONSEQUENTLY, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST JANUARY, 2020. SD/- SD/- (B.R.R.KUMAR) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER D ATED : 31/01/2020 *BR* COPY FORWARDED TO : 1. APPELLANT ITA NO. 6469/D EL./2016 11 2. RESPONDENT 3. CIT 4. CIT(A)-25, NEW DELHI 5. CIT(ITAT), NEW DELHI AR, ITAT NEW DELHI DATE OF DICTATION 20.01.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER