SHRI GOPAL SARAN GUPTA, JAIPUR V. INCOME TAX OFFICER, WARD, BEHROR

ITA 691/JPR/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4074 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 21-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK
• Keywords: Principle of natural justice; Initiation of penalty proceedings
• Section: 143(3); 27

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 691 & 692/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. SHRI GOPAL SARAN GUPTA, MAIN MARKET, MANOHARPUR, SHAHPURA, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD-BEHROR, BEHROR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABOPG 3955 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24.10.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 25/10/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST TWO SEPARATE ORDERS OF LD. CIT (A) DATED 12.03.2018 AND 27.04.2018 ARIS ING FROM ASSESSMENT ORDER PASSED UNDER SECTION 143(3) AND PENALTY ORDER PASSE D UNDER SECTION 271(1)(C) RESPECTIVELY FOR THE ASSESSMENT YEAR 2013-14. FIR ST, WE TAKE UP THE QUANTUM APPEAL IN ITA NO. 692/JP/2018 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN APPLYING N.P. RATE OF 5% ON UNRECOR DED SALES OF RS. 2,09,30,560/-, THEREBY SUSTAINING ADDITION OF R S. 10,46,258/- AS AGAINST APPLYING .P. RATE OF 2.43% DECLARED IN R EGULAR BOOKS OF ACCOUNTS. 2 ITA NOS. 691 & 692/JP/2018 SHRI GOPAL SARAN GUPTA, JAIPUR. 2. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 3. NECESSARY COST BE ALLOWED TO THE ASSESSEE. 2. THE ASSESSEE IS A PROPRIETOR OF M/S. GOPAL LAL V INOD KUMAR AND ENGAGED IN THE BUSINESS OF WHOLESALE DEALER IN KIRANA AND GRAI N ITEMS. THE ASSESSEE FILED HIS RETURN OF INCOME ON 25 TH SEPTEMBER, 2013 DECLARING TOTAL INCOME AT RS. 2,76 ,210/-. DURING THE SCRUTINY ASSESSMENT, THE AO NOTED THAT T HE ASSESSEE HAS DECLARED THE BANK ACCOUNTS WITH STATE BANK OF BIKANER & JAIPUR A ND ICICI BANK, HOWEVER, THE ASSESSEE WAS ALSO MAINTAINING A SAVINGS BANK ACCOUN T WITH INDUSIND BANK WHICH WAS NOT DISCLOSED BY THE ASSESSEE IN HIS REGULAR BO OKS OF ACCOUNT AND FURTHER THE ASSESSEE HAS DEPOSITED A SUM OF RS. 2,00,48,100/- I N CASH IN HIS SAVINGS BANK ACCOUNT HELD WITH INDUSIND BANK. THE SAID DEPOSIT MADE BY THE ASSESSEE IN THE SAVINGS BANK ACCOUNT WAS SUBSEQUENTLY ADMITTED BY T HE ASSESSEE AS UNRECORDED SALES AT RS. 2,09,30,560/- THOUGH THE ASSESSEE HAS OFFERED THE NET PROFIT OUT OF THE SAID SALES AT RS. 1,85,251/-. THE AO ISSUED A SHOW CAUSE NOTICE AND ASKED THE ASSESSEE AS TO WHY THE NET PROFIT RATE OF 5% ON UNR ECORDED TURNOVER SHOULD NOT BE APPLIED AND CONSEQUENTLY AN ADDITION OF RS. 10,46,5 28/- SHOULD NOT BE MADE. THE ASSESSEE OBJECTED TO THE ADDITION PROPOSED BY THE A O. HOWEVER, THE AO NOTED THAT FOR THE ASSESSMENT YEAR 2011-12, THE LD. CIT (A) HA S CONFIRMED THE ADDITION OF NET PROFIT ON TOTAL TURNOVER AT 5% AND BASED ON THE EAR LIER ORDER OF THE LD. CIT (A) WHICH WAS ACCEPTED BY THE ASSESSEE, THE AO MADE THE ADDIT ION OF RS. 10,46,258/-. THE ASSESSEE CHALLENGED THE ORDER OF THE AO BEFORE THE LD. CIT (A) BUT COULD NOT SUCCEED. 3 ITA NOS. 691 & 692/JP/2018 SHRI GOPAL SARAN GUPTA, JAIPUR. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT THE LD. CIT (A) HAS SUSTAINED THE ADDITION BY ADOPTING NET PROFIT AT 5% WITHOUT CONSIDERING THE DECLARED GP RATE BY THE ASSESSEE ON ACCOUNTED SALES OR EVEN THE PAST HISTORY OF GP DECLARED BY THE ASSESSEE. THE LD. A/R HAS POINTED OUT THAT FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS DECLARED GP ON THE ACCOUNTED SALES AT 2.43% WHEREAS FOR THE EARLIER ASSESSMENT YEAR THE GP WAS DECLARED AT 3.22 %, THEREFORE, THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LD. CIT (A) ADOPTING 5% NP IS WITHOUT BASIS. HE HAS PLEADED THAT THE AVERAGE GP DECLARED BY THE ASS ESSEE FOR THE YEAR UNDER CONSIDERATION AS WELL AS IN THE PRECEDING YEAR MAY BE CONSIDERED. 4. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THA T FOR THE ASSESSMENT YEAR 2011-12 THE AO MADE THE ADDITION BY ADOPTING 8% NP WHICH WAS RESTRICTED BY THE LD. CIT (A) TO 5% NP ON THE TOTAL SALES/TURNOVER. THE ASSESSEE HAS ACCEPTED THE ORDER OF THE LD. CIT (A) FOR THE ASSESSMENT YEAR 20 11-12 AND, THEREFORE, THE AO WAS REASONABLE IN ADOPTING THE SAME NP OF 5% ON THE UNA CCOUNTED SALES. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THERE WAS UNACCOU NTED SALES FOUND BY THE AO IN THE SHAPE OF DEPOSITS MADE IN THE SAVINGS BANK ACCO UNT WITH INDUSIND BANK NOT DISCLOSED IN THE REGULAR BOOKS OF ACCOUNT. THE AO HAS APPLIED NP AT 5% ON THE UNACCOUNTED SALES WHICH WAS CONFIRMED BY THE LD. CI T (A) IN PARA 5.3 AND 5.4 OF THE IMPUGNED ORDER AS UNDER :- 4 ITA NOS. 691 & 692/JP/2018 SHRI GOPAL SARAN GUPTA, JAIPUR. 5.3. I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT. FOLLOWING FACTS HAVE EMERGED : 1. THAT THE APPELLANT IS DEALING IN TRADE OF KIRANA & GRAIN ITEMS. 2. THAT THE APPELLANT HAS NOT DISCLOSED 2 BANK ACCOUNT S IN THE RETURN OF INCOME. 3. THAT THE APPELLANT HAS NOT SHOWN THE BUSINESS TRANS ACTION AMOUNTING TO RS. 2,09,30,560/-. 4. THAT THE A.O. HAS ESTIMATED THE NET PROFIT @ 5% ON THE UNRECORDED SALE THEREBY ADDING AN AMOUNT OF RS. 10,46,258/-. 5. THAT THE APPELLANT HAS SUBMITTED THAT THE GP BE TAK EN AT 4.21%. 5.4. I HAVE CONSIDERED THE ABOVE MENTIONED FACTS OF THE CASE. IN MY CONSIDERED VIEW THE A.O. HAS JUSTIFIABLY ESTIMAT ED THE NET PROFIT AT 5% AND THEREFORE THE ADDITION OF RS. 10,46,258/- IS SUSTAINED AND THE APPELLANTS GROUND OF APPEAL ON THE ISSUE IS DISMIS SED. THUS THE LD. CIT (A) HAS CONSIDERED THE NP AT 5% AS REASONABLE FOR ESTIMATING THE INCOME OF THE ASSESSEE ON THE UNACCOUNTED SALES WHI CH WAS APPLIED FOR THE ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS PLEADED BEFORE THE LD. CIT (A) THAT GP SHOULD BE TAKEN AT 4.21% AS AGAINST THE NP AT 5%. IT IS PERTINENT TO NOTE THAT THE TURNOVER IN QUESTION WAS UNACCOUNTED SALES OF THE A SSESSEE AND, THEREFORE, ALL OTHER EXPENDITURES WHICH ARE COMMON AND BELOW THE TRADING ACCOUNT ARE ALREADY BOOKED BY THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT AGAINS T THE ACCOUNTED SALES AND, 5 ITA NOS. 691 & 692/JP/2018 SHRI GOPAL SARAN GUPTA, JAIPUR. THEREFORE, FOR THE PURPOSE OF ESTIMATING THE INCOME ON THE UNACCOUNTED SALES THE GP WOULD BE THE INCOME FROM SUCH UNACCOUNTED SALES. W E FIND THAT EVEN IF WE APPLY THE AVERAGE OF GP FOR THE EARLIER YEAR INCLUDING TH E NP @ 5% FOR THE ASSESSMENT YEAR 2011-12, IT WILL BE AROUND 4.21%. THUS WE REST RICT THE ADDITION ON ACCOUNT OF ESTIMATED INCOME IN RESPECT OF UNACCOUNTED SALES BY TAKING THE NP AT 4.21%. THE AO IS DIRECTED TO RE-COMPUTE THE ADDITION BY CONSID ERING THE NP ON UNACCOUNTED SALES AT 4.21%. WE MAY CLARIFY THAT THE EARLIER OR DER FOR THE ASSESSMENT YEAR 2011- 12 IS NOT A DECISION BASED ON THE FACTS BUT IT WAS ONLY AN ESTIMATION OF INCOME BY THE A.O. AND, THEREFORE, IT WILL NOT OPERATE EITHER AS RES JUDICATA OR ESTOPPEL AGAINST THE ASSESSEE. APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 691/JP/2018 : 6. IN RESPECT OF THE PENALTY ORDER, THE ASSESSEE HA S RAISED THE FOLLOWING GROUNDS :- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED U/S 271(1)(C) IS ILLEGAL AND BAD IN LAW. 2. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF PENALTY OF RS. 2,25,700/- U/S 271(1)(C) OF THE IT ACT. 3. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 4. NECESSARY COST BE ALLOWED TO THE ASSESSEE. GROUND NO. 1 IS CHALLENGING THE VALIDITY OF THE ORD ER PASSED UNDER SECTION 271(1)(C) OF THE IT ACT. 6 ITA NOS. 691 & 692/JP/2018 SHRI GOPAL SARAN GUPTA, JAIPUR. 7. THE LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT T HE AO HAS INITIATED THE PENALTY PROCEEDINGS WITHOUT SPECIFYING THE LIMB WHE THER IT WAS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. THE LD. A/R HAS REFERRED TO THE ASSESSMENT ORDER WHEREIN THE AO HAS INITIATED THE PENALTY PROCEEDINGS WITHOUT SPECIFYING THE DEFAULT OF CONCE ALMENT OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. A/R HAS ALSO FILED A COPY OF SHOW CAUSE NOTICE DATED 8 TH MARCH, 2016 ISSUED UNDER SECTION 274 READ WITH SEC TION 271 OF THE IT ACT AND SUBMITTED THAT EVEN IN THE SHOW CAUSE NOTICE, THE A O HAS NOT SPECIFIED THE LIMB FOR WHICH THE PENALTY WAS PROPOSED TO BE LEVIED. THEREF ORE, THE INITIATION OF PENALTY PROCEEDINGS ARE NOT VALID AND CONSEQUENTLY ORDER PA SSED BY THE AO UNDER SECTION 271(1)(C) IS LIABLE TO BE QUASHED. IN SUPPORT OF HI S CONTENTION, HE HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF CI T VS. SSAS EMERALD MEADOWS, 242 TAXMAN 180 (SC) AND SUBMITTED THAT THE HONBLE SUPREME COURT HAS DISMISSED THE SLP FILED BY THE REVENUE AND THEREBY CONFIRMED THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KAR.). THE LD. A/R HAS ALSO RELIED UPON T HE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI CHANDMAL KUMAWAT VS. ITO IN ITA NO. 441/JP/2017 DATED 21.12.2017 AND SUBMITTED THAT WHE N THE AO HIMSELF WAS NOT SURE ABOUT THE DEFAULT COMMITTED BY THE ASSESSEE, T HEN THE INITIATION OF PROCEEDINGS UNDER SECTION 271(1)(C) ARE BAD IN LAW. 8. ON THE OTHER HAND, THE LD. D/R HAS RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT IT IS A CLEAR CASE OF CONC EALMENT OF PARTICULARS OF INCOME AS THE ASSESSEE HAS NOT DISCLOSED THE TURNOVER WHIC H WAS FOUND BY THE AO DURING 7 ITA NOS. 691 & 692/JP/2018 SHRI GOPAL SARAN GUPTA, JAIPUR. THE COURSE OF ASSESSMENT PROCEEDINGS. EVEN THE ASS ESSEE DID NOT DISCLOSE THE BANK ACCOUNT WHEREIN THE CASH DEPOSIT WAS FOUND TO BE DE POSITED BEING UNACCOUNTED TURNOVER. THEREFORE, WHEN THE ASSESSEE HAS NOT DIS PUTED THE FACT OF UNDISCLOSED INCOME BEING UNACCOUNTED TURNOVER, THEN THERE IS NO AMBIGUITY ABOUT THE LIMB FOR INITIATION OF THE PENALTY PROCEEDINGS BEING CONCEAL MENT OF PARTICULARS OF FACT. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THOUGH IT MAY BE A CASE OF UNACCOUNTED TUR NOVER FOUND BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HOWEVER, ONCE THE ADDITION WAS MADE BY THE AO BASED ON ESTIMATION OF INCOME ON SUCH UNACCOUNTE D TURNOVER THEN WHILE INITIATING THE PENALTY PROCEEDINGS UNDER SECTION 27 1(1)(C), THE AO IS DUTY BOUND TO SPECIFY THE CHARGE FOR WHICH THE PENALTY WAS PROPOS ED TO BE LEVIED. WE FIND THAT NEITHER IN THE ASSESSMENT ORDER NOR IN THE SHOW CAU SE NOTICE THE AO HAS SPECIFIED THE LIMB FOR WHICH THE PENALTY WAS PROPOSED TO BE L EVIED. HENCE IT IS A CLEAR CASE OF NON SPECIFICATION OF THE CHARGE AGAINST THE ASSESSE E WHILE INITIATING THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C). THE COORDINAT E BENCH OF THE TRIBUNAL IN THE CASE OF SHRI CHANDMAL KUMAWAT VS. ITO (SUPRA) WHILE DEALING WITH AN IDENTICAL ISSUE HAS HELD IN PARA 15 TO 18 AS UNDER :- 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. FIRSTLY, REGARDING THE PRELIM INARY PLEA OF THE LD AR THAT IN ABSENCE OF A SPECIFIC CHARGE AGAINST THE AS SESSEE IN THE PENALTY NOTICE, CONSEQUENT LEVY OF PENALTY BY THE AO IS ILL EGAL AND BAD IN LAW, WE REFER TO THE PENALTY NOTICE DATED 18.03.2013 WHI CH TALKS ABOUT ASSESSEE CONCEALING THE PARTICULARS OF INCOME OR FU RNISHING INACCURATE PARTICULARS OF INCOME. THE NOTICE DOESNT SPECIFY T HE EXACT CHARGE 8 ITA NOS. 691 & 692/JP/2018 SHRI GOPAL SARAN GUPTA, JAIPUR. AGAINST THE ASSESSEE AS TO WHETHER IT RELATES TO CO NCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. THE SUBSEQUENT NOTICE DATED 17.08.2015 IS AGAINST S ILENT ON THE EXACT CHARGE AGAINST THE ASSESSEE. IT IS A SETTLED POSIT ION IN LAW THAT THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) IS IN VITED WHEN THE CONDITIONS SPECIFIED THEREIN ARE SATISFIED AND FURT HER, THE TWO EXPRESSIONS CONCEALING THE PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME DENOTE DIFFERENT CONNOTATIONS. IT IS THEREFORE IMPERATIVE THAT THE ASSESSEE BE MADE AWAR E AS TO WHICH OF THE TWO CHARGES, HE IS REQUIRED TO SUBMIT HIS DEFEN CE AND SUPPORTIVE ARGUMENTS. IN THE INSTANT CASE, AS WE HAVE NOTED A BOVE, THE NOTICE TALKS ABOUT BOTH THE CHARGES AND IT DOESNT CONVEY TO THE ASSESSEE AS TO WHICH CHARGE HE HAS TO RESPOND. THE NOTICE THUS DEMONSTRATE NON- APPLICATION OF MIND ON THE PART OF THE AO. FURTHER , WE REFER TO THE ASSESSMENT ORDER WHERE, AFTER DISCUSSING THE ISSUE RELATING TO COMPUTATION OF CAPITAL GAINS, THE AO HELD THAT BY S HOWING LESS CAPITAL GAINS, THE ASSESSEE HAS FURNISHED INACCURATE PARTIC ULARS OF INCOME AND PENALTY PROCEEDINGS ARE BEING INITIATED SEPARATELY AND THEREAFTER, TOWARDS THE END OF THE ASSESSMENT ORDER, THE AO STA TES THAT PENALTY PROCEEDINGS U/S 271(1)(C) READ WITH SECTION 274 HAV E BEEN INITIATED SEPARATELY FOR CONCEALMENT OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF INCOME. THIS THUS SHOWS THAT THE AO HIMSELF IS UNSURE ABOUT THE CHARGE AGAINST THE ASSESSEE DURING THE CO URSE OF ASSESSMENT PROCEEDINGS. CONSIDERING THE OBSERVATIONS OF THE A O IN THE ASSESSMENT ORDER ALONGSIDE HIS ACTION OF NON-STRIKI NG OFF THE IRRELEVANT CLAUSE IN THE PENALTY NOTICE SHOWS THAT THE CHARGE BEING MADE AGAINST THE ASSESSEE QUA 271(1)(C) IS NOT FIRM, SHOWS NON-A PPLICATION OF MIND ON THE PART OF THE AO, AND THE VAGUENESS AND AMBIGU ITY IN THE NOTICE HAS THUS PREJUDICED THE RIGHT OF REASONABLE OPPORTU NITY TO THE ASSESSEE IN AS MUCH AS THE ASSESSEE IS NOT MADE AWARE AS TO WHICH OF THE TWO CHARGES, HE HAS TO SUBMIT HIS DEFENCE. 9 ITA NOS. 691 & 692/JP/2018 SHRI GOPAL SARAN GUPTA, JAIPUR. 16. HERE, WE REFER TO THE DECISION OF HONBLE SUPRE ME COURT IN CASE OF DILIP N SHROFF REPORTED IN 161 TAXMAN 218 WHERE IT WAS HELD AS UNDER: 83. IT IS OF SOME SIGNIFICANCE THAT IN THE STANDAR D PROFORMA USED BY THE ASSESSING OFFICER IN ISSUING A NOTICE D ESPITE THE FACT THAT THE SAME POSTULATES THAT INAPPROPRIATE WORDS A ND PARAGRAPHS WERE TO BE DELETED, BUT THE SAME HAD NOT BEEN DONE. THUS, THE ASSESSING OFFICER HIMSELF WAS NOT S URE AS TO WHETHER HE HAD PROCEEDED ON THE BASIS THAT THE ASSE SSEE HAD CONCEALED HIS INCOME OR HE HAD FURNISHED INACCURATE PARTICULARS. EVEN BEFORE US, THE LEARNED ADDITIONAL SOLICITOR GE NERAL WHILE PLACING THE ORDER OF ASSESSMENT LAID EMPHASIS THAT HE HAD DEALT WITH BOTH THE SITUATIONS. 84. THE IMPUGNED ORDER, THEREFORE, SUFFERS FROM NON -APPLICATION OF MIND. IT WAS ALSO BOUND TO COMPLY WITH THE PRINC IPLES OF NATURAL JUSTICE. [SEE MALABAR INDUSTRIAL CO. LTD. V . CIT [2000] 2 SCC 718]. 17. WE FIND THAT SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN CASE OF MANJUNATHA COTTON A ND GINNING FACTORY (SUPRA) WHICH HAS BEEN FOLLOWED IN CASE OF SSA EMERALD MEADOWS (SUPRA) AND THE SLP AGAINST THE LATTER DECI SION HAS SINCE BEEN DISMISSED BY THE HONBLE SUPREME COURT. FURTH ER, WE NOTE THAT THE HONBLE BOMBAY HIGH COURT IN CASE OF SHRI SAMSO N PERINCHERY (IN ITA NO. 1154 AND OTHERS DATED 5.01.2017) AND KARNATAKA HIGH COURT IN ITS LATEST DECISION IN CASE OF S. CHANDRASHEKHAR (SUPRA) HAS REAFFIRMED THE SAID LEGAL PROPOSITION. 18. IN LIGHT OF ABOVE LEGAL AUTHORITIES WHERE THE F ACTUM OF NON-STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE HAS BEEN HELD AS REFLECTIVE OF NON-APPLICATION OF MIND BY THE AO AND IN LIGHT OF F ACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ABOVE DIS CUSSIONS, THE PENALTY IMPOSED UNDER SECTION 271(1)(C) IS LIABLE T O BE DELETED. 10 ITA NOS. 691 & 692/JP/2018 SHRI GOPAL SARAN GUPTA, JAIPUR. ACCORDINGLY, HAVING REGARD TO THE FACTS AND CIRCUMS TANCES, WHEN THE AO HAS NOT SPECIFIED THE LIMB FOR INITIATION OF PENALTY PROCEE DINGS UNDER SECTION 271(1)(C), THE SAME IS BAD IN LAW AND ACCORDINGLY THE IMPUGNED ORD ER PASSED UNDER SECTION 271(1)(C) IS NOT SUSTAINABLE IN LAW AND LIABLE TO B E QUASHED. WE ORDER ACCORDINGLY. SINCE WE HAVE QUASHED THE PENALTY ORDER PASSED UNDE R SECTION 271(1)(C), THEREFORE, WE DO NOT PROPOSE TO GO INTO THE OTHER GROUNDS RAIS ED BY THE ASSESSEE ON THE MERITS ON LEVY OF PENALTY. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 692/JP/2018 IS PARTLY ALLOWED WHILE APPEAL IN ITA NO. 691/JP/2018 IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 25/10/ 2018. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 25/10/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI GOPAL SARAN GUPTA, JAIPUR. 2. THE RESPONDENT THE ITO WARD BEHROR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 691 & 692/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 11 ITA NOS. 691 & 692/JP/2018 SHRI GOPAL SARAN GUPTA, JAIPUR.