The DCIT Central-1, Indore V. Shri Ankit Mittal, Indore

ITA 741/Ind/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1422 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-11-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 04-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K G GOEL
• Assessee Lawyers: SHALINI MEHTA CAS
• Keywords: Business income; Search and seizure; Document seized; Principle of natural justice; Bonafide belief; Earning of tax free income; Question of law; Revised return; Documents seized; Set aside; Capital Gains
• Section: 271(1)(c); 143(3); 153A; 274; 251; 139(1); 73; 13; 153; 22; 132; 2; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.741/IND/2019 ASSESSMENT YEAR 2014-15 DCIT, CENTRAL-1, INDORE : REVENUE V/S SHRI ANKIT MITTAL, 15A/22, MANAK, Y.N. ROAD, INDORE PAN : AGCPM0468R : RESPONDENT REVENUE BY SHRI K.G. GOEL , SR.DR ASSESSEE BY SHRI AJAY TULSIYAN & MS. SHALINI MEHTA, CAS DATE OF HEARING 02.11 .2020 DATE OF PRONOUNCEMENT 13 .11.2020 O R D E R PER MANISH BORAD THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF THE REVENUE PERTAINING TO ASSESSMENT YEAR 2014-15 IS DIRECTED A GAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)- 3 (IN SHORT LD.CIT(A)], BHOPAL DATED 08.04.2019 WHICH IS ARIS ING OUT OF THE ANKIT MITTAL ITA NO.741/IND/2019 2 ORDER U/S 271(1)(C) OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 30.05.2018 FRAMED BY JCIT- OSD CENTRAL CIRCLE -1, INDORE. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL; 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE PENALTY OF RS.1,01,17,700/- LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 ON ACCOUN T OF CONCEALMENT OF INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN NOT GOING IN TO THE MERITS OF THE CASE THAT THE PEN ALTY WAS LEVIED ON SUCH INCOME WHICH WAS DISCLOSED BY ASSESSEE ONLY ON THE BASIS OF SEIZED MATERIAL AND SHOWN IN RETURN FILED IN RESPONSE TO N OTICE U/S 153A OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE REC ORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL HAVING MAIN SOURCE OF INCOME AS SALARY, REMUNERATION FROM M/S MITTAL APPLIANCES LTD AND SHARE OF PROFIT FROM PARTNERSHIP FIRM M/S PALASH & CO BESIDE S OTHER INCOME OF INTEREST AND DIVIDEND ON INVESTMENTS. THE ASSESS EE FILED RETURN OF INCOME U/S 139(1) FOR A.Y. 2014-15 ON 23.03.2015 DE CLARING TOTAL INCOME OF RS.64,72,500/-. A SEARCH AND SEIZURE OPER ATION U/S 132 OF THE ACT WERE CARRIED OUT ON THE BUSINESS AS WELL AS RESIDENTIAL PREMISES OF THE MITTAL GROUP INCLUDING THE ASSESSEE ALONG WITH OTHER CONCERNS/BUSINESS ASSOCIATES ON 04.09.2015. IN RES PONSE TO NOTICE U/S 153A OF THE ACT THE ASSESSEE HAS FILED RETURN F OR A.Y. 2014-15 ON 08.06.2016 DECLARING TOTAL INCOME OF RS.3,62,34, 200/- INCLUDING ANKIT MITTAL ITA NO.741/IND/2019 3 ADDITIONAL INCOME OFFERED U/S 132(4) OF RS.2,97,66, 605/-. THE ADDITIONAL INCOME OF RS.2,97,66,605/- WAS PREVIOUSL Y CLAIMED AS EXEMPT INCOME U/S 10(38) OF THE ACT IN THE ORIGINAL RETURN OF INCOME FILED ON 23.03.2015. DURING THE COURSE OF S EARCH ASSESSEE ACCEPTED TO OFFER INCOME OF RS.2,97,66,605 /- TO TAX AS BUSINESS INCOME AND ITS DISCLOSURE IN THE RETURN FI LED IN PURSUANCE TO NOTICE U/S 153A OF THE ACT WAS ACCEPTE D. HOWEVER, LD. A.O WAS OF THE VIEW THAT ASSESSEE WOULD HAVE NO T OFFERED THE INCOME OF RS.2,97,66,605/- TO TAX IF HE HAS NOT BEE N SUBJECTED TO SEARCH AND THUS HELD THE ASSESSEE TO HAVE CONCEALED HIS TOTAL INCOME AND INITIATED THE PROCEEDINGS U/S 271(1)(C) OF THE ACT. SUBSEQUENTLY THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE CARRIED OUT. ASSESSEE SUBMITTED DURING THE PR OCEEDINGS THAT HE SHOULD NOT BE HELD LIABLE TO PAY ANY PENALT Y SINCE THE PARTICULARS OF INCOME WERE DULY REFLECTED IN THE OR IGINAL RETURN OF INCOME AND HE HAS SUO MOTO OFFERED AMOUNT TO TAX IN THE SEARCH PROCEEDINGS. BUT LD. A.O CAME TO THE CONCLUSION THA T THE ASSESSEES CASE FALLS WITHIN THE AMBIT OF EXPLANATI ON 5A OF SECTION 271(C) OF THE ACT AND THUS LIABLE TO P AY THE PENALTY FOR ANKIT MITTAL ITA NO.741/IND/2019 4 CONCEALMENT OF INCOME AND ACCORDINGLY LEVIED PENALT Y OF RS.1,01,17,700/- U/S 271(1)(C) OF THE ACT. 4. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CI T(A) AND SUCCEEDED. LD. CIT(A) FIRSTLY ALLOWED THE LEGAL GRO UND IN FAVOUR OF THE ASSESSEE RELYING ON THE JUDGEMENT OF HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE OF PCIT V/S KULWANT SINGH BHATIA DATED 09.05.2018 (ITA NO.9 TO 14 OF 2018) AND HELD THAT T HE PENALTY NOTICE ISSUED U/S 274 OF THE ACT WAS NOT LEGALLY SU STAINABLE SINCE SPECIFIC CHARGE WAS NOT LEVELLED AGAINST THE ASSESS EE. ON MERITS ALSO LD. CIT(A) RELIED ON THE JUDGMENT OF HONBLE SUPREM E COURT IN THE CASE OF CIT V/S SURESH CHANDRA MITTAL (2001) 251 ITR9 WHEREIN THE HONBLE APEX COURT UPHELD THE JUDGMENT OF HONBLE M .P. HIGH COURT HOLDING THAT WHERE AN ASSESSEE FILED REVISED RETURN SHOWING HIGHER INCOME AFTER SEARCH TO PURCHASE PEACE AND AV OID LITIGATION AND DEPARTMENT SIMPLY RESTED ITS CONCLUSION ON THE ACT OF VOLUNTARILY SURRENDER DONE BY THE ASSESSEE IN GOOD FAITH NO PEN ALTY COULD BE LEVIED. 5. AGGRIEVED REVENUE IS IN APPEAL BEFORE THE TRIBUNAL CHALLENGING THE FINDING OF LD. CIT(A) DECIDING IN FAVOUR OF THE ASSESSEE ON LEGAL ANKIT MITTAL ITA NO.741/IND/2019 5 GROUND AS WELL AS ON MERITS OF THE CASE. 6. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDER OF LD. A.O. LD. DEPARTMENTAL REPRESENTATIVE FURTHER REFERRED TO THE FOLLOWING JUDGMENTS IN SUPP ORT OF THE CONTENTION THAT MERE NON STRIKING OFF ONE OF THE LI MB PROVIDED U/S 271(1)(C) OF THE ACT WILL NOT BE MAKE THE PENALTY PROCEEDINGS INFRUCTUOUS AND BAD IN LAW:- (I) JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE O F VENTURA TEXTILES LTD V/S CIT ITA NO.958 OF 2017 DAT ED 12.6.2020. (II) JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE O F M/S SUNDARAM FINANCE LIMITED V/S ACIT T.C. (APPEAL) NO.S. 876 AND 877 OF 2008 ORDER DATED 23.04.2018. 7. AS REGARDS MERITS OF THE CASE LD. DEPARTMENTAL R EPRESENTATIVE REFERRED TO THE JUDGMENT OF HONBLE CALCUTTA HIGH C OURT IN THE CASE OF CIT V/S PRASSNNA DUGAR (2015) 371 ITR 0019 WHEREIN THE HONBLE HIGH COURT CONFIRMED THE LEVY OF PENALTY U/ S 271(1)(C) OF THE ACT WHICH WAS LEVIED ON THE INCOME VOLUNTARILY OFFERED BY THE ASSESSEE DURING THE COURSE OF SEARCH EVEN THOUGH NO INCRIMINATING ANKIT MITTAL ITA NO.741/IND/2019 6 DOCUMENT SUGGESTED SUCH UNDISCLOSED INCOME. 8. PER CONTRA LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE FOLLOWING WRITTEN SUBMISSIONS:- THE VERY INITIATION OF THE IMPUGNED PENALTY PROCEED ING BY ISSUING A VAGUE AND WRONG NOTICE U/S 274 IS BAD IN LAW 1. A BLANKET AND CYCLOSTYLED PENALTY NOTICE WAS ISSUED U/S 274 R.W.S. 271(1)(C) ON 30.11.2017 TO THE RESPONDENT, COPY OF WHICH IS ENCLOSED AT PAGE 23 OF THE PB, A PERUSAL OF THE SAME WILL SHOW THAT TH E SAME WAS ISSUED IN A MECHANICAL MANNER MENTIONING BOTH THE L IMBS I.E. CONCEALMENT OF PARTICULARS OF INCOME OR OF FURNI SHING INACCURATE PARTICULARS OF INCOME. 2. IT IS SUBMITTED THAT THE NOTICE U/S 274 R.W.S. 271( 1)(C) DATED 30.11.2017 WAS VAGUE AS THE SAME WAS ISSUED WITHOUT DRAWING REQUISITE SATISFACTION AND WITHOUT MENTIONING THE SPECIFIC CH ARGE AGAINST THE RESPONDENT, AS BOTH THE LIMBS, CONCEALMENT OF INCOM E AND FURNISHING OF INACCURATE PARTICULARS WERE MENTIONED. THUS THE PEN ALTY NOTICE WAS ISSUED IN A MECHANICAL MANNER WITHOUT SPECIFYING TH E SPECIFIC CHARGE AS TO WHETHER THE RESPONDENT IS FOUND GUILTY OF CONCEA LING THE PARTICULARS OF THE INCOME OR HAVE FURNISHED INACCURATE PARTICULARS OF INCOME. THUS THE VERY INITIATION OF THE PRESENT PENALTY PROCEEDING I S NOT IN ACCORDANCE WITH THE LAW AND HAVE LEAD TO VITIATION OF ENTIRE PENALT Y PROCEEDINGS. 3. THAT AS PER PROVISIONS OF SECTION 271(1)(C )OF THE ACT, THERE ARE TWO DIFFERENT CHARGES I.E. THE CONCEALMENT OF PARTICULA RS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE PENALTY CAN BE IMPOSED FOR A SPECIFIC CHARGE. IT IS A SETTLED PROP OSITION THAT BOTH THESE LIMBS I.E. CONCEALMENT OF PARTICULARS OF INCOME OR OF FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT C ONNOTATIONS AS HELD BY THE HONOURABLE SUPREME COURT IN THE CASE OF T ASHOK PAI V/S CIT (2007) 292 ITR 11 (SC). 4. IT IS EQUALLY SETTLED PROPOSITION THAT SATISFACTION OF THE CONCERNED TAX AUTHORITY TO THE EFFECT THAT THE RESPONDENT HAS EITHER CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF INCOME IS THE CONDITION PRECEDENT FOR INITIATION OF PENALTY. THAT THE NOTICE ISSUED U/S ANKIT MITTAL ITA NO.741/IND/2019 7 274 R.W.S. 271(1)(C) IS BAD IN LAW AS IT DOES NOT M ENTION A SPECIFIC LIMB OF SECTION 271(1)(C) OF THE ACT UNDER WHICH IT HAS BEE N INITIATED. THEREFORE, IT IS SUBMITTED THAT THE VERY INITIATION OF THE PEN ALTY PROCEEDINGS ITSELF IS VAGUE AND BAD IN LAW AND SO ALSO THE CONSEQUENT PEN ALTY ORDER. 5. THE RESPONDENT WISH TO DRAW SUPPORT FROM THE VARIOU S DECISIONS WHEREIN THE PENALTY PROCEEDINGS HAVE BEEN HELD TO B E NOT VALIDLY INITIATED AS THE SHOW CAUSE NOTICE ISSUED U/S 274 WAS DEFECTI VE AS IT DID NOT SPELLED OUT THE GROUND / CHARGE ON WHICH THE PENALT Y IS SOUGHT TO BE IMPOSED. THE RESPONDENT PLACES RELIANCE ON THE FOLL OWING PROPOSITIONS: A. THE HONOURABLE KARNATAKA HIGH COURT IN CIT V/S SSAS EMERALD MEADOWS ITA NO. 380/2015 DATED 23.11.2015. B. THE HONOURABLE SUPREME COURT HAS DISMISSED THE SPEC IAL LEAVE PETITION FILED BY THE DEPARTMENT AGAINST THE ABOVE DECISION OF HONOURABLE KARNATAKA HIGH COURT IN CIT V/S SSAS EMERALD MEADOWS, (2016) 73 TAXMANN.COM 248 (SC). C. CIT V/S MANJUNATH COTTON GINNING FACTORY (2013) 359 ITR 0565 (KARNATAKA). D. PR. CIT V/S KULWANT SINGH BHATIA (2018) 304 CTR 010 3 THE RESPONDENT WISH TO ADD THAT IN THE CASE OF KULWANT SINGH BHATIA (SUPRA), THE HONOURABLE HIGH COURT OF MADHYA PRADESH IN ITS LATEST DECISION DATED 09.05.2018 DISMISSING THE APPEALS FI LED BY THE REVENUE HELD IN PARA 11 OF THE ORDER ON DUE CONSIDERATION OF THE ARGUMENTS OF THE LEARNE D COUNSEL OF THE RESPONDENT, SO ALSO CONSIDERING THE FACT THAT T HE GROUND MENTIONED IN SHOW CAUSE NOTICE WOULD NOT SATISFY TH E REQUIREMENT OF LAW, AS NOTICE WAS NOT SPECIFIC, WE ARE OF THE VIEW THAT THE LEARNED TRIBUNAL HAS RIGHTLY RELYING ON THE DECISION OF CIT V/S MANJUNATH COTTON GINNING FACTORY (SUPRA) AND CIT V/S SSAS EM ERALDS MEADOWS (SUPRA) RIGHTLY ALLOWED THE APPEAL OF THE A SSESSEE AND SET ASIDE THE ORDER OF PENALTY IMPOSED BY THE AUTHORITI ES. IT IS SUBMITTED THAT THE ABOVE DECISION OF THE JURI SDICTIONAL HIGH COURT SQUARELY APPLIES IN THE INSTANT CASE AS THE MATTER BEFORE THE HONOURABLE HIGH COURT WAS ALSO IDENTICAL IN SO FAR AS: ANKIT MITTAL ITA NO.741/IND/2019 8 (I) PENALTIES WERE LEVIED U/S 271(1)(C) ON THE BASIS OF SHOW CAUSE NOTICE ISSUED WITHOUT STRIKING OF EITHER OF TWO CHA RGES I.E. CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS AS HAS ALSO BEEN DONE IN THE PRESENT CASE BEFORE YOUR HONOUR. (II) FURTHER IN THE MATTER BEFORE THE HONOURABLE HIGH CO URT PENALTY PROCEEDINGS WERE INITIATED SINCE THE ASSESSEE HAD D ECLARED UNDISCLOSED INCOME ONLY AFTER THE DATE OF SEARCH, WHICH FACT IS ALSO IDENTICAL WITH THE FACTS OF THIS APPEAL. (III) IN THE APPEAL BEFORE THE HONOURABLE HIGH COURT, IT APPEARS THAT PENALTIES WERE LEVIED BY INVOKING EXPLANATION 5A OF SECTION 271(1)(C) (AS MENTIONED IN PARA 10 OF THE ORDER OF THE HONOURABLE HIGH COURT) AND IN THE INSTANT CASE ALSO THE LEARNED AO HAS INVOKED EX PLANATION 5A TO SECTION 271(1)(C) FOR LEVYING THE PENALTY. THUS THE CASE OF THE RESPONDENT IS SQUARELY COVERED BY THE PROPOSITION RENDERED BY THE JURISDICTIONAL HIGH COURT, WHICH HA S A BINDING PRECEDENCE, SINCE IN THE INSTANT CASE ALSO THE GROU NDS / CHARGES MENTIONED IN THE SHOW CAUSE NOTICE DO NOT SATISFY T HE REQUIREMENT OF LAW AND THE SHOW CAUSE NOTICE WAS NOT SPECIFIC. THE LD. CIT(A) HAS RIGHTLY DELETED THE PENALTY LEVI ED BY LD. AO BY RELYING ON THE ABOVE DECISION OF HONBLE M.P. HIGH COURT A ND ALSO OBSERVED THAT THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THE CASE BEFORE THE HONOURABLE M.P. HIGH COURT. E. SMT. SHRUTI GARG V/S DCIT CENTRAL INDORE IN ITA NO. 988/IND/2016 DATED 28.06.2017 F. SHRI BANSIDHAR SOMANI V/S DCIT CENTRAL 1 INDORE ITA NO. 619 TO 624/IND/2017 FOR AY 2008-09 TO AY 2013-14 ORDER D ATED 17.12.2018 G. THERE ARE VARIOUS OTHER SIMILAR DECISIONS OF DI FFERENT HIGH COURTS AND ALSO ITAT, SOME OF WHICH ARE AS UNDER:- A. THE HONOURABLE ANDHRA HIGH COURT IN THE CASE OF PRINCIPAL CIT V/S SMT. BAISETTY REVATHI OF DATED 13.07.2017 ITTA NO. 684 OF 2016 ANKIT MITTAL ITA NO.741/IND/2019 9 B. THE HONOURABLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S SHRI SAMSON PERINCHERY 1154 OF 2014 DATED 05.01.2017 C. THE HONOURABLE KARNATAKA HIGH COURT IN THE CASE OF S. CHANDRASHEKAR, 396 ITR 538 (KARN.) D. HONOURABLE DELHI TRIBUNAL IN CASE OF OM LOGISTI CS LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX. NO CONCEALMENT, ONLY MERE CHANGE IN THE HEAD OF INC OME IN THE RETURN FILED UNDER SECTION 153A 6.THE DEPARTMENT HAS RAISED THE GROUND THAT THE LD. CIT(A) ERRED IN NOT GOING IN TO THE MERITS OF THE CASE THAT THE PENALTY WAS LEVIED ON SUCH INCOME WHICH WAS DISCLOSED BY ASSESSEE ONLY ON THE BASIS OF SEIZED MATERIAL AND SHOWN IN THE RETURN FILED UNDER SECTIO N 153A. HOWEVER THE FACT IS THAT THE RESPONDENT HAS DISCLOSED THE SALE OF SHARES OF UNNO INDUSTRIES LTD. AND CLAIMED THE RESULTANT LONG TER M CAPITAL GAIN EARNED AS EXEMPT U/S 10(38) IN THE RETURN OF INCOME FILED U/S 139 FOR THE YEAR UNDER CONSIDERATION ON 23.03.2015. COPY OF THE COMP UTATION OF INCOME OF THE RETURN FILED U/S 139(1) IS ENCLOSED AT PAGE 01 TO 07 OF PB, WHEREIN THE TRANSACTION OF SALE OF SHARES OF UNNO INDUSTRIE S IS DISCLOSED ON PAGE 03 AND PAGE 07 . IN THE RETURN OF INCOME FILED U/S 153A R.W.S.139 ON 07.01.2017 THE LONG TERM CAPITAL GAIN EARNED FROM T HE SALE OF SHARES OF UNNO INDUSTRIES LTD. WAS OFFERED AS BUSINESS INCOME . 7. ALSO, THE LEARNED AO IN THE PARA 6 OF THE PENALT Y ORDER HAS STATED THAT THE SUBMISSIONS OF THE ASSESSEE ARE NOT ACC EPTABLE AS THE ASSESSEE HAS DISCLOSED THE ADDITIONAL INCOME ONLY AS A RESULT OF SEARCH AND SEIZURE OPERATION. IT IS SUBMITTED TH AT THE TRANSACTIONS WERE ALREADY DISCLOSED IN THE RETURN FILED U/S 13 9 AND THERE WAS A MERE CHANGE OF HEAD FROM INCOME FROM CAPITAL GAIN TO INCOME FROM BUSINESS & PROFESSION. ANKIT MITTAL ITA NO.741/IND/2019 10 8. IT IS SUBMITTED THAT THE WORD CONCEALMENT MEAN S WHEN THE ASSESSEE HAS CONCEALED THE INCOME AND HAS NOT SHOWN THE INCO ME IN ITS RETURN OR IN ITS BOOKS OF ACCOUNTS. IN THE PRESENT CASE, THE RESPONDENT HAS MADE THE COMPLETE DISCLOSURE OF INCOME IN THE BOOKS OF A CCOUNTS AND ALSO IN THE RETURN OF INCOME U/S 139(1) AND MERE CHANGE IN HEAD OF THE INCOME DURING SEARCH WOULD NOT AMOUNT TO CONCEALMENT OF IN COME. THEREFORE, THE IMPOSITION OF PENALTY WOULD NOT JUSTIFY UNDER S ECTION 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME. 9.THAT THE RESPONDENT PLACES RELIANCE ON THE FOLLOW ING JUDICIAL PRECEDENTS WHICH SUPPORT THE CONTENTION OF THE RESP ONDENT WHICH READ AS UNDER: I. HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSION ER OF INCOME-TAX V. HIRALAL DOSHI [2017] 79 TAXMANN.COM 3 71 II. HIGH COURT OF BOMBAY IN CASE OF COMMISSIONER OF INC OME TAX VS. BENNETT COLEMAN & CO. LTD (2013) 259 CTR 0383 III. FURTHER, THE RESPONDENT PLACES RELIANCE ON THE DECI SION OF HONBLE ITAT, DELHI IN THE CASE OF DEPUTY COMMISSIONER OF I NCOME-TAX V. JMD ADVISORS (P.) LTD. [2010] 124 ITD 223 IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT MERE CHA NGE IN HEAD OF INCOME WOULD NOT WARRANT PENALTY IN THE PRESENT CASE AND T HE GROUND RAISED BY THE DEPARTMENT ON THIS GROUND IS NOT SUSTAINABLE. 10.IT IS FURTHER SUBMITTED THAT THE INCOME SURRENDE RED IN THE STATEMENTS RECORDED U/S 132 WAS ALSO OFFERED FOR THE PURPOSE O F TAXATION IN THE RETURN FILED U/S 153A. THE INCOME OFFERED BY THE RE SPONDENT WAS ACCEPTED AS IT IS WITHOUT ANY VARIATION AND WITHOUT ANY OBJECTION IN THE ASSESSMENT PROCEEDINGS. A MINISCULE ADDITION OF RS. 27,100/- WAS MADE U/S 57(III) WHICH HAS NOTHING TO DO WITH THE ADDITI ONAL INCOME OFFERED BY THE RESPONDENT. PENALTY PROCEEDINGS WERE INITIATED ON THE AMOUNT OF THE ANKIT MITTAL ITA NO.741/IND/2019 11 ADDITIONAL INCOME DISCLOSED DURING THE COURSE OF SE ARCH & SEIZURE PROCEEDINGS. 11. IT IS SUBMITTED THAT ONCE THE INCOME OFFERED IN THE RETURN FILED U/S 153A HAS BEEN ACCEPTED BY THE LEARNED AO, THE RETUR N THAT HAS TO BE TAKEN INTO CONSIDERATION FOR THE IMPOSITION OF PENA LTY U/S 271(1)(C) IS THE ONE FILED U/S 153A AND THE RETURN FILED U/S 139 STANDS ABATED AND BECOMES NON-EST. FURTHER IF FOR THE SAKE OF ARGUMEN T IT IS ASSUMED THAT THE INTENT OF THE LAW WAS TO TAKE THE RETURN FILED U/S 139 INTO CONSIDERATION FOR THE PURPOSE OF MAKING ASSESSMENT AND LEVYING THE PENALTY THAN CLAUSE (A) SECTION 153A(1) FOR FILING OF THE FRESH RETURN U/S 153A WOULD NEVER HAVE EXISTED. THE LANGUAGE OF THE SECTION 153A IN ITSELF CORROBORATE THAT CLAUSE (A) OF SECTION 153A( 1) PROVIDING AN OPPORTUNITY TO FILE A RETURN U/S 153A IS IN THE NAT URE OF SECOND CHANCE GIVEN TO THE ASSESSEE TO MAKE GOOD ANY OMISSION IN THE ORIGINAL RETURN. THE SAID RETURN HAVING BEEN ACCEPTED SO ALSO THE IN COME OFFERED, WITHOUT ANY OBJECTION AND WITHOUT ANY ADVERSE COMME NT, OUGHT NOT TO HAVE ATTRACTED PENAL CONSEQUENCES. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE PENALTY BY RELYING ON THE DECISION OF H ONBLE SUPREME COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (2001) 251 ITR 9 AND HELD THAT AO IS NOT JUSTIFIED IN IMPOSING THE PENALTY ON THE RETUNED INCOME. ALSO, THE PRESENT CASE IS ON A MUCH BETTER FOOTING AS THE RESPONDENT HAS MADE THE COMPLETE DISCLOSURE OF INCOME IN THE BOOKS OF ACCOUNTS AND ALSO IN THE RETURN OF INCOME U/S 139(1) AND MERE CH ANGE IN THE HEAD OF INCOME WOULD NOT WARRANT TO CONCEALMENT OF INCOME T HEREFORE THE GROUND RAISED BY THE DEPARTMENT MAY PLEASE BE DISMI SSED. EXPLANATION 5A TO SECTION 271(1)(C ) IS NOT APPLICA BLE: THE LD. AO REFERRED EXPLANATION 5A OF SECTION 271(1 )(C ) IN PARA 8 OF PENALTY ORDER AND OBSERVED AS UNDER: ANKIT MITTAL ITA NO.741/IND/2019 12 THE EXPLANATION 5A REFERRED ABOVE, CLEARLY STATES THAT WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS BEEN F URNISHED BEFORE THE DATE OF SEARCH BUT SUCH INCOME HAS NOT BEEN DE CLARED THEREIN SHE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PEN ALTY UNDER CLAUSE (C) OF SUB SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HER INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 13. IT IS SUBMITTED THAT EXPLANATION 5A IS APPLICA BLE WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS BEEN FURNISHED B EFORE THE DATE OF EARCH BUT SUCH INCOME HAS NOT BEEN DECLARED THERE IN. IN THE PRESENT CASE, THE RESPONDENT HAS DECLARED THE SALE OF SHAR ES OF UNNO INDUSTRIES LTD. UNDER THE HEAD INCOME FROM CAPITAL GAINS I N THE RETURN OF INCOME FILED UNDER SECTION 139(1) AND IT IS NOT A CASE OF NON DISCLOSURE OF INCOME. THE RESPONDENT NOT ONLY RECORDED THE SAID INCOME AND THE RELATED TRANSACTIONS OF SHARES IN THE BOOKS OF THE ACCOUNTS BUT WAS CATEGORICALLY DISCLOSED IN THE RETURN OF INCOME FI LED BEFORE THE DATE OF SEARCH. MERE CHANGE IN HEAD OF INCOME WOULD NOT TA NTAMOUNT AS CONCEALMENT OF INCOME TRIGGERING EXPLANATION 5A OF SECTION 271(1)(C). THEREFORE, THE LD. AO ERRED IN LEVYING THE PENALTY WITHOUT APPRECIATING THE FACTS OF THE CASE AND IMPOSED THE PENALTY IN A MECHANICAL MANNER FOR CONCEALMENT OF INCOME. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THE PEN ALTY PROVISIONS REQUIRE STRICT CONSTRUCTION AND INTERPRETATION AND PENALTY CAN BE LEVIED ONLY IF THE PREREQUISITE CONDITIONS PRESCRIBED ARE FULFILL ED AND MET. WHEN THE INCOME IS ALREADY RECORDED IN THE REGULAR BOOKS OF ACCOUNTS AND OFFERED IN THE RETURN FILED U/S 139 ON 23.03.2015 MUCH BEF ORE THE DATE OF SEARCH I.E. 04.09.2015, THEN EXPLANATION 5A CANNOT BE INV OKED AND NO PENALTY CAN BE LEVIED ON IT. IN VIEW OF THE ABOVE IT IS SUBMITTED THAT THE LEAR NED CIT(A) HAS VERY RIGHTLY DELETED THE PENALTY AND THE APPEAL FILED B Y THE DEPARTMENT IS PRAYED TO BE DISMISSED. ANKIT MITTAL ITA NO.741/IND/2019 13 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE DEC ISIONS REFERRED AND RELIED BY LD. DEPARTMENTAL COUNSEL AND LD. COUN SEL FOR THE ASSESSEE. 10. REVENUE IS AGGRIEVED WITH THE FINDING OF LD. CI T(A) DELETING THE PENALTY OF RS.1,01,17,700/- LEVIED BY THE LD. A.O U /S 271(1)(C) OF THE ACT ON ACCOUNT OF CONCEALMENT OF INCOME. LD. C IT(A) HAS DELETED THE IMPUGNED PENALTY ALLOWING THE LEGAL GRO UND HOLDING THE NOTICE ISSUED U/S 274 OF THE ACT AS VAGUE AND BAD I N LAW. ON MERITS ALSO LD. CIT(A) HAS ALLOWED THE ASSESSEES G ROUND. FOR BETTER PERUSAL, RELEVANT FINDING OF LD. CIT(A) IS EXTRACTE D BELOW:- 4.1 GROUND NO 1 & 2:- THROUGH THESE GROUNDS OF APPEAL, THE APPELLANT HAS CHALLENGED THE LEVY OF PENALTY OF RS. 1,01,17,700/- U/S 271 (1)( C) OF THE INCOME TAX ACT, 1961. THE APPELLANT FILED RETURN OF INCOME FOR A.Y. 2014-15 ON 23.03.2015 DECLARING TOTAL INCOME OF RS. 64,72,500/-. IN RESPONSE TO THE NOTICE U/S 153A THE APPELLANT HAS FILED RETURN FOR THE A.Y. 2014-15 ON 08.06.2016 DECLARING TOTAL INCOME OF RS. 3,62,34,200/- INCLUDING ADDITIONAL INCOME OFFERED U/S 132(4) OF RS. 2,97,66,605/-. THE AO PASSED THE ASSESSMENT ORDER U/S 153 A R.W.S 143(3) ON 30.11.2017 AT THE TOTAL INCOME OF RS. 3,62,61,300/-. THE APPELLANT OFFERED THE ADDITIONAL INCOME IN RESP ECT OF SALE OF SHARES OF UNNO INDUSTRIES LTD. THE APPEL LANT HAS OFFERED THE ADDITIONAL INCOME DECLARED DURING THE COURSE OF SEA RCH WHILE FILING THE ANKIT MITTAL ITA NO.741/IND/2019 14 RETURN OF INCOME U/S 139(1 )/L53A OF THE IT ACT. THE APPELLANT HAS PAID THE TAX BEFORE FILING THE RETURN OF INCOME. THE AO HAS ACCEPTED THE RETURN INCOME FILED AND NO ADDITION HAS BEEN MADE. THE APP ELLANT HAD NOT FILED THE APPEAL AGAINST THE SMALL ADDITION MADE. THE APP ELLANT WHILE FILING THE ORIGINAL RETURNED CLAIM THE INCOME FROM LONG TERMS CAPITAL GAIN FROM UNNO INDUSTRIES LTD AS EXEMPT. THE APPELLANT HAS NO T FILED THE APPEAL AGAINST THE ADDITION MADE, IT CANNOT BE CONCLUDED T HAT THE APPELLANT CONCEALED THE PARTICULAR OF INCOME OR FILED INACCUR ATE PARTICULARS. THE APPELLANT HAS DISCLOSED ALL FACTS RELATING TO ASSES SMENT IN THE RETURN OF INCOME. MAKING AN INCORRECT CLAIM IN LAW CANNOT TAN TAMOUNT TO FURNISHING OF INACCURATE PARTICULARS. MERELY BECAUSE THE APPEL LANT CLAIMED THE DEDUCTION WHICH HAS NOT BEEN ACCEPTED BY THE REVENU E WILL NOT ATTRACT THE PENALTY. 4.1.1 THE WORD 'CONCEALMENT' MEANS WHEN THE ASSESSEE HAS CONCEALED THE INCOME AND HAS NOT SHOWN THE INCOME IN ITS RETU RN OR IN ITS BOOKS OF ACCOUNTS. IN THE PRESENT CASE, THE APPELLANT HAS MADE THE COMPLE TE DISCLOSURE OF INCOME IN THE BOOKS OF ACCOUNTS AND A LSO IN THE RETURN OF INCOME U/S 139(1) AND MERE CHANGE IN HEAD OF INCOME DURING SEARCH WOULD NOT AMOUNT TO CONCEALMENT OF INCOME. THEREFOR E, THE IMPOSITION OF PENALTY WOULD NOT JUSTIFY UNDER SECTION 271 (1)( C) OF THE ACT FOR CONCEALMENT OF PARTICULARS OF INCOME. THE EXPLANATI ON SA IS APPLICABLE WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR H AS BEEN FURNISHED BEFORE THE DATE OF SEARCH BUT SUCH INCOME HAS NOT B EEN DECLARED THERE IN. IN THE PRESENT CASE, THE APPELLANT HAS DECLARED THE SALE OF SHARES OF 'URINE INDUSTRIES LTD.' UNDER THE HEAD 'INCOME FROM CAPITA L GAINS' IN THE RETURN OF INCOME FILED UNDER SECTION 139(1) AND IT IS NOT A CASE OF NON DISCLOSURE OF INCOME. THEREFORE, THE AO ERRED IN LEVYING THE P ENALTY WITHOUT APPRECIATING THE FACTS OF THE CASE AND IMPOSED THE PENALTY IN A MECHANICAL MANNER FOR CONCEALMENT OF INCOME. ANKIT MITTAL ITA NO.741/IND/2019 15 4.1.2 AS PER PROVISIONS OF SECTION 271(1)( C) OF TH E ACT, THERE ARE TWO DIFFERENT CHARGES I.E. THE CONCEALMENT OF PARTICULA RS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE PENALTY CA N BE IMPOSED FOR A SPECIFIC CHARGE. IT IS A SETTLED PROPOSITION THAT B OTH THESE LIMBS I.E. CONCEALMENT OF PARTICULARS' OF INCOME OR OF 'FURNIS HING INACCURATE PARTICULARS' OF INCOME CARRY DIFFERENT CONNOTATIONS AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF T ASHOK PAI V/S CIT (2 007) 292 ITR (SC). 4.1.3 THE PENALTY NOTICE WAS ISSUED IN A MECHANICAL MANNER WITHOUT SPECIFYING THE SPECIFIC CHARGE AS TO WHETHER THE AP PELLANT IS FOUND GUILTY OF CONCEALING THE PARTICULARS OF THE INCOME OR HAVE FU RNISHED INACCURATE PARTICULARS OF INCOME. THUS THE VERY INITIATION OF THE PRESENT PENALTY PROCEEDINGS IS NOT IN ACCORDANCE WITH THE LAW AND H AVE LED TO VITIATION OF ENTIRE PENALTY PROCEEDINGS. THE HON'BLE JURISDICTIO NAL HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX V/S KU LWANT SINGH BHATIA DATED 09.05.2018 (ITA 9 TO 14 OF 2018) HAS HELD THA T THE PENALTY U/S 271(1)(C) OF THE ACT OF 1961 IS NOT SUSTAINABLE IN LAW AS THE NOTICE WAS NOT SPECIFIC, OBSERVING AS FOLLOWS:- 'ON DUE CONSIDERATION OF THE ARGUMENTS OF THE LEAR NED COUNSEL FOR THE APPELLANT, SO ALSO CONSIDERING THE FACT THAT T HE GROUND MENTIONED IN SHOW CAUSE NOTICE WOULD NOT SATISFY THE REQUIRE MENT OF LAW, AS NOTICE WAS NOT SPECIFIC, WE ARE OF THE VIEW THAT L EARNED TRIBUNAL HAS RIGHTLY RELYING ON THE DECISION OF CIT V/S MAN JUNATHA COTTON GINNING FACTORY AND CIT V/S SSA'S EMERALD MEADOWS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE AND SET ASIDE T HE ORDER OF PENALTY IMPOSED BY THE AUTHORITIES. NO SUBSTANTIAL QUESTION OF LAW IS ARISING IN THESE APPEALS. ITA. NO(S) 912018, 10/20 18, 11/2018, 12/2018, 13/2018 AND 14/2018, FILED BY THE APPELLA NT HAVE NO MERIT AND ARE HEREBY DISMISSED. ' ANKIT MITTAL ITA NO.741/IND/2019 16 IT IS OBSERVED THAT FACTS OF THE PRESENT CASE UNDER APPEAL BEFORE ME ARE IDENTICAL TO THAT OF THE CASE OF KULWANT SINGH BHAT IA (SUPRA) IN SO FAR AS ADDITIONAL INCOME WAS OFFERED BY THE APPELLANT IN T HE RETURNS FILED AFTER THE SEARCH. IN THAT CASE ALSO, IT WAS THE OBSERVATI ON OF THE AO THAT THE ASSESSEE HAS OFFERED ADDITIONAL INCOME ONLY DUE TO SEARCH AND THE ADDITIONAL INCOME WAS NOT DECLARED IN THE RETURN FI LED U/S 139 AND THEREFORE, PENALTY PROCEEDINGS U/S 271(1)(C) WERE I NITIATED. THE PENALTIES WERE ALSO CONFIRMED BY THE CIT(A) BUT WERE DELETED BY THE TRIBUNAL HOLDING THE SAME AS NOT SUSTAINABLE IN LAW, AS NO S PECIFIC CHARGE WAS LEVIED IN PENALTY SHOW CAUSE NOTICE, LATER THE ORDE R OF THE HON'BLE IT AT WAS AFFIRMED BY THE HON'BLE JURISDICTIONAL HIGH COU RT. 4.1.4 IT HAS BEEN HELD BY HON'BLE M.P. HIGH COURT W HICH HAS BEEN UPHELD BY HON'BLE SUPREME COURT IN THE CASE OF CIT VS SURE SH CHANDRA MITTAL [200 L] 251 ITR 9, THAT WHERE THE ASSESSEE FILED RE VISED RETURN SHOWING HIGHER INCOME AFTER SEARCH AND NOTICE FOR RE-OPENIN G OF ASSESSMENT TO PURCHASES PEACE AND AVOID LITIGATION, AND DEPARTMEN T SIMPLY RESTED ITS CONCLUSION ON THE ACT OF VOLUNTARILY SURRENDERED DO NE BY THE ASSESSEE IN GOOD FAITH. HIGH COURT WAS JUSTIFIED IN HOLDING THA T NO PENALTY COULD BE LEVIED. IN VIEW OF THE ABOVE FACTS THE AO IS NOT JU STIFIED IN IMPOSING THE PENALTY ON THE RETURNED INCOME. THEREFORE, THE PENA LTY IMPOSED BY THE AO AMOUNTING TO RS.1,01,17,700/- IS DELETED. THEREFOR E, THE APPEAL ON THESE GROUNDS IS ALLOWED. 11. WE WILL FIRST TAKE UP THE LEGAL ISSUE WHICH HAS BEEN DECIDED BY LD. CIT(A) IN FAVOUR OF THE ASSESSEE HOLDING THAT T HE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF ACT IS VAGUE AND BAD IN LAW WHICH THUS MAKES THE PENALTY PROCEEDINGS VOID AB INITIO. TO EXAMINE THIS ISSUE ANKIT MITTAL ITA NO.741/IND/2019 17 WE WILL FIRST GO THROUGH THE NOTICE ISSUED TO THE A SSESSEE U/S 274 OF THE ACT FOR INITIATING PENALTY PROCEEDINGS U/S 271( 1)(C) OF THE ACT AND THE SAME IS REPRODUCED BELOW:- PAN : AGCPM0468R DA TE: 30/11/2017 TO, SHRI ANKIT MITTAL, 15A/22, MANAK,PROP. Y.NO. ROAD INDORE 452001 NOTICE UNDER SECTION 274 READWITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE A.Y. 2008- 09 IT APPEARS TO ME THAT YOU :- HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR F URNISHED INACCURATE PARTICULARS OF SUCH INCOME . YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 12 .30 PM ON 29.12.2017 AND SHOW CAUSE WHY AN ORDER IMPOSING PEN ALTY ON YOU SHOULD NOT BE MADE UNDER SECTION 271(1)(C) OF THE I NCOME TAX ACT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORT UNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORISED REPRESENTATIVE, YOU MA Y SHOW CAUSE IN WRITING OR BEFORE THE SAID DATE WHICH WILL BE CONS IDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECTION 271(1)(C). SD/- ANKIT MITTAL ITA NO.741/IND/2019 18 (P.K. SINGI) ASSTT. COMMISSIONER OF INCOME TAX (CENTRAL )-1 INDORE 12. ON PERUSAL OF THE ABOVE SHOW CAUSE NOTICE IT IS EVIDENT THAT THE LD. A.O HAS MENTIONED BOTH THE CHARGES AS PROVI DED IN SECTION 271(1)(C) OF THE ACT. LD. A.O HAS NOT STRIKED OFF ONE OF THE CHARGE NOT APPLICABLE ON THE ASSESSEE. IN THE ASSESSMENT ORDER FRAMED ON 30.11.2017 LD. A.O INITIATED THE PENALTY PROCEEDING S AGAINST THE ASSESSEE FOR CONCEALMENT OF INCOME. HOWEVER IN THE PENALTY NOTICE BOTH THE CHARGES ARE MENTIONED. UNDER THESE GIVEN FACTS WHERE SPECIFIC CHARGES HAVE NOT LEVELLED AGAINST THE ASSE SSEE IN THE NOTICE ISSUED U/S 274 OF THE ACT, WE IN VIEW OF SETTLED J UDICIAL PRINCIPLES AS WELL AS FOLLOWING THE JUDGMENT OF HONBLE JURIS DICTIONAL HIGH COURT IN THE CASE OF PCIT V/S KULWANT BHATIA (SUPRA) ARE TREATING SUCH TYPE OF NOTICES AS BAD IN LAW SINCE THEY ARE N OT MEETING THE SPECIFIC REQUIREMENT OF LAW. ONE OF THE RECENT DEC ISION OF THE THIS TRIBUNAL IN THE CASE OF BANSIDHAR SOMANI V/S DCIT (SUPRA) ITA NO.619 TO 624/IND/2017 ORDER DATED 17.12.2018 SIMI LAR ISSUE UNDER SIMILAR SET OF FACTS AND CIRCUMSTANCES HAVE ANKIT MITTAL ITA NO.741/IND/2019 19 BEEN DECIDED BY US OBSERVING AS FOLLOWS:- 10. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH VARIOUS JUDGME NTS REFERRED AND RELIED BY THE LD. COUNSEL FOR THE ASSESSEE. ASSESS EE HAS TAKEN UP THE COMMON ISSUE IN ALL THESE SIX BUNCHES CHALLENGING T HE LEGALITY OF THE PENALTY PROCEEDINGS INITIATED BY ISSUANCE OF NOTICE U/S 274 R.W.S 271(1)(C) OF THE ACT BY CONTENDING THAT IN THE PENALTY NOTICE NO SPECIFIC CHARGE HAS BEEN LEVELED AGAINST THE ASSESSEE AND THE LD.A.O HA S MERELY MENTIONED BOTH THE LIMBS I.E. CONCEALED THE PARTICULARS OF IN COME OR FURNISHED INACCURATE PARTICULARS OF INCOME. TO ADJUDICATE TH IS ISSUE WE WILL HAVE TO GO THROUGH THE IMPUGNED NOTICE U/S 274 R.W.S. 271(1 )(C) OF THE ACT WHICH HAS BEEN PLACED IN THE PAPER BOOK AND HAVE BEEN SEP ARATELY ISSUED FOR ALL THE ASSESSMENT YEARS. NO DISPUTE HAS BEEN RAISED ON THE PART OF THE DEPARTMENTAL REPRESENTATIVE THAT SIMILAR NOTICES HA VE BEEN ISSUED FOR ALL THE SIX ASSESSMENT YEARS I.E. FROM ASSESSMENT YEAR 2008-09 TO 2013-14. WE ARE THEREFORE REPRODUCING BELOW THE NOTICE DATED 30.3.2016 ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT FOR ASSESSMENT YEAR 2008-09 PLACED AT PAGE-13 OF THE PAPER BOOK:- TO, SHRI BANSIDHAR SOMANI, PROP. M/S BIO-MEDICS 74, S.R. COMPOUND, DEWAS NAKA, INDORE 452001 NOTICE UNDER SECTION 274 READWITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE A.Y. 2008-09 ANKIT MITTAL ITA NO.741/IND/2019 20 IT APPEARS TO ME THAT YOU :- HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR F URNISHED INACCURATE PARTICULARS OF SUCH INCOME . YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 04 .00 PM ON 26.04.2016 AND SHOW CAUSE WHY AN ORDER IMPOSING PEN ALTY ON YOU SHOULD NOT BE MADE UNDER SECTION 271(1)(C) OF THE I NCOME TAX ACT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNI TY OF BEING HEARD IN PERSON OR THROUGH AUTHORISED REPRESENTATIVE, YOU MA Y SHOW CAUSE IN WRITING OR BEFORE THE SAID DATE WHICH WILL BE CONS IDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECTION 271(1)(C). SD/- (AMIT KUMAR SONI) ASSTT. COMMISSIONER OF INCOME TAX (CENTRAL) -1 INDORE 11. PERUSAL OF THE SHOW CAUSE NOTICE CLEARLY MAKES VISIBLE THE FACT THAT THE LD. A.O WHILE ISSUING THE NOTICE FOR INITIATING THE PENALTY PROCEEDINGS U/S 271(1)(C) HAS LEVELED BOTH THE CHARGES AGAINST THE ASSESSEE ALONG WITH MENTIONING THE WORD OR IN BETWEEN. IT IS NOT EMA NATING OUT OF THE PENALTY NOTICE THAT THE ADDITION TO THE INCOME FOR WHICH TH E PENALTY PROCEEDINGS INITIATED COMES UNDER WHICH CATEGORY I.E WHETHER T HE ADDITION IS FOR CONCEALING THE PARTICULARS OF INCOME OR THE ADDITIO N IS FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 12. IN THESE GIVEN FACTS WHERE THE LD. ASSESSING O FFICER HAS NOT STRIKED OFF ONE OF THE LIMB PROVIDED U/S 271(1)(C) OF THE A CT FOR THE CHARGE TO BE LEVELED AGAINST THE ASSESSEE I.E. WHETHER THE PENAL TY PROCEEDINGS HAVE ANKIT MITTAL ITA NO.741/IND/2019 21 BEEN INITIATED FOR CONCEALMENT OF PARTICULARS OF IN COME OR FURNISHING INACCURATE PARTICULARS OF INCOME, VARIOUS HON'BLE C OURTS HAVE CONSISTENTLY HELD IN THE FAVOUR OF THE ASSESSEE. 13. IN THE CASE OF CIT V/S. MANJUNATHA COTTON GINNI NG FACTORY (SUPRA), IT WAS OBSERVED BY THE KARNATAKA HIGH COURT IN PARA 59 THAT THE PRACTICE OF THE DEPARTMENT SENDING A PRINTED FORM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY THE REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NOT REBUTTING THE INITIATED PRESUMPTION IS SERIOUS IN NATURE AND HE HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILITY. AS THE PROVISIONS HAVE T O BE HELD TO BE STRICTLY CONSTRUED, NOTICES ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS, WHICH HE HAS TO MEET SPECIFICALLY, OTHERWISE, PRINC IPLE OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NOTICE IS VAGUE. EVEN I N THE MATTER OF SEARCH CASE WHERE PENALTY IS LEVIED UNDER EXPLANATION 5A T O SECTION 271(1)(C), IT WAS HELD BY THE HONBLE KARNATAKA HIGH COURT THAT T HE SHOW-CAUSE NOTICE UNDER SECTION 274 WAS DEFECTIVE AS IT DOES NOT SPEL L OUT THE GROUND ON WHICH THE PENALTY IS SOUGHT TO BE IMPOSED AND CONSE QUENTLY PENALTY IMPOSED WAS CANCELLED. 14. THE JUDGMENT IN THE CASE OF CIT VS. MANJUNATHA COTTON GINNING FACTORY(SUPRA) WAS FURTHER FOLLOWED BY THE KARNATAK A HIGH COURT IN THE CASE OF CIT VS. SSA'S EMERALD MEADOWS, (2016) 73 TA XMAN.COM 248 (SC) DATED 23.11.2015 (ITA 380/2015) WHEREIN HONBLE HI GH COURT DISMISSED THE APPEAL OF THE REVENUE BY OBSERVING THAT THE TR IBUNAL HAS ALLOWED THE APPEAL OF THE ASSESSEE HOLDING THAT THE NOTICE ISSU ED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)( C) OF THE ACT OF 1961 WAS BAD-IN-LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT OF 1961, THE PENALTY PROCEEDINGS HAD BEEN INITI ATED, I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. THE TRIBUNAL WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAD ANKIT MITTAL ITA NO.741/IND/2019 22 RELIED ON THE DECISION OF THE DIVISION BENCH OF KAR NATAKA HIGH COURT DECISION IN THE CASE OF CIT VS. MANIUNATHA COTTON G INNING FACTORY(SUPRA). 15. IT IS FURTHER POINTED OUT THAT THE SLP FILED BY THE DEPTT. BEFORE THE APEX COURT ON 5.8.2016 IN THE MATTER OF CIT VS. SSA 'S EMERALD MEADOWS(SUPRA) WAS DISMISSED. 16. VERY RECENTLY THE HON'BLE JURISDICTIONAL HIGH C OURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX V/S KULWANT SI NGH BHATIA DATED 09.05.2018 (ITA 9 TO 14 OF 2018) HAS HELD THAT THE PENALTY U/S 271(1)(C) OF THE ACT OF 1961 IS NOT SUSTAINABLE IN LAW AS THE NO TICE WAS NOT SPECIFIC, OBSERVING AS FOLLOWS:- ON DUE CONSIDERATION OF THE ARGUMENTS OF THE LEARN ED COUNSEL FOR THE APPELLANT, SO ALSO CONSIDERING THE FACT THAT THE GR OUND MENTIONED IN SHOW CAUSE NOTICE WOULD NOT SATISFY THE REQUIREMENT OF L AW, AS NOTICE WAS NOT SPECIFIC, WE ARE OF THE VIEW THAT LEARNED TRIBUNAL HAS RIGHTLY RELYING ON THE DECISION OF CIT V/S MANJUNATHA COTTON GINNING F ACTORY AND CIT V/S SSA'S EMERALD MEADOWS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE AND SET ASIDE THE ORDER OF PENALTY IMPOSED BY THE AUTHO RITIES. NO SUBSTANTIAL QUESTION OF LAW IS ARISING IN THESE APPEALS. ITA. N O(S) 9/2018, 10/2018, 11/2018, 12/2018, 13/2018 AND 14/2018, FILED BY THE APPELLANT HAVE NO MERIT AND ARE HEREBY DISMISSED.' 17. WE OBSERVE THAT THE FACTS OF THE CASE BEFORE TH E HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KULWANT SI NGH BHATIA (SUPRA) WERE ALMOST IDENTICAL IN SO FAR AS ADDITIONAL INCOME WAS OFFERED BY THE ASSESSEE IN THE RETURNS FILED AFTER THE SEARCH ON T HE BASIS OF UNEXPLAINED DEPOSITS IN THE VARIOUS BANK ACCOUNTS AND FDRS AS W ELL AS INCRIMINATING TRANSACTIONS AS PER THE SEIZED DOCUMENTS. ASSESSMEN TS WERE COMPLETED U/S 153A ACCEPTING THE RETURNED INCOME U/S 153A. I T WAS THE OBSERVATION OF THE LD. AO THAT THE ASSESSEE HAS OFFERED ADDITIO NAL INCOME ONLY DUE TO ANKIT MITTAL ITA NO.741/IND/2019 23 SEARCH AND THE ADDITIONAL INCOME WAS NOT DECLARED I N THE RETURN FILED U/S 139 AND THEREFORE, PENALTY PROCEEDINGS U/S 271(1)(C ) WERE INITIATED. THE PENALTIES WERE ALSO CONFIRMED BY THE CIT(A) BUT WER E DELETED BY THE TRIBUNAL HOLDING THE SAME AS NOT SUSTAINABLE IN LAW , AS NO SPECIFIC CHARGE WAS LEVIED IN PENALTY SHOW CAUSE NOTICE. 18. THE HON'BLE ITAT INDORE BENCH IN THE CASE OF SM T. SHRUTI GARG IN IT A NO. 988 TO 1005/IND/2016 VIDE ORDER DATED 28.06.2 017 FOLLOWING THE ABOVE REFERRED PROPOSITION HELD BY THE HON'BLE SUPR EME COURT IN T ASHOK PAI V/S CIT (2007) 292 ITR 11 (SC) AND IN CIT VIS S SAS EMERALD MEADOWS (2016) 73 TAXMANN.COM 248 (SC) HAS ALSO HEL D THE PENALTY LEVIED U/ S 271(1)(C) AS UNSUSTAINABLE IN LAW AS NO SPECIFIC CHARGE WAS LEVIED IN THE PENALTY SHOW CAUSE NOTICE. 19. THE ITAT INDORE BENCH IN THE CASE OF GROUP APP EALS OF KETI SANGAM INFRASTRUCTURE (I) LTD. AND OTHERS ITA NO 1343 & 60 1/IND/2016 DATED 27.06.2018 (AUTHORED BY US) FOLLOWING THE JUDICIAL PRECEDENTS DELETED THE PENALTIES LEVIED U/S 271(1)(C) BY STATING THAT THE ASSESSING OFFICER HAS NOT STRUCK DOWN THE RELEVANT 'CHARGE' FROM THE SENTENCE IN THE CYCLOSTYLED PROFORMA OF PENALTY SHOW CAUSE NOTICE WHICH MEANS T HAT THE ASSESSING OFFICER WAS NOT SURE AS TO ON WHAT GROUND HE HAS IN ITIATED THE PENALTY PROCEEDINGS AND IN SUCH A CASE THE ALLEGED NOTICE I S NOT SUSTAINABLE IN LAW. 20. WE ALSO FIND THAT IN THE RECENT DECISION AUTHOR ED BY US IN THE CASE OF SHRI VARAD MEHTA ITA. NO.693/IND/2016 ADJUDICATING THE SIMILAR LEGAL ISSUE CHALLENGING THE VALIDITY OF THE PENALTY PROCE EDINGS INITIATED U/S 271(1)(C) OF THE ACT FOR THE ALLEGED TECHNICAL ERRO R AND NON APPLICATION OF MIND BY THE LD.A.O IN ISSUING NOTICE U/S 274 OF THE ACT WE OBSERVED AS FOLLOWS:- ANKIT MITTAL ITA NO.741/IND/2019 24 13. FROM PERUSAL OF THE ABOVE SHOW CAUSE NOTICE WE FIND THAT THE LD.A.O HAS MERELY MENTIONED THE SECTION BUT THE SPE CIFIC CHARGE I.E. WHETHER THE PENALTY HAVE BEEN INITIATED FOR CONCEAL MENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME HAS NOT BEEN MENTIONED. NOW WHETHER SUCH TYPE OF NOTICE WHICH D OES NOT SPEAK ABOUT THE SPECIFIC CHARGE LEVELED AGAINST THE ASSESSEE IS VALID AND TENABLE IN THE EYES OF LAW NEEDS TO BE EXAMINED. 14. WE FIND THAT SIMILAR ISSUE CAME UP BEFORE THE J URISDICTIONAL HIGH COURT IN THE CASE OF SHRI KULWANT SINGH BHATIA (SUP RA) WHEREIN THE HON'BLE COURT DISCUSSED THE JUDGMENT OF HON'BLE HIGH COURT IN THE CASE OF CIT V/S MANJUNATHA COTTON GINNING FACTORY (SUPRA) AND CIT V /S SSAS EMERALAD MEADOWS (SUPRA) HELD THAT ON DUE CONSIDERATION OF THE ARGUMENTS OF THE LD. COUNSEL FOR THE APPELLANT, SO ALSO CONSIDERING THE FACT THAT THE GROUND MENTIONED IN SHOW CAUSE NOTICE WOULD NOT SPECIFY TH E REQUIREMENT OF LAW, AS NOTICE WAS NOT SPECIFIC, WE ARE OF THE VIEW THAT LD. TRIBUNAL HAS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE AND SET ASIDE TH E ORDER OF PENALTY ENFORCED BY THE AUTHORITY. 15. SIMILARLY IN THE CASE OF CIT V/S MANJUNATHA GIN NING FACTORY, HON'BLE HIGH COURT OF KARNATAKA HELD THAT THE NOTI CE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT SHOULD SPECIFICALLY MEN TION THE GROUND IN SECTION 271(1)(C) WHETHER CONCEALMENT OF INCOME OR FOR FURN ISHING IN ACCURATE PARTICULARS OF INCOME. SENDING PRINTED FORM WHERE ALL GROUND OF SECTION 271(1)(C ) WOULD NOT MENTIONED THE SPECIFIC REQUIRE MENT OF LAW. ASSESSEE SHOULD KNOW THE GROUNDS ON WHICH HE HAS CHARGED SPE CIFIC OTHERWISE OPPORTUNITIES OF NATURAL JUSTICE DENIED. ON THE BA SIS OF SUCH PROCEEDINGS NO PENALTY COULD BE IMPOSED TO THE ASSESSEE. TAKIN G UP THE PENALTY PROCEEDINGS ON ONE LIMB AND FINDING THE ASSESSSEE I N ANOTHER LIMB IS BAD IN LAW. THOUGH IN THE INSTANT APPEAL THE LD. A.O HAS MADE PROPER SATISFACTION IN THE BODY OF THE ASSESSMENT ORDER BU T IN THE NOTICE ISSUED ANKIT MITTAL ITA NO.741/IND/2019 25 U/S 274 R.W.S. 271(1)(C) OF THE ACT HE FAILED TO ME NTION THE LIMBS FOR WHICH PENALTY PROCEEDINGS HAVE BEEN INITIATED. IT IS THE NEGLIGENCE OF THE LD. A.O IN NOT MAKING PROPER SPECIFIC CHARGE IN THE NOTICE U/S 274 ABOUT THE ADDITION FOR WHICH PENALTY PROCEEDINGS HAVE BEEN IN ITIATED. LD. A.O SHOULD BE CLEAR AS TO WHETHER THE ALLEGED ADDITION GOES UNDER THE LIMB OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHI NG INACCURATE PARTICULARS OF INCOME. MERELY ISSUING NOTICE IN GENERAL PROFO RMA WILL NEGATE THE VERY PURPOSE OF NATURAL JUSTICE AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF DILIP N SHRAF 161 TAXMANN 218 THAT THE QUASI- CRI MINAL PROCEEDINGS U/S 271(1)(C) OF THE ACT OUGHT TO COMPLY WITH THE PRINC IPLES OF NATURAL JUSTICE. 14. WE THEREFORE RESPECTFULLY FOLLOWING ABOVE REFER RED JUDGMENTS AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE ARE O F THE CONSIDERED VIEW THAT THE ALLEGED NOTICE ISSUED U/S 274 R.W.S. 271(1 )(C) OF THE ACT DATED 31.12.10 IS INVALID, UNTENABLE AND SUFFERS FROM THE INFIRMITY OF NON APPLICATION OF MIND BY THE ASSESSING OFFICER. WE AC CORDINGLY DIRECT TO DELETE THE PENALTY OF RS.16,00,000/- IMPOSED U/S 27 1(1)(C) ON THIS GROUND ITSELF. WE ACCORDINGLY ALLOW THE ADDITIONAL GROUND RAISED BY THE ASSESSEE ON THE LEGALITY OF THE PENALTY PROCEEDINGS INITIATE D U/S 271(1)(C) OF THE ACT. SINCE THE PENALTY U/S 271(1)(C) ALSO HAS BEEN DEALT ON THE PRELIMINARY POINTS OTHER ARGUMENTS OF THE ASSESSEE DEALING WITH THE MERITS OF THE LEVY OF PENALTY ARE NOT BEEN DEALT WITH, AS THE SAME ARE RENDERED ACADEMIC IN NATURE AND THE APPEAL OF THE ASSESSEE FOR THE ASSES SMENT YEAR 2008-09 IS ALLOWED. 21. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANC ES OF THE CASE AND RESPECTFULLY FOLLOWING THE ABOVE REFERRED JUDGMENTS OF HONBLE APEX COURT, HONBLE HIGH JURISDICTIONAL COURTS AND OTHER HONBL E COURTS AND IN VIEW OF THE SIMILARITY OF FACTS WHEREIN THE NOTICE ISSUED U /S 274 R.W.S 271(1)(C) OF THE ACT IS SUFFERING FROM SERIOUS TECHNICAL ERROR A ND NON APPLICATION OF MIND BY LD.A.O WHO FAILED TO LEVEL SPECIFIC CHARGE ON THE ASSESSEE AT THE ANKIT MITTAL ITA NO.741/IND/2019 26 TIME OF INITIATING PENALTY PROCEEDINGS DUE TO WHICH THE PRINCIPLE OF NATURAL JUSTICE SEEMS NOT TO HAVE BEEN FOLLOWED. WE ACCORD INGLY HOLD THAT THE IMPUGNED PENALTY NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT ARE INVALID AND UNTENABLE AND THUS DESERVES TO BE QUASHED. 22. WE THEREFORE ALLOW THE COMMON LEGAL GROUND RAIS ED BY THE ASSESSEE IN THE BUNCH OF THESE 6 APPEALS CHALLENGING THE LEG ALITY OF NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT AND ACCORDINGLY DIRECT THE LD.A.O TO DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AT RS.10,00,000/-, RS.6,00,000/-, RS.7,00,000/-, RS,6,00,000/- RS.7,00 ,000/- AND RS.6,50,000/- FOR THE ASSESSMENT YEARS 2008-09 TO 2 013-14 RESPECTIVELY. 13. HOWEVER THE LD. DEPARTMENTAL REPRESENTATIVE HAS REFERRED TO THE JUDGMENTS OF HONBLE BOMBAY HIGH COURT IN THE C ASE OF VENTURA TEXTILES LTD V/S CIT ITA NO.958 OF 2017 DATED 12.6.2020 AND HONBLE MADRAS HIGH COURT IN THE CASE OF M/S SUNDARAM FINANCE LIMITED V/S ACIT T.C. (APPEAL) NOS. 876 AND 877 OF 2008 ORDER DATED 23.04.2018 WHEREIN HONBLE COURTS HAVE HELD T HAT MERE NON STRIKING OF LIMB WHICH WILL NOT RENDER THE PENALTY PROCEEDINGS INFRUCTUOUS AND UNTENABLE IF THE ASSESSEE IS WELL A WARE ABOUT THE CHARGE LEVELLED AGAINST HIM DURING THE COURSE OF AS SESSMENT PROCEEDINGS. WE HOWEVER IN VIEW OF JUDICIAL JURISP RUDENCE ARE BOUND TO FOLLOW THE JUDGMENT OF HON'BLE JURISDICTIO NAL HIGH COURT IN THE CASE OF PCIT V/S KULWANT BHATIA (SUPRA) WHICH IS SQUARELY ANKIT MITTAL ITA NO.741/IND/2019 27 APPLICABLE ON THE FACTS AND ISSUES RAISED BEFORE US IN THE INSTANT APPEAL. LD. DEPARTMENTAL REPRESENTATIVE FAILED TO B RING ANY JUDGMENT OF HONBLE SUPREME COURT ON THIS ISSUE IN ITS FAVOUR. WE, THEREFORE RESPECTFULLY FOLLOWING THE JUDGMENT OF H ON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PCIT V/S KULWANT BHATIA (SUPRA) AND THE DECISION OF THIS TRIBUNAL REFERRED HERE IN ABOVE FIND NO REASON TO INTERFERE IN THE FINDING OF LD. C IT(A) DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AT RS.1,01, 17,700/- ALLOWING THE LEGAL GROUND RAISED BY THE ASSESSEE. 14. AS WE HAVE ALREADY CONFIRMED THE FINDINGS OF LD . CIT(A) DELETING THE IMPUGNED PENALTY ON LEGAL GROUND BUT F OR ACADEMIC PURPOSE WE WOULD LIKE TO DEAL WITH THE MERITS OF TH E CASE. WE FIND THAT ASSESSEE HAS SHOWN THE TRANSACTION OF SALE OF EQUITY SHARES AND HAVING EARNED LONG TERM CAPITAL GAIN OF RS. 2,9 7,66,605/- IN THE INCOME TAX RETURN. COMPLETE DETAILS OF THIS TRANSACTION WERE PROVIDED IN THE INCOME TAX RETURN FILED U/S 139(1) OF THE ACT WHEREIN THE ASSESSEE CLAIMED EXEMPTION U/S 10(38) O F THE ACT APPLICABLE TO GAIN FROM SALE OF EQUITY SHARES ON A RECOGNISED STOCK EXCHANGE HELD FOR MORE THAN ONE YEAR. AL MOST AFTER AROUND 6 MONTHS OF FILING OF THIS RETURN OF INCOME, ASSESSEE WAS SUBJECTED TO SEARCH U/S 132 OF THE ACT ON 4 .9.2015. DURING THE COURSE OF SEARCH PROCEEDINGS ASSESSEE STATED ANKIT MITTAL ITA NO.741/IND/2019 28 TO OFFER ALLEGED LONG TERM CAPITAL GAIN OF RS.2,97, 66,605/- TO TAX AS BUSINESS INCOME. NO INCRIMINATING MATERIAL WAS F OUND BY THE SEARCH TEAM RELATING TO THIS TRANSACTION. ASSESSEE HONOURED ITS STATEMENT AND OFFERED THIS INCOME OF RS.2,97,66,605 /- AS BUSINESS INCOME IN THE RETURN FILED U/S 153A OF THE ACT AND PAID TAXES THERE ON. LD. A.O INITIATED THE PENALTY PROCEEDINGS ON T HIS INCOME OF THE ASSESSEE OBSERVING THAT THE ASSESSEE WOULD NOT HAVE OFFERED THE LONG TERM CAPITAL GAIN OF RS.2,97,66,605/- AS BUSIN ESS INCOME AND PAID TAXES THEREON IF HE WAS NOT SUBJECTED TO S EARCH U/S 132 OF THE ACT. NOW THE QUESTION BEFORE US IS THAT WHERE THE PARTICULARS OF INCOME ARE DULY DISCLOSED IN THE ORIGINAL RETURN OF INCOME BUT LATER ON POST SEARCH U/S 132 OF THE ACT HEAD OF INC OME IS CHANGED AND INCOME OFFERED TO TAX UNDER OTHER HEAD OF INCOM E WHETHER THE ASSESSEE IS LIABLE TO PAY PENALTY U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME. WE OBSERVE THAT LD. CIT(A) HAS ALLOWED THE GROUND ON MERITS BY RELYING THE JUDGMENT OF HON BLE SUPREME COURT IN THE CASE OF CIT V/S SURESH CHANDRA MITTAL (2001) 251 ITR, 9 UPHOLDING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT. BEFORE US LD. DEPARTMENTAL REPRESENTATIVE HAS REFER RED AND RELIED ON THE DECISION OF HONBLE CALCUTTA HIGH COURT IN T HE CASE OF CIT ANKIT MITTAL ITA NO.741/IND/2019 29 V/S PRASANNA DUGAR (SUPRA) . HOWEVER THE FACTS ARE NOT IDENTICAL SO MUCH SO THAT IN THE CASE OF PRASANNA DUGAR VOLU NTARILY DISCLOSURE OF INCOME WAS DURING THE SEARCH BUT IN THE INSTANT APPEAL THE PARTICULARS OF INCOME WERE DULY DISCLOSE D IN THE RETURN OF INCOME FILED BEFORE THE INITIATION OF SEARCH AND THE VERY SAME TRANSACTION WAS OFFERED TO TAX UNDER ANOTHER HEAD D URING THE SEARCH. THEREFORE THIS DECISION OF JUDGMENT IN THE CASE OF CIT V/S PRASANNA DUGAR (SUPRA) RELIED BY LD. DEPARTMENTAL REPRESENTATIVE WILL NOT BE APPLICABLE. 15. WE FURTHER OBSERVE THAT LD. COUNSEL FOR THE ASS ESSEE HAS RELIED ON THE JUDGMENT OF CIT V/S HIRALAL DOSHI (SUPRA) AND HAS CLAIMED THAT THE FACTS OF THE CASE ARE SIMILAR TO T HAT OF THE ASSESSEE AND THUS THE DECISION IS SQUARELY APPLICABLE ON THE FACTS OF THE CASE. THE RELEVANT EXTRACT OF THE JUDGMENT OF HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S HIRALAL DOSHI (SUPRA) IS REPRODUCED BELOW:- 10. THE RELIANCE BY THE REVENUE UPON THE DECISION OF TH E APEX COURT IN MAK DATA (P.) LTD. (SUPRA) TO CONTEND THAT THE JUSTIFICATION OF HAVING DELETED AND ACCEPTED THE AMOUNT OF RS. 1.62 CRORES AS BUSINESS INCOME, TO BU Y PEACE IS NOT AVAILABLE. WE FIND THAT THE FACTS IN THAT CASE ARE COMPLETELY DIS TINGUISHABLE AND LE OBSERVATIONS ANKIT MITTAL ITA NO.741/IND/2019 30 MADE THEREIN WOULD NOT BE UNIVERSALLY APPLICABLE. I N THAT CASE, A SUM OF RS. 40.74 LAKHS AD NEVER BEEN DISCLOSED TO THE REVENUE. DURIN G THE COURSE OF SURVEY, THE ASSESSEE THEREIN HAD SURRENDERED THAT AMOUNT WITH A COVERING LETTER THAT THIS SURRENDER HAS BEEN MADE TO AVOID LITIGATION AND U~ PEACE WITH THE REVENUE. IN THE AFORESAID CIRCUMSTANCES, THE APEX COURT HELD THAT T HE WORDS LIKE 'TO AVOID LITIGATION AND BUY PEACE' IS NOT SUFFICIENT EXPLANATION OF AN ASSESSEE'S CONDUCT. IT HELD THAT THE ASSESSEE HAD TO OFFER AN EXPLANATION FOR THE CO NCEALMENT OF INCOME AND/OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY L EADING COGENT AND RELIABLE EVIDENCE. THE APEX COURT FURTHER RECORDS THAT IN TH E FACTS OF THE CASE BEFORE IT THE SURRENDER OF INCOME WAS NOT VOLUNTARY BUT WAS MADE ONLY ON THE ACCOUNT OF DETECTION BY THE ASSESSING OFFICER DURING THE COURS E OF SURVEY. FURTHER, THE APEX COURT ALSO RECORDS THE FACT THAT THE SURVEY WAS CON DUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HOW EVER, THE ASSESSEE THEREIN HAD NOT DECLARED THIS INCOME IN ITS RETURN OF INCOME FI LED SUBSEQUENT TO THE SURVEY WHICH AGAIN INDICATED THE FACT THAT HE HAD NO INTENTION T O DECLARE ITS TRUE INCOME. IN ANY EVENT, THE FACTS IN THE PRESENT CASE AS FOUND BY TH E CIT(A) AND THE TRIBUNAL IS THAT THE RESPONDENT- ASSESSEE HAD DISCLOSED AN AMOUNT OF RS. 1.62 CRORES IN THE ORIGINAL RETURN BY CREDITING THE SAME TO ITS CAPITA L ACCOUNT BEING LONG TERM CAPITAL GAIN ON THE SALE OF SHARE. THUS, THE APPELLANT WAS UNDER BONAFIDE BELIEF THAT THE INCOME FROM LONG TERM CAPITAL GAIN WAS EXEMPT FROM TAX. THUS, THE DECISION OF THE APEX COURT WOULD NOT APPLY TO THE FACTS ARISING IN THE PRESENT CASE. 11. THE CONTENTION ON BEHALF OF THE REVENUE THAT IN CAS E THERE IS A TAX IMPACT BY VIRTUE OF CHANGE OF HEAD DURING THE ASSESSMENT PROC EEDINGS THEN PENALTY IS IMPOSABLE AND THE DECISION OF THIS COURT IN BENNETT COLEMAN (SUPRA) WOULD NOT APPLY. IN SUCH A CASE, MR. MALHOTRA, FOR THE REVENU E EMPHASIZED THE FACT THAT IN M /S BENNETT COLEMAN (SUPRA) THE COURT WAS DEALING WITH THE CHANGE OF HEAD OF INCOME BUT NOT WITH REGARD TO A CLAIM FOR FULL EXEM PTION FROM PAYMENT OF TAX AS IN THIS CASE. WE ARE UNABLE TO ACCEPT THE AFORESAID SU BMISSION. ACCORDING TO US, THE DISTINCTION SOUGHT TO MADE ON BEHALF OF THE REVENUE IS NOT ACCEPTABLE AS THE RATIO OF THE DECISION IN BENNETT COLEMAN & CO. LTD. (SUPRA) IS WHERE COMPLETE ANKIT MITTAL ITA NO.741/IND/2019 31 DISCLOSURE OF INCOME HAD BEEN MADE IN THE RETURN OF INCOME AND HEAD OF THE INCOME UNDERGOES A CHANGE AT THE HANDS OF THE ASSESSING OFFICER WOULD NOT BY ITSELF JUSTIF Y THE IMPOSITION OF PENALTY UNDER SECTION 271 (I )(C) OF THE ACT. 12. WE FIND THAT THE COMMISSIONER OF INCOME TAX (A) DURING THE PENAL TY PROCEEDINGS HAD AGAIN EXAMINED THE ISSUE WHETHER THE CLAIM OR CAPITAL GAIN MADE IN THE REGULAR RETURN OF INCOME TO THE EXTENT OF RS. 1.62 CRORES W ITH THE PARTICULARS IN SUPPORT OF THE SAME. ON EXAMINATION, THE CI T (A) REACHES A PRIMA FACIE CONCLUSION THAT THE INCOME COULD BE REGARDED AS LONG TERM CAPITAL GAIN. ONCE T HE AFORESAID CONCLUSION HAS BEEN REACHED COUPLED WITH TWO FURTHER FACTS VIZ. THE AUTHORITIES HAVE RENDERED A FINDING OF FACT THAT THE RESPONDENT-ASSESSEE HAD NOT CONCEA LED ITS INCOME NOR FILED INACCURATE PARTICULARS ATTRIBUTABLE TO CAPITAL GAINS IN ITS REGULAR RETURN OR INCOME, THE VIEW TAKEN TO DELETE THE PENALTY IS A POSSIBLE VIEW. 13. LN THE PRESENT FACT, THE VIEW TAKEN BY THE CIT (A) AS WELL AS THE TRIBUNAL IS A REASONABLE AND POSSIBLE VIEW. NOTHING HAS BEEN SHOWN TO US TO HOLD THAT THE FINDINGS OF THE CI T (A) AND TRIBUNAL WAS PERVERSE AND/OR ARBITRARY WARRANTING ANY INTERFERENCE BY THIS COURT. IT MAY BE POINTED OUT T HAT EVEN IN THE MEMO OF APPEAL , IT IS NOT URGED BY THE REVENUE THAT THE FINDING OF THE CIT (A) AND TRIBUNAL ARE IN ANY MANNER PERVERSE. 14. IN THE ABOVE VIEW, WE SEE NO REASON TO ENTERTAI N THE QUESTION AS PROPOSED, AS IT DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION O F LAW. ACCORDINGLY, THE APPEAL IS DISMISSED. NO ORDER AS TO COSTS. 16. FROM GOING THROUGH THE ABOVE JUDGMENT WE FIND T HE SAME IS SQUARELY APPLICABLE ON THE FACTS OF THE ASSESSEE AN D THEREFORE THE LD. A.O WAS NOT JUSTIFIED IN LEVYING THE PENALTY FO R THE ALLEGED CONCEALMENT OF INCOME EVEN WHEN THE INCOME WAS DULY DISCLOSED IN ANKIT MITTAL ITA NO.741/IND/2019 32 THE ORIGINAL RETURN OF INCOME, NO INCRIMINATING MAT ERIAL WAS FOUND DURING SEARCH U/S 132 OF THE ACT RELATING TO THIS T RANSACTION OF SALE OF EQUITY SHARES AND ASSESSEE SUO MOTO OFFERED IT TO TAX UNDER OTHER HEAD OF INCOME. THUS THE FINDING OF LD. CIT(A) DEL ETING THE PENALTY OF RS.1,01,17,700/- U/S 271(1)(C) OF THE ACT NEEDS NO INTERFERENCE. THUS GROUND NO. 1 & 2 RAISED BY THE REVENUE ARE DIS MISSED. 17. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. THE ORDER PRONOUNCED IN THE OPEN COURT ON 13.11.2 020 SD/- SD/- ( KUL BHARAT) (MANI SH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 13 NOVEMBER, 2020 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE