DCIT(Central)-2, Indore, Indore V. M/s Kalyan Toll Highway Pvt.Ltd, Indore

ITA 85/Ind/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6344 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 06-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Bogus purchase; Depreciation; Search and seizure; Opportunity of being heard; Principle of natural justice; Question of law; Reasonable cause; Wrong claim; Tax effect; Revised return; Set aside
• Section: 271(1)(c); 69C; 143(3); 153A; 139(5); 274; 251; 139(1); 13; 22; 27; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI MANISH BORAD,ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER VIRTUAL HEARING ITA NO.85/IND/2020 ASSESSMENT YEAR:2013-14 DCIT(CENTRAL) - 2 INDORE / VS. M/S. KALYAN TOLL HIGHWAY PVT. LTD. INDORE (APPELLANT) (R E VENUE ) P.A. NO. AADCK9401F APPELLANT BY SHRI HARSHIT BARI, SR. DR RE SPONDENT BY SHRI AJAY TULSIYAN, CA DATE OF HEARING: 21.06.2021 DATE OF PRONOUNCEMENT: 27.07.2021 / O R D E R PER MANISH BORAD, A.M: THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE O F THE REVENUE FOR ASSESSMENT YEAR 2013-14 IS DIRECTED AGAINST TH E ORDERS OF LD. COMMISSIONER OF INCOME TAX(APPEALS) (IN SHORT LD. CIT], BHOPAL DATED 07.11.2019 WHICH ARE ARISING OUT OF THE PENAL TY ORDER PASSED M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 2 U/S 271(1)(C) OF THE ACT DATED 25.05.2018 FRAMED BY DCIT(CENTRAL) CIRCLE-II INDORE, RAISING FOLLOWING GROUND OF APPEA L: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE PENALTY OF RS.60,00,000/- LEVIED BY THE ASSESSING OFFICER FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN RESPECT OF BOGUS CLAIM OF EXPENSES OF RS.1,83,32,0378/- CAPITA LIZED FOR THE A.Y.2013-14 HAVING TAX EFFECT IN SUBSEQUENT YEARS, WITHOUT APPRECIATING THE FINDINGS OF THE ASSESSING OFFICER IN THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. BRIEF FACTS AS CULLED OUT FROM THE RECORDS ARE T HAT ASSESSEE IS A PRIVATE LIMITED COMPANY. SEARCH & SEIZURE OPERATION S U/S 132 OF THE ACT WERE CARRIED OUT AT VARIOUS PREMISES OF KAL YAN GROUP OF INDORE ON 04.09.2015 WHICH INCLUDED THE ASSESSEE CO MPANY ALSO. ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 153A WERE COMPLETED ON 29.11.2017 FOR THE YEAR UNDER APPEAL. LD. AO OBSERV ED THAT ASSESSEE HAS BOOKED BOGUS PURCHASE OF BITUMEN OF RS.1,83,38,032/-. THIS AMOUNT WAS NOT CLAIMED AS AN EXPENDITURE BUT WAS PART OF THE PROJECT COST SHOWN AS WORK-IN-P ROGRESS. DEPRECIATION ON THIS PROJECT COST WAS CLAIMED FROM A.Y. 2015-16 ON- WORDS WHICH WERE SUBSEQUENTLY REVISED BY REDUCING T HE CLAIM OF DEPRECIATION BY FILING REVISED RETURN OF INCOME. HO WEVER, FOR A.Y. M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 3 2013-14 NO ADDITION WAS MADE FOR ALLEGED AMOUNT OF RS.1,83,32,038/- BUT PENALTY PROCEEDINGS FOR U/S 27 1(1)(C) OF THE ACT WERE INITIATED. LD. AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE ON 29.11.2017 AND CARRIED OUT THE PENALTY PROCEEDIN GS AND AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE LEVIED THE PENALTY AT RS.60,00,000/- U/S 271(1)(C) OF THE ACT FOR FURNISH ING INACCURATE PARTICULARS OF INCOME. 3. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE TH E LD. CIT(A) RAISING GROUNDS ON MERITS AS WELL AS LEGAL GROUNDS. THE LD. CIT(A) DECIDED IN FAVOUR OF ASSESSEE. FIRSTLY HE ALLOWED T HE LEGAL GROUNDS BY RELYING ON THE JUDGMENT OF HON'BLE JURISDICTIONA L HIGH COURT IN THE CASE OF PR. CIT VS. KULWANT SINGH BHATIA DATED 09.05.2018 I N ITNO.9 TO 14/2018 ON OBSERVING THAT SINCE SPECIFIC CHARGE WAS NOT LEVELED AGAINST THE ASSESSEE IN THE SHOW CAUSE NOTI CE PENALTY PROCEEDING WERE VOID AND THUS NO PENALTY SHOULD HAV E BEEN LEVIED. ON MERITS ALSO ASSESSEE WAS ABLE TO SUCCEED SINCE N O ADDITION WAS MADE TO THE INCOME OF ASSESSEE BY THE LD. AO AND AS THE PENALTY IS COMPUTED ON THE TAX LEVIED ON THE ADDITIONS MADE, N O SUCH PENALTY WAS LEVIABLE BY THE LD. AO U/S 271(1)(C) OF THE ACT . M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 4 4. NOW THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNA L. LD. DEPARTMENTAL REPRESENTATIVE(DR) VEHEMENTLY ARGUED S UPPORTING THE ORDER OF LD. AO. 5. PER CONTRA LD. COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE FINDING OF LD. CIT(A). REFERENCE WAS ALSO MADE TO T HE PAPER BOOK RUNNING FROM PAGES 1 TO 72. IT WAS ALSO CONTENDED T HAT SHOW CAUSE NOTICE ISSUED ON 29.11.2017 U/S 274 R.W.S. 271(1)(C ) OF THE ACT IS DEFECTIVE AND THUS IN VIEW OF THE RATIO LAID DOWN B Y HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. KULWANT SINGH BHATIA (SUPRA) PENALTY PROCEEDINGS BECOMES VOID AB INITIO . ON MERIT IT WAS CONTENDED THAT THE ALLEGED AMOUNT OF BOGUS P URCHASE OF BITUMEN WAS NEVER CLAIMED AS AN EXPENDITURE DURING THE YEAR. IT WAS A PART OF THE PROJECT COST SUBJECT TO DEPRECIAT ION WHICH WAS CLAIMED FOR A.Y. 2015-16 ONWARDS. THE EXCESS DEPREC IATION CLAIM WAS ALSO WITHDRAWN BY FILING REVISED RETURNS. SINCE NO ADDITION WAS MADE FOR YEAR UNDER APPEAL, NO PENALTY COULD HAVE B EEN LEVIED. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE DECISIONS REFERRED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. REVENUES SOLE GRIEVA NCE IS AGAINST THE M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 5 FINDING OF LD. CIT(A) DELETING THE PENALTY LEVIED U /S 271(1)(C) OF THE ACT AT RS.60,00,000/- FOR THE ALLEGED FURNISHING OF INACCURATE PARTICULARS OF INCOME IN RESPECT OF BOGUS CLAIM OF PURCHASE EXPENSES OF RS.1,83,32,038/-. 7. WE NOTE THAT DURING THE A.Y. 2013-14 ASSESSEE HA S CAPITALIZED CERTAIN AMOUNT TOWARDS A PROJECT COST WHICH WAS SUB JECT TO DEPRECIATION FROM A.Y.2015-16 ONWARDS. THERE WAS AN ISSUE OF CLAIM OF BOGUS PURCHASE OF BITUMEN AT RS.1,83,32,038/-. I T IS NOT IN DISPUTE THAT THIS AMOUNT WAS NOT CLAIMED AS AN EXPE NDITURE DURING THE YEAR. IT WAS A PART OF PROJECT COST. DEPRECIATI ON ON THIS PROJECT WAS TO BE CLAIMED FROM A.Y. 2015-16. NO ADDITION FO R THIS AMOUNT WAS MADE BY THE LD. AO FOR THE YEAR UNDER APPEAL. T HE ASSESSEE HAS REVISED THE RETURNS FOR A.Y. 2015-16 AND ONWARDS FO R WITHDRAWING THE EXCESS CLAIM OF DEPRECIATION SO MADE. THOUGH TH ERE IS NO ADDITION MADE BY THE LD. AO, THE ALLEGED PENALTY PR OCEEDINGS WERE INITIATED AND SUBSEQUENTLY LEVIED FOR THE ALLEGED C LAIM OF BOGUS EXPENDITURE. 8. WE ALSO NOTE THAT FOR INITIATING PENALTY PROCEED INGS FOLLOWING SHOW CAUSE NOTICE WAS ISSUED U/S 274 R.W.RT. 271(1)(C) O F THE ACT : M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 6 OFFICER OF THE DEPUTY COMMISSIONER OF INCOME TAX (C ENTRAL)-2, INDORE PAN:AADCK9401E TO, M/S. KALYAN TOLL HIGHWAYS PVT. LTD., 15/3, VIDHYADEEP, MANORAMAGANJ INDORE SIR, NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(C ) OF THE INCOME TAX ACT, 1961 WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2013-14 IT APPEARS TO ME THAT YOU:- *HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH TH E RETURN OF INCOME WHICH YOU WERE REQUIRED TO FURNISH BY A NOTICE GIVEN UNDER SECTION 22 ( 1 )/22(2)/34 OF THE INDIAN INCOME TAX ACT 1922 OR WHICH YOU WERE REQUIR ED TO FURNISH UNDER SECTION 139(1) OR BY A NOTICE GIVEN UNDER SECTION 13 9(2) / 148 OF THE INCOME TAX ACT, 1961, NO. DATED OR HAVE WITHOUT REASONABLE CAUSE FA ILED TO FURNISH IT WITHIN THE TIME ALLOWED AND IN THE MANNER REQUIRED BY THE SAID SECTION 139(1) OR BY SUCH NOTICE. *HAVE 'WITHOUT REASONABLE CAUSE FAILED TO COMPLY WI TH A NOTICE UNDER SECTION 22 (4 )/23 (2) OF THE INDIAN INCOME TAX AD, 1922 OR UN DER SECTION 142 (1 )/143 (2) OF THE INCOME TAX ACT, 1961 NO DATED ______________ _____ *HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR.. .........................._ FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 11. 30 AM ON 14.12.2017 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU S HOULD NOT BE MADE UNDER SECTION 271 (1)(C) OF THE INCOME-TAX ACT 1961. IF YOU DO NOT WI SH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERS ON OR THROUGH AUTHORIZED REPRESENTATIVE YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UN DER SECTION 271 (1)(C). SD/- (VINITA DUBEY) M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 7 DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -2, INDORE 9. FROM PERUSAL OF THE ABOVE SHOW CAUSE NOTICE WE O BSERVE THAT BOTH THE CHARGES I.E. CONSIDERING THE PARTICULARS OF INC OME AND FURNISHING OF INACCURATE PARTICULAR OF INCOME HAVE BEEN LEVELE D AGAINST THE ASSESSEE. IT IS NOT CLEAR AS TO FOR WHICH CHARGE TH E PENALTY PROCEEDINGS HAVE BEEN INITIATED. AS PER THE PRINCIP LES OF NATURAL JUSTICE ASSESSEE DESERVES TO BE SHOW CAUSED FOR THE SPECIFIC DEFAULT WHICH IN THE INSTANT CASE IS NOT CLEAR FROM ABOVE R EFERRED SHOW CAUSE NOTICE. 10. WE FURTHER NOTE THAT LD. CIT(A) AFTER APPRECIAT ING THE FACT ON MERITS HELD THAT PENALTY IS NOT LEVIABLE AS NO ADDI TION WAS MADE AND ON LEGAL GROUND ASSESSEES CASE IS COVERED BY THE J UDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. KULWANT SINGH BHATIA (SUPRA) DELETED THE IMPUGNED PENALTY OBSERVING AS FOLLOWS: 5.1 GROUND NO.1 & 2 - THROUGH THESE GROUND OF APPEAL, THE APPELLANT H AS CHALLENGED THE LEVY OF PENALTY OF RS. 60,00,0001- U/S 271(1)(C) OF THE INCOME TAX ACT AND ALSO THE INITIATION OF THE PENALTY PROC EEDINGS ULS 271(1)(C) AND ALSO THE PENALTY SHOW CAUSE NOTICE ISSUED ULS 274. 5.1.1 IT IS SEEN THAT THE APPELLANT FILED ITS RETURN OF I NCOME ULS 139(1) ON M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 8 01.10.2013 DECLARING NIL INCOME. IN RESPONSE TO NOT ICE ISSUED U/S 153A, THE APPELLANT FILED THE RETURN ON 25.08.2016 DECLARING NIL INCOME. THE AO COMPLETED THE ASSESSMENT ON 29.11.2017 ON AN INCOME OF RS. 1,79,725/- BY MAKING A NOMINAL ADDITION OF RS. 1,79,725/-. IN THE ASSESSMENT ORDER, THE. AO INITIATED PENALTY ULS 271(1)(C). THE AO ALSO ISS UED A NOTICE ULS 274 R.W.S. 271(1)(C) DATED 29.11.2017 STATING THAT THE APPELLA NT HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF INCOME. AFTER CONSIDERING THE REPLY OF THE APPELLANT, THE AO PASS ED THE IMPUGNED PENALTY ORDER ULS 271(1)(C) ON 25.05.2018 LEVYING A PENALTY OF RS. 60,00,0001- FOR THIS YEAR. 5.1.2 DURING THE SEARCH ON THE APPELLANT IT WAS FOU ND THAT THE APPELLANT HAS BOOKED BOGUS BILLS OF RS. 1,83,38,038/- FOR INFLATI NG ITS PROJECT COST DURING AY 2013-14. THE APPELLANT HAS CAPITALIZED THIS AMOU NT IN ITS BOOKS OF ACCOUNTS IN THE COST OF THE PROJECT. THE AO HAS STA TED IN PARA 2.2 OF THE PENALTY ORDER THAT THE AMOUNT OFRS. 1,83,32,038/- W AS DEBITED TO THE COST OF THE PROJECT AND THEREFORE, THE PROJECT COST WAS INF LATED BY THIS AMOUNT. THE TOLL PERIOD WAS 25 YEARS WHICH STARTED IN A Y 2015- 16 AND THEREFORE, THE APPELLANT WITHDREW ITS CLAIM OF AMORTIZATION OF THE COST OF THE PROJECT, IN RESPECT OF THE INFLATED PROJECT COST, IN THE ITRS O F A Y 2015-16 AND A Y 2016- 17 WHICH WERE REVISED ULS 139(5) DURING THE ASSESSM ENT PROCEEDINGS. THE AO FURTHER NOTED THAT IN RESPECT OF EXCESS AMORTIZA TION CLAIMED ON ENHANCED PROJECT COST OFRS. 1,83,32,038/-, THE APPELLANT WIT HDREW THE CLAIM OF RS. 6,44,236/- AND RS. 8,51,408/- FOR AY 2015-16 AND AY 2016-17 RESPECTIVELY. THE AO ALSO NOTED IN PARA 2.3 THAT TH E APPELLANT HAS FURNISHED INACCURATE PARTICULARS AND CONCEALED INCOME TO THE EXTENT OF RS. 1,83,32,038/- THROUGH CLAIM OF BOGUS EXPENDITURE ON ACCOUNT OF PURCHASE OF M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 9 BITUMEN AND THEN INFLATED THE PROJECT COST AND CONC LUDED THAT THE APPELLANT HAD MADE A WRONG CLAIM ON ACCOUNT OF EXPENDITURE IN CURRED AGAINST COST OF THE PROJECT UNDER CONSIDERATION AND IS IN DEFAULT F OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME AND LEVIED A PENALTY OF RS. 60,00,0001- U/S 271(1)(C). 5.1.3 THE APPELLANT HAS CHALLENGED THE INITIATION O F THE PENALTY PROCEEDINGS ON THE CONTENTION THAT THE NOTICE ISSUED UNDER SECT ION 274 WAS A DEFECTIVE NOTICE AS NO SPECIFIC CHARGE WAS MENTIONED AGAINST THE APPELLANT. THE APPELLANT HAS CHALLENGED THE LEVY OF PENALTY U/S 271 (1)( C) ON THE GROUND THAT THERE WAS NO SATISFACTION IN THE PENALTY ORDER AS WELL, AS BOTH THE CHARGES WERE REITERATED IN THE PENALTY ORDER. IT IS ALSO CONTENDED THAT THE PENALTY ORDER IS VAGUE AND WRONG AS THE AO HAS INVO KED EXPLANATION 1 TO SECTION 271(1)(C) AS REFERRED IN PARA 3.1.2 OF THE PENALTY ORDER, WHICH IS NOT AT ALL APPLICABLE IN CASES OF SEARCH AND SEIZURE. I T IS ALSO SUBMITTED BY THE APPELLANT THAT THE INFLATED PROJECT COST OF RS. 1,83,32,0381- WAS CAPITALIZED TO THE COST OF THE PROJECT IN THIS YEAR AND PROPORTION ATE DEDUCTION ON ACCOUNT OF AMORTIZATION DEPRECIATION WAS CLAIMED ONLY FROM A Y 2015-16 ONWARDS, WHICH CLAIM WAS ALSO WITHDRAWN BY THE APPELLANT IN A Y 2015-16 AND A Y 2016-17 BY FILING A REVISED RETURN AND HAS NOT MADE THIS CLAIM IN THE RETURNS FILED ULS 139(1) FOR A Y 2017-18 ONWARDS. T HE APPELLANT HAS ALSO CONTENDED THAT IT IS AN UNDISPUTED FACT THAT IT HAS NOT CLAIMED ANY DEDUCTION OFRS. 1,83,32,038/- OR ANY PART THEREOF IN THE IMPUGNED ASSESSMENT YEAR AND NO ADDITION ON THIS ACCOUNT HAS BEEN MADE BY THE AO IN THIS YEAR, THEREFORE, THE PENALTY ULS 271(1)(C) CANNOT BE LEVIED ON THIS ACCOUNT. FINALLY THE APPELLANT CONTENDED THAT SINCE NO ADDITION MADE HAS BEEN MADE ON THIS ISSUE IN THE YEAR UNDER CONSIDERA TION, NO PENALTY ULS M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 10 271(1)(C) OUGHT TO HAVE BEEN LEVIED. 5.1.4 AFTER TAKING INTO CONSIDERATION THE ASSESSMEN T ORDER AND ALSO THE PENALTY ORDER AND ALL THE CONTENTIONS OF THE APPELL ANT CAREFULLY, IT IS SEEN THAT THE AMOUNT OF RS. 1,83,32,038/-, WHICH WAS FOUND TO BE MERELY BILLS PROCURED BY THE APPELLANT, WAS DEBITED BY THE APPEL LANT TO THE CAPITAL WORK IN PROGRESS I COST OF THE PROJECT UNDER CONSTRUCTION IN THIS YEAR . THE SAID PROJECT WAS NOT COMPLETED IN THIS YEAR AND THEREFOR E, NO INCOME WAS EARNED AND NO DEDUCTION WAS CLAIMED BY THE APPELLANT. THE SAID PROJECT WAS COMPLETED IN A Y 2015-16, WHEN THE FIRST PROFIT AND LOSS ACCOUNT WAS PREPARED AND INCOME WAS OFFERED AND PROPORTIONATE D EDUCTION OF COST OF THE PROJECT WAS CLAIMED. ALL THESE FACTS ARE NOT DISPUT ED IN THE ASSESSMENT ORDER AND ALSO IN THE PENALTY ORDER. THE AO HAS ALS O NOT MADE ANY ADDITION ON ACCOUNT OF INFLATED PROJECT COST TO THE RETURNED INCOME OF THIS YEAR, NOR ANY PART OF THE SAME HAS BEEN DISALLOWED AND THERE IS NO IMPACT ON THE INCOME OF THIS YEAR ON ACCOUNT OF ANY ADJUSTMENT ON THIS ISSUE. THEREFORE, PENALTY ULS 271(1)(C) OUGHT NOT TO HAVE BEEN LEVIED BY THE AO IN RESPECT OF THE INFLATED PROJECT COST OF RS. 1,83,32,0381- IN T HIS YEAR. 5.1.5 IT IS ALSO SEEN THAT THE IMPUGNED PROJECT WAS COMMENCED IN A Y 2015- 16 AND THE PROPORTIONATE COST OF THE PROJECT WAS CL AIMED AS DEDUCTION FOR THE FIRST TIME IN AY 2015-16 AGAINST THE INCOME EAR NED FROM THE SAID PROJECT. THE APPELLANT HAS WITHDRAWN ITS CLAIM OF PROPORTION ATE DEDUCTION ON THE INFLATED PROJECT COST IN AY 2015-16 AND AY 2016-17 BY FILING THE REVISED RETURNS FOR THESE YEARS, WHICH FACT IS ALSO MENTION ED IN THE ASSESSMENT ORDER AS WELL AS IN THE PENALTY ORDER. THE AO HAS A LSO LEVIED SEPARATE PENALTIES U/S 271AAB FOR BOTH THESE ASSESSMENT YEARS IN RESPECT O F THE CLAIM OF DEPRECIATION ON INFLATED PROJECT COST WITH DRAWN BY THE APPELLANT, IT IS THEREFORE, RIGHTLY CONTENDED BY THE APPELLANT TH AT THE AO HAS LEVIED THE PENALTY ULS 271(1)(C) TWICE IN RESPECT OF THE SAME ISSUE, ONCE IN AY 2013-14 ON THE ENTIRE INFLATED PROJECT COST AND SECOND TIME IN AY 2015-16 AND AY M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 11 2016-17 IN RESPECT OF THE PROPORTIONATE CLAIM OF IN FLATED PROJECT COST WITHDRAWN BY THE APPELLANT. THIS ACTION OF THE AO I S ALSO NOT JUSTIFIED. SINCE THE APPELLANT HAS NOT CLAIMED ANY DEDUCTION IN THIS YEAR AND THE AO HAS ALSO NOT MADE ANY ADDITION IN THIS YEAR, PENALTY U/S 271(1)(C) CANNOT BE LEVIED ON THE APPELLANT FOR THIS YEAR. 5.1.6 IT IS ALSO SEEN FROM THE NOTICE DATED 29.11.2 017 ISSUED ULS 274 WHICH IS AT PAGE 34 OF THE PAPER BOOK, THAT BOTH THE CHAR GES I.E. CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME ARE MENTIONED THEREIN. SIMILARLY A PERUSAL OF THE PENAL TY ORDER SHOWS THAT AGAIN BOTH THE CHARGES ARE MENTIONED IN PARA 2.3, PARA 3. 1.2 AND ALSO IN CONCLUDING PARA 3.1.7 OF THE PENALTY ORDER. AS PER THE PROVISIONS OF SECTION 271 (1)( C) OF THE ACT, THERE ARE TWO DIFFERENT CHA RGES I.E. THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. PENALTY CAN BE IMPOSED FOR A SPECIFIC CHARGE. IN VI EW OF THE DECISION OF HONOURABLE SUPREME COURT IN THE CASE OFT. ASHOK PAI VIS CIT (2007) 292 ITR 11 (SC) IT IS NOW A SETTLED PROPOSITION THAT CO NCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY D IFFERENT CONNOTATION. IT IS EQUALLY SETTLED PROPOSITION THAT WHERE THE CHARGE F OR LEVYING PENALTY IS NOT SPECIFIC, THE NOTICE U/S 271 (1)( C) IS BAD IN LAW AS IT DOES NOT MENTIONED THE SPECIFIC LIMB OF SECTION 271(1)(C) OF THE ACT UNDER WHICH IT HAS BEEN INITIATED. WHEN THE NOTICE DOES NOT SPECIFY THE CHARGE FOR LEV Y OF PENALTY, IT HAS BEEN HELD THAT THE PENALTY CANNOT BE LEVIED. THE HON'BLE SUPREME COURT IN DILIP N. SHROFF VIS JCIT (2007) 291 ITR 519 (SC), HAS OBSERV ED THAT WHILE ISSUING THE NOTICE UNDER SECTION 274 R.W.S. 271, IN THE STANDAR D FORMAT, THE ASSESSING OFFICER SHOULD DELETE THE INAPPROPRIATE WORDS OR PA RAGRAPH, OTHERWISE, IT MAY INDICATE THAT THE ASSESSING OFFICER HIMSELF WAS NOT SURE AS TO WHETHER HE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED HIS INCOME OR HAD FURNISHED INACCURATE PARTICULARS OF INCOME. THE HONOURABLE COURT FURTHER OBSERVED THAT THE AO HAS NOT STRUCK DOWN TH E RELEVANT WORD SENTENCE IN THE CYCLOSTYLED PROFORMA OF THE PENALTY SHOW CAUSE NOTICE, THEREFORE, THE AO WAS NOT SURE THAT ON WHAT GROUND HE IS LEVYING THE PENALTY. M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 12 5.1. 7 THE PENALTY NOTICE WAS ISSUED IN MECHANICAL MANNER WITHOUT SPECIFYING THE SPECIFIC CHARGE AS TO WHETHER THE AP PELLANT IS FOUND GUILTY OF CONCEALING THE PARTICULAR OF INCOME OR HAVE FURNISH ED INACCURATE PARTICULARS OF INCOME. THUS THE VERY INITIATION OF THE PENALTY PROCEEDING IN THIS CASE IS NOT IN ACCORDANCE WITH LAW AND HAS LED TO VITIATION OF ENTIRE PENALTY PROCEEDINGS. VERY RECENTLY THE HON'BLE JURISDICTION AL HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX VIS KULWANT SINGH BHATIA DATED 09.05.2018 (ITA 9 TO 14 OF2018) HAS HELD THAT THE P ENALTY ULS 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 VIS MANJUNATHA COTTON GINNING FACTO RY AND CIT VIS SSA'S EMERALD MEADOWS RIGHTLY ALLOWED THE APPEAL OF THE A SSESSEE AND SET ASIDE THE ORDER OF PENALTY IMPOSED BY THE AUTHORITIES. NO SUBSTANTIAL QUESTION OF LAW IS ARISING IN THESE APPEALS. ITA. NO(S) 912018, 10/2018, 11/2018, 12/2018, 13/2018 AND 14/2018, FILED BY THE APPELLAN T HAVE NO MERIT AND ARE HEREBY DISMISSED. 5.1.8 IT IS OBSERVED THAT FACTS OF THE PRESENT CASE UNDER APPEAL BEFORE ME ARE IDENTICAL TO THAT OF THE CASE OF KULWANT SINGH BHATIA (SUPRA) IN SO FAR AS ADDITIONAL INCOME WAS OFFERED BY THE ASSESSEE IN TH E RETURNS FILED AFTER THE SEARCH AND PENALTIES ULS 271(1)(C) WERE LEVIED ON T HE BASIS OF SHOW CAUSE NOTICE ISSUED WITHOUT STRIKING OFF EITHER OF THE TW O CHARGES WHICH FACTS ARE IDENTICAL IN THE PRESENT APPEAL. IN THE CASE OF KUL WANT SINGH BHATIA ALSO, IT WAS THE OBSERVATION OF THE AO THAT THE ASSESSEE HAS OFFERED ADDITIONAL INCOME ONLY DUE TO SEARCH AND THE ADDITIONAL INCOME WAS NOT DECLARED IN THE RETURN FILED ULS 139 AND THEREFORE, PENALTY PRO CEEDINGS U/S 271(1)(C) M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 13 WERE INITIATED, WHICH FACT IS ALSO IDENTICAL WITH T HE PRESENT APPEAL. IN THE CASE BEFORE THE HONOURABLE HIGH COURT, THE PENALTIE S WERE DELETED BY THE TRIBUNAL HOLDING THAT THE SAME AS NOT SUSTAINABLE I N LAW, AS NO SPECIFIC CHARGE WAS LEVIED IN PENALTY SHOW CAUSE NOTICE, LAT ER THE ORDER OF THE HONOURABLE IT AT WAS AFFIRMED BY THE HONOURABLE JUR ISDICTIONAL HIGH COURT. THEREFORE, THE PROPOSITION LAID DOWN BY THE HONOURA BLE JURISDICTIONAL HIGH COURT OF MADHYA PRADESH IS APPLICABLE IN THE PRESEN T APPEAL ALSO AND IT IS HELD THAT THE PENALTY PROCEEDINGS INITIATED IN THIS CASE ARE NOT AS PER LAW AND THE PENALTY SO LEVIED IS WRONG. 5.1.9 THE APPELLANT HAS STATED THAT IN ITS OTHER GR OUP CASES ALSO, WHEREIN PENALTIES WERE LEVIED ULS 271 (1)( C) IN THE ASSESS MENT PROCEEDINGS CARRIED OUT AS A RESULT OF THE SEARCH, AND PENALTY PROCEEDI NGS WERE INITIATED IN AN IDENTICAL MANNER, IN WHICH THE SAME WERE INITIATED IN THE PRESENT APPEAL, HAVE BEEN DELETED BY THE HONOURABLE ITAT INDORE BEN CH IN THE CASES OF MIS KETI SANGAM INFRASTRUCTURE (I) LTD. AND OTHER GROUP COMPANY APPEALS AND ALSO IN THE CASE OF SHRUTI GARG AND OTHER INDIVIDUA L CASES OF THE GROUP, COPIES OF SUCH ORDERS HAVE ALSO BEEN FILED AT PAGE NO. 31 TO 53 AND AT PAGE NO. 08 TO 30 RESPECTIVELY OF THE CASE LAW PAPER BOO K. A PERUSAL OF THE ORDER PASSED IN THE CASE OF KETISANGAM INFRASTRUCTURE (I) LTD. IN IT NO. 516/INDL2017 AND OTHER CASES BY THE HONOURABLE JURI SDICTIONAL ITAT ON 27.06.2018 IT IS SEEN THAT THE PENALTIES LEVIED ULS 271(1)(C) OF THE ACT HAS BEEN DELETED. AFTER DISCUSSING THE ISSUE AT LENGTH AND AFTER ANALYZING THE VARIOUS DECISIONS, THE HONOURABLE ITAT IN PARA 13 O N INTERNAL PAGE 32 OF THE ORDER HELD THAT; 'FROM THE PERUSAL OF THE ABOVE JUDGMENT AND EXAMINI NG THE FACTS OF THE INSTANT NINE APPEALS, WE FIND THAT IN ALL THESE CAS ES THE ASSESSING OFFICER HAS NOT STRUCK DOWN THE RELEVANT WORD FROM THE SENT ENCE IN THE CYCLOSTYLED PROFORMA OF PENALTY SHOW CAUSE NOTICE W HICH MEANS THAT THE ASSESSING OFFICER WAS NOT SURE AS TO ON WHAT GROUND HE HAS INITIATED THE PENALTY PROCEEDINGS AND IN SUCH A CASE THE ALLEGED NOTICE IS NOT SUSTAINABLE IN LAW AND IS LIABLE TO BE QUASHED. BE, THEREFORE, RESPECTFULLY M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 14 FOLLOWING THE JUDGMENTS AND DECISIONS REFERRED TO A BOVE, ALLOW THIS COMMON LEGAL GROUND OF THE ASSESSEE'S IN THESE NINE APPEALS AND DELETE THE PENALTIES LEVIED U/S 271 (L)(C) OF THE ACT IN A LL THESE CASES. ' THEREFORE, FOLLOWING THE DECISION OF THE HONOURABLE IT A T INDORE BENCH RENDERED ON 27.06.2018 IN THE APPELLANT GROUP CASES ITSELF, IT IS HELD THAT THE PENALTY LEVIED BY THE AO IN THE IMPUGNED ORDER IS INVALID. 5.1.10 FURTHER, THE APPELLANT HAS RIGHTLY CONTENDED THAT NO PROPER SATISFACTION HAS BEEN DRAWN IN THE PENALTY ORDER, W HERE EXPLANATION 1 OF SECTION 271(1)(C ), HAS BEEN INVOKED AND THE APPELL ANT HAS BEEN HELD TO BE GUILTY OF CONCEALMENT OF INCOME AND ALSO FURNISHING INACCURATE PARTICULARS OF INCOME, WHICH IS ALSO NOT IN ACCORDANCE WITH LAW. E XPLANATION 1 OF SECTION 271(1)(C) CANNOT BE INVOKED IN THE SEARCH CASES 5.1.11 THE APPELLANT ALSO GET SUPPORT FROM THE DECI SION OF HONOURABLE M. P. HIGH COURT WHICH HAS ALSO BEEN UPHELD BY THE HONOUR ABLE SUPREME COURT IN THE CASE OF CIT VIS SURESH CHAND MITTAL (2001) 251 ITR 9, WHEREIN IT WAS HELD THAT WHERE THE ASSESSEE FILED REVISED RETURN S HOWING HIGHER INCOME AFTER SEARCH AND NOTICE FOR REOPENING OF ASSESSMENT AND THE DEPARTMENT SIMPLY RESTED ITS CONCLUSIONS ON THE ACTION OF SURR ENDER MADE BY THE ASSESSEE, NO PENALTY U/S 271(1) COULD BE LAVIED. T HOUGH IN THE PRESENT APPEAL BEFOE ME, THE AO HAS NOT MADE ANY ADDITION, ON THE ISSUE ON WHICH PENALTY HAS BEEN LEVIED AND ONLY A NOMINAL ADDITION OF RS.1,79,725/- WAS MADE U/S 69C OF WHICH NO PENALTY WAS LEVIED. FOR TH IS REASON ALSO THE PENALTY LEVIED U/S 271(1)(C) IN THE PRESENT APPEAL IS HELD TO BE WRONG. 11. WE HAVE CAREFULLY GONE THROUGH THE DETAILED FIN DING OF FACTS BY LD. CIT(A) AS WELL AS RELIANCE PLACED BY HIM ON SET TLED JUDICIAL M/S. KALYAN TOLL HIGHWAYS PVT. LTD. ITANO.85/IND/2020 15 PRECEDENCE AND THUS IN THE TOTALITY OF FACTS AND SE TTLED LEGAL POSITION AS HELD BY HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. KULWANT SINGH BHATIA (SUPRA) AND ALSO IN VIEW OF DECISION OF THIS TRIBUNAL IN OTHER GROUP CONCERNS OF THE ASSESSEE, F IND NO REASON TO INTERFERE IN THE FINDING OF LD. CIT(A) DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT BY THE LD. AO. THUS, FINDING O F LD. CIT(A) IS CONFIRMED. THE REVENUE FAILS TO SUCCEED AND THE SOL E GROUND RAISED BY THE REVENUE IS DISMISSED. 12. IN RESULT, APPEAL FILED BY THE REVENUE IN ITA N O.85/IND/2020 IS DISMISSED. ORDER WAS PRONOUNCED AS PER RULE 34 OF THE I.T.A.T. RULES 1963 ON 27.07.2021. SD/- (MADHUMITA ROY) SD/- (MANISH BORAD) JUDICIAL MEMBER A CCOUNTANT MEMBER INDORE; DATED : 27/07/2021 PATEL/PS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR, INDORE