Subhash Chand Gupta & Sons (HUF), New Delhi V. ITO, Ward-35(4), New Delhi

ITA 853/DEL/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8471 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 05-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Income from undisclosed sources; Opportunity of being heard; Retrospective amendment; Question of law; Initiation of penalty proceedings; Reasonable cause; Penny stocks
• Section: 271(1)(c); 274; 27; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER ITA NO.853/DEL/2019 ASSESSMENT YEAR: 2014-15 SUBHASH CHAND GUPTA & SONS (HUF) 43/1, RAJPURA ROAD, NEW DELHI-110054 PAN NO.AABHS2009G VS ITO WARD 35 (4) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. P. C. YADAV, ADVOCATE RESPONDENT BY SH. S. L. ANURAGI, SR. DR DATE OF HEARING: 13/08/2019 DATE OF PRONOUNCEMENT: 07/10/2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 27.07.2018 OF THE CIT(A)-12, NEW DELHI RELATING TO A. Y. 2014-15. 2. LEVY OF PENALTY OF RS.3,59,591/- BY THE ASSESSIN G OFFICER U/S.271(1)(C) OF THE IT ACT WHICH HAS BEEN CONFIRME D BY THE CIT(A) IS THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE GRO UNDS OF APPEAL. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN HUF AND FILED THE RETURN OF INCOME ON 29.07.2014 DECLAR ING TOTAL INCOME OF RS.12,47,740/-. THE ASSESSING OFFICER COM PLETED THE PAGE | 2 ASSESSMENT U/S.143(3) ON 23.12.2016 DETERMINING THE TOTAL INCOME AT RS.18,57,743/- WHEREIN HE MADE ADDITION O F RS.18,57,743/- U/S. 68 R.W.S. 115 BBE OF THE IT ACT ON ACCOUNT OF SALE OF SHARES OF M/S.CCL INTERNATIONAL LIMITED WHICH WERE PURCHASED AT A COST OF RS.6,10,000/- BUT SOLD AT RS .18,57,743/- WITHIN A PERIOD OF 8 MONTHS FROM THE DATE OF PURCHA SE AND ON WHICH CONCESSIONAL RATE OF TAX WAS CLAIMED. THE AS SESSING OFFICER THEREAFTER INITIATED PENALTY PROCEEDINGS U/ S. 271 (1) (C) OF THE IT ACT. REJECTING THE VARIOUS EXPLANATION GIVE N BY THE ASSESSEE AND RELYING ON VARIOUS DECISIONS THE ASSES SING OFFICER LEVIED PENALTY OF RS.3,59,591/- U/S. 271 (1) (C) OF THE IT ACT. BEING 100% OF THE TAX SOUGHT TO BE EVADED. IN APPEAL THE LD. CIT(A) SUSTAINED THE PENALTY SO LEVIED BY THE ASSESSING OF FICER. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL :- 1. THE ORDER OF CIT (A) IS BAD IN LAW AND ON FACTS. 2. THE CIT(A) HAS FAILED TO APPRECIATE THAT THE PROCEEDINGS OF 271(1)(C) ARE VOID AB INITIO AS THE SAME HAS BEEN INITIATED ON THE BASIS OF NON SPECIFIC NOTICE ISSUED UNDER SECTION 2 74. 3. THE CIT(A) HAS ERRED IN NOT APPRECIATING THAT THE IMPUGNED PENALTY HAS BEEN INITIATED AND LEVIED WITHOUT ASKIN G ANY REPLY FROM THE ASSESSEE/ WITHOUT ISSUING ANY SHOW CAUSE T O EXPLAIN, DURING THE COURSE OF ASSESSMENT PROCEEDING AS EVIDE NT FROM ORDER SHEET ENTRY. 4. THE CIT(A) HAS FURTHER ERRED IN NOT APPRECIATING T HAT THE LD AO IS VOID AB INITIO AS THE LD AO HAS FAILED TO SPECIF Y THE CHARGE AGAINST THE ASSESSEE UNDER WHICH THE NOTICE UNDER S ECTION 274 OF PAGE | 3 THE ACT HAS BEEN ISSUED. 5. THE LD CIT(A) HAS FAILED TO APPRECIATE THAT FURNIS HING OF INACCURATE PARTICULAR AND CONCEALMENT OF INCOME ARE TWO SEPARATE CONNOTATION AND HENCE IT IS INCUMBENT UPON THE AO T O SPECIFY THE PARTICULAR CHARGE AGAINST SUCH ASSESSEE WHO HAS TO BE PENALIZED UNDER SECTION 271(1)(C) OF THE ACT. 6. WITHOUT PREJUDICE TO THE ABOVE THE CIT (A) HAS FAI LED TO APPRECIATE THAT ALL PARTICULARS OF INCOME WERE FULLY DISCLOSED BY THE ASSESSEE AT THE TIME OF FILING OF RETURN OF INCOME AND HENCE IT CANNOT BE SAID THAT ASSESSEE HAS FILED WRONG PARTICULARS OF HIS IN COME. 7. THE CIT(A) HAS FURTHER FAILED TO APPRECIATE THAT A SSESSEE HAS FULLY DISCLOSED THE INCOME FROM SHORT TERM CAPITAL GAIN I N ITS (ROI) FILED ORIGINALLY AND HENCE IT IS NOT A CASE OF CONCEALMEN T OF INCOME. 8. WITHOUT PREJUDICE TO THE ABOVE, THE CIT(A) HAS ERR ED IN LAW AND ON FACTS IN SUSTAINING THE PENALTY UNDER THE PROVIS IONS OF SECTION 271 (1)(C) IGNORING THAT IT IS A CASE WHERE THERE I S ONLY CHANGE OF HEAD ON INCOME AND NO CONCEALMENT OF INCOME AT ALL. 9. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN SUSTAI NING THE LEVY OF PENALTY OF RS 3,59,591/- IGNORING THAT ASSESSEE HAS MADE DISCLOSED THE PARTICULARS OF INCOME IN AN OPEN AND BONAFIDE MANNER. 10. THE ASSESSEE CRAVES LEAVE TO ADD ALTER MODIFY AND G ROUND OF APPEAL AT THE TIME OF HEARING OF THE APPEAL. 5. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE NOTICE ISSUED BY THE ASSESSING OFFICER AT THE TIME OF INITIATION OF PENALTY PROCEEDINGS, WHICH IS JURISDI CTIONAL NOTICE, SHOWS THAT IT IS NOT CLEAR AS TO UNDER WHICH LIMB O F THE PROVISIONS THE PENALTY HAS BEEN LEVIED. RELYING ON VARIOUS PAGE | 4 DECISIONS INCLUDING THE DECISION OF HONBLE KARNATA KA HIGH COURT IN THE CASE OF CIT VS. M/S. MANJUNATH COTTON & GINNING REPORTED IN 359 ITR 565 AND IN THE CASE OF CIT VS. M/S. SSAS EMERALD REPORTED IN (2016) 73 TAXMAN.COM 241, HE SU BMITTED THAT THE PENALTY SO LEVIED WAS HELD TO BE NOT VALID WHEN THE INAPPROPRIATE WORDS IN THE NOTICE WERE NOT STUCK OF F. HE SUBMITTED THAT THE SLP FILED BY THE REVENUE AGAINST THE ORDER OF THE HONBLE KARNATAKA HIGH COURT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT. REFERRING TO THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF THE SISTER CONCERN NAMELY SHOBHIT GUPTA (HUF) VS. ITO VIDE ITA NO.6765/DEL/2018 ORDER DATED 03.04.2019 HE SUBMITTE D THAT UNDER IDENTICAL CIRCUMSTANCES THE TRIBUNAL HAS CANC ELLED THE PENALTY SO LEVIED BY THE ASSESSING OFFICER AND SUST AINED BY THE CIT(A). HE ACCORDINGLY SUBMITTED THAT THIS BEING A COVERED MATTER IN FAVOUR OF THE ASSESSEE THE PENALTY SO LEV IED AND SUSTAINED BY THE CIT(A) IS NOT IN ACCORDANCE WITH L AW AND, THEREFORE, HAS TO BE DELETED. 6. SO FAR AS THE MERIT OF THE CASE IS CONCERNED HE SUBMITTED THAT THE ASSESSEE HAS SHOWN THE TRANSACTION OF SALE AND PURCHASE OF SHARES IN AN OPEN AND BONAFIDE MANNER A ND, THEREFORE, IT CANNOT BE SAID TO BE A CASE OF CONCEA LMENT OF INCOME. FURTHER THE ASSESSEE HAS ALREADY PAID THE T AX BY SURRENDERING THE AMOUNT AND THE VARIOUS DOCUMENTS F ILED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEE DINGS HAVE NOT BEEN FOUND TO BE FALSE OR UNTRUE. REFERRING TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. REL IANCE PAGE | 5 PETROPRODUCTS REPORTED IN 322 ITR 158 AND VARIOUS O THER DECISIONS HE SUBMITTED THAT THE PENALTY LEVIED BY T HE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) SHOULD BE DELET ED. 7. THE LD. DR ON THE OTHER HAND HEAVILY RELIED ON T HE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD SURRENDERED THE INCOME O F RS.18,57,743/- TO BE TAXED UNDER THE HEAD INCOME F ROM OTHER SOURCE AS AGAINST THE CLAIM OF SHORT TERM CAPITAL GAIN. THE ASSESSEE COULD NOT CONTRADICT THE FINDINGS GIVEN BY THE ASSESSING OFFICER THAT ASSESSEE HAD OBTAINED ACCOMM ODATION ENTRY TO INTRODUCE ITS UNACCOUNTED INCOME IN THE FO RM OF SHORT TERM CAPITAL GAIN ON PENNY STOCKS OF M/S. CCL INTER NATIONAL. RELYING ON VARIOUS DECISIONS THE LD. DR SUBMITTED T HAT THE PENALTY LEVIED BY THE ASSESSING OFFICER AND SUSTAIN ED BY THE CIT(A) SHOULD BE UPHELD AND THE GROUND RAISED BY TH E ASSESSEE SHOULD BE DISMISSED. 8. SO FAR AS THE NON STRIKING OF THE INAPPROPRIATE WORDS IN THE PENALTY NOTICE IS CONCERNED HE SUBMITTED THAT THE A SSESSING OFFICER IN THE ASSESSMENT ORDER HAS CLEARLY MENTION ED THE TWIN DEFAULTS I.E. FURNISHING OF INACCURATE PARTICULARS OF INCOME AND ALSO CONCEALMENT OF PARTICULARS OF INCOME. THE PENA LTY ORDER ALSO MENTIONS BOTH THE DEFAULTS AND, THEREFORE, THE CONTENTION OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS NOT CLE ARLY MENTIONED THE DEFAULT FOR WHICH PENALTY PROCEEDINGS WERE INITIATED IS NOT CORRECT. 9. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BEL OW. I FIND THE PAGE | 6 ASSESSING OFFICER IN THE INSTANT CASE HAS LEVIED PE NALTY OF RS.3,59,591/- U/S. 271 (1) (C) OF THE IT ACT WHICH HAS BEEN UPHELD BY THE CIT(A). IT IS THE SUBMISSION OF THE COUNSEL FOR THE ASSESSEE THAT THE NOTICE ISSUED U/S. 274 R.W.S. 271 (1) (C) OF THE IT ACT DOES NOT SPECIFY THE EXACT CHARGE FOR WHICH PENALTY HAS BEEN LEVIED. THE COPY OF THE NOTICE ISSUED U/S. 27 4 R.W.S. 271 (1) (C) OF THE IT ACT 1961 DATED 23.12.2016 READS A S UNDER :- NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF T HE INCOME TAX ACT, 1961. TO, M/S SUBHASH CHAND GUPTA AND SONS (IIUF) 43/1, RAJPUR ROAD CIVIL LINES, DELHI-110054 PAN: AABHS2009G WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2014-15 IT APPEARS TO ME THAT YOU:- HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE UNDER SECTION 142{1)/143(2) OF THE INCOME TAX ACT, 1961 D ATED 14.09.2016. *HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR F URNISHED INACCURATE PARTICULARS OF SUCH INCOME IN TERMS OF EXPLANATION 1,2,3,4 AND 5. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 11: 30 A.M. ON 23.01.2017 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON Y OU SHOULD NOT BE MADE UNDER SECTION 271 OF THE INCOME TAX ACT, 1961. IF PAGE | 7 YOU DO NOT WISH TO AVAIL OF THIS AN OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORISED REPRESENTATIVE YOU MAY SHOW CAUS E IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFOR E ANY SUCH ORDER IS MADE UNDER SECTION 271 OF L.T. ACT, 1961. (ARCHANA CHATURVEDI) INCOME TAX OFFICER WARD-35(4), NEW DELHI 10. I FIND UNDER IDENTICAL CIRCUMSTANCES THE COORDI NATE BENCH OF THE TRIBUNAL IN THE CASE OF SOHBIT GUPTA (HUF) A SISTER CONCERN OF THE ASSESSEE HAS CANCELLED THE PENALTY L EVIED U/S. 271 (1) (C) OF THE ACT BY OBSERVING AS UNDER :- 6. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE OR DERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE FACTS IN THE PRESENT APPEAL ARE NOT IN DIS PUTE AND THE ASSESSING OFFICER IN THE NOTICE ISSUED U/S 274 READ WITH SECTION 271(L)(C) DATED 23.12.2016 HAS NOT SPECIFIED THE EXACT CHARGE, VIZ., WHETHER THE CHARGE IS THAT THE ASSESS EE HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR CONC EALED PARTICULARS OF INCOME BY STRIKING OUT THE IRRELEVA NT PORTION OF PRINTED SHOW CAUSE NOTICE. 7. HON'BLE APEX COURT VIDE JUDGMENT IN CASE OF M/S. SSAS EMERALD MEADOWS, (2016) 73 TAXMANN.COM 248(SC) DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE REV ENUE AGAINST THE JUDGMENT RENDERED BY HON'BLE HIGH COURT O F KARNATAKA WHEREBY IDENTICAL ISSUE WAS DECIDED IN FAVO UR OF PAGE | 8 THE ASSESSEE. OPERATIVE PART OF THE JUDGMENT IN CASE OF M/S. SSA'S EMERALD MEADOWS (SUPRA) DECIDED BY HON'BLE HIGH COURT OF KARNATAKA IS REPRODUCED BELOW:- '2. THIS APPEAL HAS BEEN FILED RAISING THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW: (1) WHETHER, OMISSION IF ASSESSING OFFICER TO EXPLI CITLY MENTION THAT PENALTY PROCEEDINGS ARE BEING INITIATED FOR FU RNISHING OJ INACCURATE PARTICULARS OR THAT FOR CONCEALMENT OF I NCOME MAKES THE PENALTY ORDER LIABLE FOR CANCELLATION EVE N WHEN IT HAS BEEN PROVED BEYOND REASONABLE DOUBT THAT THE ASSES SEE HAD CONCEALED INCOME IN THE FACTS AND CIRCUMSTANCES OF THE CASE? (2 WHETHER, ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN. HOLDING THAT THE PENALTY NOTICE UNDER SECTION 274 R.W.S. 271(L)(C) I S HAD IN LAW AND. INVALID INSPITE THE AMENDMENT OF SECTION 271 (1 B) WITH RETROSPECTIVE EFFECT AND BY VIRTUE OF THE AMEND MENT, THE ASSESSING OFFICER HAS INITIATED THE PENALTY BY PROPE RLY RECORDING THE SATISFACTION FOR THE SAME? (3) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN DECIDING THE APPEALS A GAINST THE REVENUE ON THE BASIS OF NOTICE ISSUED, UNDER SECTION 274 WITHOUT TAKING INTO CONSIDERATION THE ASSESSMENT OR DER WHEN THE ASSESSING OFFICER HAS SPECIFIED THAT THE ASSESSE E HAS CONCEALED PARTICULARS OF INCOME? 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASS ESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER U NDER SECTION 274 READ WITH SECTION 271(L)(C) OF THE INCOM E TAX ACT, 1961 (FOR SHORT 'THE ACT') TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(L)(C) OF THE ACT, THE PAGE | 9 PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. .THE TRIBUNAL, WH ILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED 01 THE DERISI ON OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OR INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPI NION, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL F OR DETERMINATION BY THIS COURT, THE APPEAL IS ACCORDING LY DISMISSED.' 8. BARE PERUSAL OF THE NOTICE ISSUED U/S 27I(L)(C) APPARENTLY GOES TO PROVE THAT THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS BY ISSUING THE NO TICE U/S 274/271(L)(C) OF THE ACT WITHOUT SPECIFYING WHE THER THE ASSESSEE HAS CONCEALED 'PARTICULARS OF INCOME' O R ASSESSEE HAS FURNISHED 'INACCURATE PARTICULARS OF INCOME', SO AS TO PROVIDE ADEQUATE OPPORTUNITY TO TH E ASSESSEE TO EXPLAIN THE SHOW CAUSE NOTICE. RATHER N OTICE IN THIS CASE HAS BEEN ISSUED IN A STEREOTYPED MANNER WITHOUT APPLYING ANY MIND WHICH IS BAD IN LAW, HENCE IS NOT A VALID NOTICE SUFFICIENT TO IMPOSE PENALTY U/S 271 (1 )(C) OF THE ACT. 9. THE PENALTY PROVISIONS OF SECTION 271(L)(C) OF THE ACT ARE ATTRACTED WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTIC ULARS OF SUCH INCOME. IT IS ALSO A WELL-ACCEPTED PROPOSITI ON THAT PAGE | 10 THE AFORESAID TWO LIMBS OF SECTION 271 (1 )(C) OF TH E ACT CARRY DIFFERENT MEANINGS. THEREFORE, IT WAS IMPERAT IVE FOR THE ASSESSING OFFICER TO STRIKE- OFF THE IRRELEVANT LIMB SO AS TO MAKE THE ASSESSEE AWARE AS TO WHAT IS THE CHA RGE MADE AGAINST HIM SO THAT HE CAN RESPOND ACCORDINGLY. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (K AR) OBSERVED THAT THE LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB UNDER WHICH IT IS BEING LEVIED. AS PER HON'BLE HIGH COURT, WHERE THE ASSESSING OFFICER PROPOSED TO INVOK E FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS T O BE APPROPRIATELY MARKED. THE HON'BLE HIGH COURT HELD THA T THE STANDARD PROFORMA OF NOTICE UNDER SECTION 274 OF THE ACT WITHOUT STRIKING OF THE IRRELEVANT CLAUSES WOUL D LEAD TO AN INFERENCE OF NON-APPLICATION OF MIND BY THE ASSESSING OFFICER. THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF VS. JCIT, 291 ITR 519(SC) HAS ALSO NOTICED THAT WHERE THE ASSESSING OFFICER ISSUES NOTI CE UNDER SECTION 274 OF THE ACT IN THE STANDARD PROFORMA AND THE INAPPROPRIATE WORDS ARE NOT DELETED, THE SAM E WOULD POSTULATE THAT THE ASSESSING OFFICER WAS NOT S URE AS TO WHETHER HE WAS TO PROCEED ON THE BASIS THAT TH E ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORDIN G TO THE HON'BLE SUPREME COURT, IN SUCH A SITUATION, LEVY OF PENALTY SUFFERS FROM NON-APPLICATION OF MIND. IN TH E BACKGROUND OF THE AFORESAID LEGAL POSITION AND, HAVING REGARD TO THE MANNER IN WHICH THE ASSESSING OFFICER HAS ISSUED NOTICE UNDER SECTION 274 R.W.S. 271(L)(C) OF THE ACT PAGE | 11 DATED 23.12.2016 WITHOUT STRIKING OFF THE IRRELEVANT WORDS, THE PENALTY PROCEEDINGS SHOW ANON-APPLICATIO N OF MIND BY THE ASSESSING OFFICER AND IS, THUS, UNSUSTAINABLE. 10. THE FACTS OF THE PRESENT APPEAL ARE IDENTICAL TO THE FACTS OF THE CASE BEFORE THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF SSA'S. EMARLD MEADOWS (SUPRA). IN THE INSTANT CASE THE AO IN THE NOTICE ISSUE U/S 274 REA D WITH SECTION 271(L)(C ) OF THE ACT HAS NOT SPECIFIED AS TO WHETHER THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME OR CONCEALED HIS INCOME. HENCE, RESPECTFULLY FOLLOWING THE QUOTED DECISION OF HONB LE KARNATAKA HIGH COURT, WE CANCEL THE ORDER OF THE ASSESSING OFFICER DATED 28.06.2017 LEVYING PENALTY OF RS.3,63,590/- AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 11. I FIND THE HONBLE DELHI HIGH COURT IN THE CASE OF PCIT VS. SAHARA INDIA LIFE INSURANCE COMPANY LIMITED IN ITA NO.475/2019 ORDER DATED 02.08.2019 HAS OBSERVED AS UNDER :- 21. THE RESPONDENT HAD CHALLENGED THE UPHOLDING OF THE PENALTY IMPOSED UNDER SECTION 271 (1) (C) OF THE ACT, WHICH WAS ACC EPTED BY THE ITAT. IT FOLLOWED THE DECISION OF THE KARNATAKA HIGH COURT I N CIT V. MANJUNATHA COTTON & GINNING FACTORY 359ITR 565 (KAR) AND OBSER VED THAT THE NOTICE ISSUED BY THE AO WOULD BE BAD IN LAW IF IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) (C) THE PENALTY PROCEEDINGS HAD BEEN INITIATED UNDER I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE KARNATAKA HIG H COURT HAD FOLLOWED THE ABOVE JUDGMENT IN THE SUBSEQUENT ORDER IN COMMI SSIONER OF INCOME PAGE | 12 TAX V. SSA'S EMERALD MEADOWS (2016) 73 TAXMAN.COM 2 41 (KAR) , THE APPEAL AGAINST WHICH WAS DISMISSED BY THE SUPREME C OURT OF INDIA IN SLP NO. 11485 OF2016 BY ORDER DATED 5TH AUGUST, 2016. 12. RESPECTFULLY FOLLOWING THE DECISIONS CITED ABOV E I AM OF THE CONSIDERED OPINION THAT LEVY OF PENALTY BY THE ASSE SSING OFFICER U/S. 271 (1) (C) OF THE IT ACT WHICH HAS BEEN UPHEL D BY THE CIT(A) IS BAD IN LAW SINCE THE NOTICE DOES NOT SPEC IFY UNDER WHICH LIMB OF SECTION 271 (1) (C) OF THE IT ACT THE PENALTY PROCEEDINGS HAVE BEEN INITIATED. THEREFORE, THE PE NALTY LEVIED BY THE ASSESSING OFFICER AND SUSTAINED BY LD. CIT(A) I S CANCELLED. THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.10.2019. SD/- (R.K PANDA) ACCOUNTANT MEMBER *NEHA* DATE:- 07.10.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI PAGE | 13 DATE OF DICTATION 29.08.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 02.09.2018 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS 07.10.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 07.10.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 07.10.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 07.10.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 07.10.2019 DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER