Sh. Vishal Sethi, Delhi V. ITO, New Delhi

ITA 865/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7782 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 23-05-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 19-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Assessee Lawyers: SHAHANK JAIN
• Keywords: Opportunity of being heard; Question of law; Initiation of penalty proceedings; Reasonable cause
• Section: 6; 10

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 865/DEL/2016 A.Y. : 2011-12 VISHAL SETHI, VS. INCOME TAX OFFICER, S/O SH. TILAK RAJ SETHI, WARD 58(1), 246, 1 ST FLOOR, NEW LAYALPUR, NEW DELHI CHANDER NAGAR, DELHI 110 051 (PAN: ASKPS5232L) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SHAHANK JAIN, CA DEPARTMENT BY : MS. ASHIMA NEB, SR. DR. O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS-19), NEW DELHI DAT ED 09.11.2015 PERTAINING TO ASSESSMENT YEAR 2011-12. 2. THE ASSESSEE HAS EARLIER RAISED THE FOLLOWING GROUNDS : 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE SUBMISSIONS PLACED BEFORE HIM DURING THE COURSE OF THE APPELLATE PROCEEDINGS. HE HAS ALSO ERRED IN NOT CONSIDERING THE DECISIONS CITED BEFORE HIM OF VARIOUS COURTS/ TRIBUNALS INCLUDING DECISION OF JURISDICTIONAL TRIBUNAL. 2. THE LD. CIT(A) THEREFORE ERRED IN LAW AND ON FA CTS IN CONFIRMING THE PENALTY U/S. 271B OF THE INCOME TAX 2 ACT, 1961. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY OUGHT TO HAVE BEEN COMPLETELY DELETED. 3. THE APPELLANT MAY BE ALLOWED TO ADD, AMEND, ALTE R OR RAISE ADDITIONAL GROUNDS OF APPEAL. RELIEF CLAIMED: IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY OUGHT TO HAVE BEEN COMPLETELY DELETED. 3. HOWEVER, DURING THE HEARING, LD. COUNSEL OF THE AS SESSEE HAS FILED AN APPLICATION DATED 15.5.2018 FURNISHING THEREWITH THE REVISED GROUND OF APPEALS ALONGWITH FORM NO. 36 (REVISED) AND REQUESTED TO ACCEPT THE SAME, AS THE SAME IS LEGAL IN NATURE, WHICH READ AS UNDER:- 1. THE LD. ITO, WARD 36(2) ERRED IN LAW BY ISSUING DEFECTIVE PENALTY NOTICE UNDER SECTION 274 READ WITH SECTION 271B OF INCOME TAX ACT, 1961. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE PENALTY PROCEEDINGS ARE VOID AB INITIO. 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE SUBMISSIONS PLACED BEFORE HIM DURING THE COURSE OF THE APPELLATE PROCEEDINGS. HE HAS ALSO ERRED I N NOT CONSIDERING THE DECISIONS CITED BEFORE HIM OF VARIOU S COURTS/ TRIBUNALS INCLUDING DECISION OF JURISDICTIONA L TRIBUNAL. 3. THE LD. CIT(A) THEREFORE ERRED IN LAW AND ON FACT S IN CONFIRMING THE PENALTY U/S. 271B OF THE INCOME TAX ACT, 3 1961. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY OUGHT TO HAVE BEEN COMPLETELY DELETED. 4. THE APPELLANT MAY BE ALLOWED TO ADD, AMEND, ALTE R OR RAISE ADDITIONAL GROUNDS OF APPEAL. RELIEF CLAIMED- IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY OUGHT TO HAVE BEEN COMPLETELY DELETED. 4. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FO R THE SAKE OF BREVITY. 5. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE H AS STATED PENALTY PROCEEDINGS U/S. 271B WERE INITIATED SEPARATELY AGAI NST THE ASSESSEE BY THE AO BY ISSUING NOTICE U/S. 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961 DATED 29.3.2014 (PB-PG. 15) AND DATE OF H EARING WAS FIXED ON 15.9.2014. HOWEVER, THE SHOW CAUSE NOTICE WAS ISSUED IN A STANDARD FORM WITHOUT DELETING THEREFROM INAPPROPRIATE WORDS AND PARAGRAPHS AND IT SHOWS TOTAL NON-APPLICATION OF MIND ON THE PART OF THE AO. THUS THE PENALTY PROCEEDINGS HAD BEEN INITIATED ON ALL POSSIBLE GROUNDS U /S. 271. IT WAS FURTHER STATED THAT PENALTY NOTICE ISSUED U/S. 271B DA TED 23.7.2014 AND DATE OF HEARING WAS FIXED ON 12.8.2014, HOWEVER, THE SHOW CAUSE NOTICE WAS ISSUED U/S. 271(1)(B) AND NOT UNDER SECTION 271B ON W HICH PENALTY HAS BEEN LEVIED AND ALSO NO PENALTY PROCEEDINGS U/S. 271( 1)(B) WAS INITIATED BY THE AO, WHICH SHOWS THE NON-APPLICATION OF MIND ON TH E PART OF THE AO. HE 4 FURTHER STATED THAT THE PENALTY IMPOSED IS LIABLE T O BE QUASHED ON LEGAL REVISED GROUND AS THE ISSUE IS SQUARELY COVERED BY THE FO LLOWING DECISIONS.: - ITAT, DELHI DECISION IN THE CASE OF ABR AUTO PVT. LTD . VS. ACIT IN ITA NO. 6236/DEL/2015 DATED 4.12.2017. - ITAT, A BENCH, NEW DELHI DECISION DATED 05.12.2017 IN THE CASE OF ASHOK KUMAR CHORDIA VS. DCIT PASSED IN ITA NO. 5788 TO 5790/DEL/2014. - HONBLE KARNATAKA HIGH COURT DECISION IN THE CASE OF CIT & ORS. VS. M/S MANJUNATHA COTTON AND GINNIG FACTORY & ORS. (2013) 359 ITR 565 - APEX COURT DECISION IN THE CASE OF CIT & ANR. VS. M/S SSAS EMERALD MEADOWS IN CC NO. 11485/2016 DATED 05.8.2016. 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELE VANT RECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES ALONG WITH THE PROVISIONS OF LAW AS WELL AS THE CASE LAW CITED BY THE LD. COUNSEL OF THE ASSESSEE. I HAVE PERUSED THE REVISED GROUNDS OF APPEAL AND I AM OF THE VIEW THAT THE SAME IS LEGAL IN NATURE, HENCE, I ACCEPT THE SAME AND DEAL TH E SAME IN THE FORTHCOMING PARAS. I FIND THAT PENALTY PROCEEDINGS U/ S. 271B WERE INITIATED SEPARATELY AGAINST THE ASSESSEE BY THE AO BY ISSUING NOTICE U/S. 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961 DATED 29.3 .2014 (PB-PG. 15) 5 AND DATE OF HEARING WAS FIXED ON 15.9.2014. HOWEVER , THE SHOW CAUSE NOTICE WAS ISSUED IN A STANDARD FORM WITHOUT DELETING T HEREFROM INAPPROPRIATE WORDS AND PARAGRAPHS. THUS THE PENALTY PROCEEDINGS HAD BEEN INITIATED ON ALL POSSIBLE GROUNDS U/S. 271. I FURTHER FIND THAT PENALTY NOTICE ISSUED U/S. 271B DATED 23.7.2014 AND DATE OF HEARING W AS FIXED ON 12.8.2014, HOWEVER, THE SHOW CAUSE NOTICE WAS ISSUED U/S. 271(1)(B) AND NOT UNDER SECTION 271B ON WHICH PENALTY HAS BEEN LEVIED AND I ALSO NOTE THAT NO PENALTY PROCEEDINGS U/S. 271(1)(B) WAS INITIATE D BY THE AO IN THE ASSESSMENT ORDER. I HAVE ALSO PERUSED THE NOTICE DATED 29. 3.2014 ISSUED BY THE AO FOR INITIATION OF PENALTY AND DIRECTING THE ASSESSEE TO APPEAR BEFORE HIM ISSUED U/S. 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961. FOR THE SAKE OF CONVENIENCE, SOME OF THE CONTENTS OF THE P ENALTY NOTICE DATED 29.3.2014 ARE REPRODUCED AS UNDER:- ..IT APPEARS TO ME THAT YOU:- * HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WI TH A NOTICE UNDER SECTION 142(1)/143(2)OF THE INCOME TAX ACT, 1961 DATED * HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME IN TERMS OF EXPLANATION 1, 2, 3, 4 AND 5. YOU ARE HEREBY REQUIRED TO APPEAR BEFORE ME AT 11.30 AM/PM ON 15.04.2014 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE 6 UNDER SECTION 271 OF THE INCOME TAX ACT, 1961. IF Y OU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY TO B EING HEARD IN PERSON OR THROUGH AUTHORIZED REPRESENTATI VE YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DAT E WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS M ADE UNDER SECTION 271. 7.1 FOR THE SAKE OF CONVENIENCE, I AM ALSO REPRODUCING T HE CONTENTS OF THE SHOW CAUSE NOTICE DATED 23.07.2014 (PB-PG. 14) AS UNDER: - SUB:- PENALTY PROCEEDINGS U/S. 271(1) & 271(1)(B) FOR THE ASSESSMENT YEAR 2011-12 REGARDING. PENALTY PROCEEDINGS 271(1) AND 271(1)(B) OF THE I.T. ACT, 1961 INITIATED DURING THE COURSE OF ASSES SMENT IN YOUR CASE FOR THE ASSESSMENT YEAR 2011-12 IS PENDI NG BEFORE ME. YOU ARE HEREBY ALLOWED ON OPPORTUNITY TO APPEAR BEFORE ME ON 12.8.2014 AT 11.30 AM TO SHOW CAUSE AS TO WHY AN ORDER IMPOSING PENALTY ON YOU SH OULD NOT BE MADE U/S. 271(1)(C) & 271(1)(B), IF YOU DO N OT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OF THROUGH AUTHORIZED REPRESENTATIVE. YOU M AY FILE YOUR SUBMISSION IN WRITING ON OR BEFORE THE SA ID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS M ADE, UNDER SECTION 271(1)(C) & 271(1)(B). FAILING WHICH IT SHALL BE PRESUMED THAT YOU HAVE NOTHING TO OFFER BY WAY OF AN EXPLANATION AND THEN PENALTY U/S. 271(1)(C) & 271(1)(B) OF THE I.T. ACT, SHALL BE IMPOSED ON YOU WITHOUT ANY FURTHER REFERENCE TO YOU IN THE MATTER 7 8. AFTER PERUSING THE AFORESAID CONTENTS OF THE NOTICE D ATED 29.3.2014, I AM OF VIEW THAT THE AO HAS INITIATED THE PENALTY FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTI CULARS, WHICH IS CONTRARY TO THE PROVISIONS OF LAW. HOWEVER, THE SHOW CA USE NOTICE WAS ISSUED IN A STANDARD FORM WITHOUT DELETING THEREFROM I NAPPROPRIATE WORDS AND PARAGRAPHS. THUS THE PENALTY PROCEEDINGS HAD BEEN INITIATED ON ALL POSSIBLE GROUNDS U/S. 271 OF THE ACT. I FURTHER FIND TH AT PENALTY NOTICE ISSUED U/S. 271B DATED 23.7.2014 AND DATE OF HEARING W AS FIXED ON 12.8.2014, HOWEVER, THE SHOW CAUSE NOTICE WAS ISSUED U/S. 271(1)(B) AND NOT UNDER SECTION 271B ON WHICH PENALTY HAS BEEN LEVIED AND I ALSO NOTE THAT NO PENALTY PROCEEDINGS U/S. 271(1)(B) WAS INITIATE D BY THE AO IN THE ASSESSMENT ORDER. I AM ALSO OF THE VIEW THAT NOTICE ISSUED BY THE AO U/S. 274 READ WITH SECTION 271 OF THE ACT IS BAD IN LAW AS I T DOES NOT SPECIFY WHICH LIMB OF SECTION 271 OF THE ACT, THE PENALTY PROCEE DINGS HAD BEEN INITIATED. HOWEVER, IT SHOWS NON-APPLICATION OF MIND ON THE PART OF THE AO. THEREFORE, THE PENALTY IN DISPUTE IS NOT SUSTAINABLE IN THE EYES OF LAW. MY AFORESAID VIEW IS SUPPORTED BY THE FOLLOWING DECISIONS: - I) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS 2015 (11) TMI 1620 KARNATAKA HIGH COURT HAS HELD THAT TRIBUNAL HAS CORRECTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT 8 SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) (7) TMI 620- KARANATAKA HIGH COURT. THUS SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION N O SUBSTANTIAL QUESTION OF LAW ARISES DECIDED IN FAVOUR OF ASSESSEE. II) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS HONBLE SUPREME COURT OF INDIA REPORTED IN 2016 (8) TMI 1145 SUPREME COURT. THE APEX COURT HELD THAT HIGH COURT ORDER CONFIRMED (2015) (11) TMI 1620 (SUPRA) KARNATAKA HIGH COURT. NOTICE ISSUED BY AO UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME DECIDED IN FAVOUR OF ASSESSEE. III) ITAT, A BENCH, NEW DELHI DECISION DATED 05.12.2017 IN THE CASE OF ASHOK KUMAR CHORDIA VS. DCIT PASSED IN ITA NO. 5788 TO 5790/DEL/2014 WHEREIN THE TRIBUNAL HAS OBSERVED AS UNDER:- 9 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH THE RELEVANT RECORDS AVAILABLE WITH US. FIRSTLY, WE HAVE PERUSED THE NOTICE DATED 26.3.2013 ISSUED BY THE AO FOR INITIATING THE PENALTY AND DIRECTING THE ASSESSEE TO APPEAR BEFORE HIM AT 11.30 AM ON 26/04/2013 AND ISSUED A SHOW CAUSE TO THE ASSESSEE STATING THEREIN THAT ..YOU HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. AFTER PERUSING THE NOTICE DATED 26.3.2013 ISSUED BY THE AO TO THE ASSESSEE, WE ARE OF THE VIEW THAT THE AO HAS INITIATED THE PENALTY FOR FURNISH+ING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME AS WELL AS IN THE PENALTY ORDER DATED 30.9.2013 AO HAS STATED THAT HE IS SATISFIED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOME, WHICH IS CONTRARY TO LAW. IN VIEW OF ABOVE, THE PENALTY IS NOT SUSTAINABLE IN THE EYES OF LAW. OUR AFORESAID VIEW IS FORTIFIED BY THE FOLLOWING DECISIONS:- I) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS 2015 (11) TMI 1620 KARNATAKA HIGH COURT HAS HELD THAT TRIBUNAL HAS CORRECTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER 10 UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) (7) TMI 620- KARANATAKA HIGH COURT. THUS SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION NO SUBSTANTIAL QUESTION OF LAW ARISES DECIDED IN FAVOUR OF ASSESSEE. II) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS HONBLE SUPREME COURT OF INDIA REPORTED IN 2016 (8) TMI 1145 SUPREME COURT. THE APEX COURT HELD THAT HIGH COURT ORDER CONFIRMED (2015) (11) TMI 1620 (SUPRA) KARNATAKA HIGH COURT. NOTICE ISSUED BY AO UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE 11 PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME DECIDED IN FAVOUR OF ASSESSEE. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENTS, WE DELETE THE PENALTY IN DISPUTE AND DECIDE THE ISSUE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE. IV) ITAT, D BENCH, NEW DELHI DECISION DATED 26.5.2017 IN THE CASE OF RAJENDER JAIN VS. ACIT PASSED IN ITA NO. 6804/DEL/2013 WHEREIN THE TRIBUNAL HAS OBSERVED AS UNDER:- 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH THE RELEVANT RECORDS AVAILABLE WITH US. FIRSTLY, WE HAVE PERUSED THE ASSESSMENT ORDER WHEREIN THE AO HAS RECORDED HIS SATISFACTION ON THE PAGE 2, 2 ND PARA VIZ. I AM SATISFIED THAT IT IS A FIT CASE FOR INITIATION OF PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCOME. WE HAVE ALSO PERUSED THE NOTICE DATED 31.12.2007 ISSUED BY THE AO FOR INITIATING THE PENALTY AND DIRECTING THE ASSESSEE TO APPEAR BEFORE HIM AT ---------AM/PM ON --------200------ AND ISSUED 12 A SHOW CAUSE TO THE ASSESSEE STATING THEREIN THAT WHY AN ORDER IMPOSING THE PENALTY OF AMOUNT SHOULD NOT BE MADE U/S. 271(1)(C) OF THE I.T. ACT, 1961. AFTER PERUSING THE NOTICE DATED 31.12.2007 ISSUED BY THE AO TO THE ASSESSEE, WE ARE OF THE VIEW THAT THE AO HAS INITIATED THE PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCOME, BUT IN THE PENALTY ORDER DATED 06.11.2009 HE HAS STATED THAT HE IS SATISFIED THAT THE ASSESSEE HAS FURNISHED THE INACCURATE PARTICULARS OF INCOME. 7.1 HOWEVER, THE LD. CIT(A) HAS GIVEN CLEAR FINDING REGARDING THE FURNISHING OF INACCURATE PARTICULARS. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PARA NO. 5.3.1 OF THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) IS REPRODUCED AS UNDER:- 5.3.1 THE ABOVE FINDINGS OF THE LD. CIT(A) CLEARLY ESTABLISHES THAT THE APPELLANT HAS CONCEALED THE INCOME OF RS. 26,50,500/- AND DID NOT DECLARE IN THE RETURN OF INCOME INSPITE OF ADMITTING A DISCLOSURE OF RS. 40,00,000/- DURING SURVEY. THUS, THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE FACTS OF THE CASE CLEARLY REVEAL THAT THE 13 APPELLANT TRIED TO EVADE PAYMENT OF TAXES BY FURNISHING INACCURATE PARTICULARS OF INCOME. THEREFORE, I HOLD THAT THE AO WAS FULLY JUSTIFIED IN LEVYING THE PENALTY U/S. 271(1)(C) OF THE ACT. THE PENALTY LEVIED BY THE AO IS UPHELD. THIS GROUND OF APPEAL IS REJECTED. 8. KEEPING IN VIEW OF THE AFORESAID FINDING OF THE LD. CIT(A), WE ARE OF THE CONSIDERED VIEW THAT THE AO HAS PASSED THE ASSESSMENT ORDER WHEREIN THE AO HAS RECORDED HIS SATISFACTION ON THE PAGE 2, 2 ND PARA VIZ. I AM SATISFIED THAT IT IS A FIT CASE FOR INITIATION OF PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCOME. FURTHER THE AO VIDE HIS NOTICE DATED 31.12.2007 FOR INITIATING THE PENALTY AND DIRECTED THE ASSESSEE TO APPEAR BEFORE HIM AT ---------AM/PM ON ---- ----200------ AND ISSUED A SHOW CAUSE TO THE ASSESSEE STATING THEREIN THAT WHY AN ORDER IMPOSING THE PENALTY OF AMOUNT SHOULD NOT BE MADE U/S. 271(1)(C) OF THE I.T. ACT, 1961. AFTER PERUSING THE NOTICE DATED 31.12.2007 ISSUED BY THE AO TO THE ASSESSEE, WE ARE OF THE VIEW THAT THE AO HAS INITIATED THE PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCOME, BUT IN THE 14 PENALTY ORDER DATED 06.11.2009 HE HAS STATED THAT HE IS SATISFIED THAT THE ASSESSEE HAS FURNISHED THE INACCURATE PARTICULARS OF INCOME. IN OUR VIEW THE PENALTY IN DISPUTE IS NOT SUSTAINABLE IN THE EYES OF LAW, BECAUSE THE AO HAS NOT RECORDED ANY CLEAR FINDING WHETHER THE ASSESSEE WAS GUILTY OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. SECONDLY, THE NOTICE U/S. 271(1)(C) HAS BEEN ISSUED TO THE ASSESSEE LEVYING THE PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCOME, WHEREAS THE PENALTY IN DISPUTE HAS BEEN LEVIED BY THE AO ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS. IN OUR VIEW THE PENALTY IS NOT SUSTAINABLE IN THE EYES OF LAW. OUR AFORESAID VIEW IS FORTIFIED BY THE FOLLOWING DECISIONS:- I) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS 2015 (11) TMI 1620 KARNATAKA HIGH COURT HAS HELD THAT TRIBUNAL HAS CORRECTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID 15 NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) (7) TMI 620- KARANATAKA HIGH COURT. THUS SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION NO SUBSTANTIAL QUESTION OF LAW ARISES DECIDED IN FAVOUR OF ASSESSEE. II) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS HONBLE SUPREME COURT 16 OF INDIA REPORTED IN 2016 (8) TMI 1145 SUPREME COURT. THE APEX COURT HELD THAT HIGH COURT ORDER CONFIRMED (2015) (11) TMI 1620 (SUPRA) KARNATAKA HIGH COURT. NOTICE ISSUED BY AO UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME DECIDED IN FAVOUR OF ASSESSEE. 8.1 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENTS, WE DELETE THE PENALTY IN DISPUTE AND DECIDE THE ISSUE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE. 9. KEEPING IN VIEW OF THE AFORESAID DISCUSSIONS AND RE SPECTFULLY FOLLOWING THE AFORESAID PRECEDENTS, I CANCEL THE PENALTY IN DISPUTE BY RESPECTFULLY 17 FOLLOWING THE AFORESAID DECISIONS AND ALLOW THE REVISED GROUND RAISED BY THE ASSESSEE. SINCE THE PENALTY HAS BEEN CANCELLED, THE OTHER GROUNDS HAVE BECOME ACADEMIC AND NEED NOT BE ADJUDICATED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. ORDER PRONOUNCED ON 22/05/2018. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE: 22/05/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR , ITAT ASSISTANT REGISTRAR, ITAT, DELHI BENCHES