M/s. Dhansar Engineering (P) Ltd., Dhanbad V. ACIT, C.C. - VII, Kolkata, Kolkata

ITA 921/KOL/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4782 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 12-04-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 22-06-2011
• Court: TRIBUNAL
• Department Lawyers: SRIDHAR BHATTACHARYA J
• Assessee Lawyers: AMIT KUMAR ACA LD
• Keywords: Business expenditure; Income from undisclosed sources; Search and seizure; Principle of natural justice; Initiation of penalty proceedings; Revised return
• Section: 153A; 27; 132; 15; 139

Judgement Text

ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, K OLKATA BEFORE : SHRI P.M. JAGTAP , ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBE R I.T.A NOS. 921 & 922/KOL/2011 A.YS. 2005-06 & 2006-07 M/S. DHANSAR ENGINEERING P.LTD VS. ACIT, CC-VII, KOLKATA PAN: AABCD 5271E (APPELLANT) (RESPON DENT) FOR THE APPELLANT/ASSESSEE : SHRI AMIT KUMAR , ACA, LD.AR FOR THE RESPONDENT/DEPARTMENT: SHRI SRIDHAR BHATTACHARYA, JCIT, LD.DR DATE OF HEARING: 12-04-2016 DATE OF PRONOUNCEMENT: 10 -06-2 015 ORDER SHRI S.S.VISWANETHRA RAVI, JM THESE TWO APPEALS OF THE ASESSEE ARISE OUT OF THE TWO SEPARATE ORDERS OF THE CIT(A)-CENTRAL-III, KOLKATA IN APPEAL NOS. 81/C C-VII/CIT(A), C-I/09-10 & 82/CC-VII/CIT(A),C-I/09-10 DATED 07-03-2011 AND 0 4-03-2011 FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07 RESPECTIVELY A GAINST THE ORDERS OF PENALTY LEVIED U/S. 271(1) ( C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). ITA NO. 921/KOL/2011 A.Y 2005-06 ( BY THE ASSESSE E) 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUND OF APPEAL:- THAT THE LD. CIT(A) ERRED IN CONFIRMING THE IMPO SITION OF PENALTY U/S. 271(1) ( C) OF THE I.TAX ACT @ 100% AMOUNTING TO RS.3,56,422/- ON THE AMOUNT OF INCOME DISCLOSED U/S. 132(4) ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 2 AND INCLUDED IN THE RETURN FILED U/S. 153A. THE PEN ALTY LEVIED IS WRONG AND NEED TO BE DELETED. ITA NO. 922/KOL/2011 A.Y 2006-07 ( BY THE ASSESSEE) 3. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUND OF APPEAL:- THAT THE LD. CIT(A) ERRED IN CONFIRMING THE IMPO SITION OF PENALTY U/S. 271(1) ( C) OF THE I.TAX ACT @ 100% AMOUNTING TO RS.2,29,779/- ON THE AMOUNT OF INCOME DISCLOSE D U/S. 132(4) AND INCLUDED IN THE RETURN FILED U/S. 153A. THE PEN ALTY LEVIED IS WRONG AND NEED TO BE DELETED. 4. BESIDES ABOVE, THE APPELLANT ASSESSEE HAS INITIA LLY RAISED THE FOLLOWING COMMON ADDITIONAL GROUNDS OF APPEAL FOR BOTH THE AS SESSMENT YEARS UNDER CONSIDERATION:- 1. THAT THE LD. AO ERRED IN NOT MENTIONING THE L IMB OF SEC 271(1) ( C) THAT HAS BEEN VIOLATED BY THE ASSESSEE, IN THE NOTICE ISSUED U/S. 274 R.W.S 271 OF THE INCOME TAX ACT 196 1. FURTHER, THE LD. AO HAS NOT RECORDED ANY SATISFACTION AS TO WHETHER THE ASSESSEE HAS CONCEALED HIS INCOME OR HAS FURNISHED INACCURATE PA RTICULARS OF HIS INCOME IN THE PENALTY ISSUED U/S. 274/271 OF THE IN COME TAX ACT 1961. HENCE, THE PENALTY PROCEEDING IS BAD IN LAW A ND THE SAME IS LIABLE TO BE QUASHED. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE ADMIT THE ADDITIONAL GROUNDS AS RAISED B Y THE ASSESSEE FOR BOTH YEARS SINCE THE ISSUE INVOLVED THEREIN IS A LEGAL ISSUE A ND ALL THE FACTS NECESSARY FOR ADJUDICATION THEREOF ARE ALREADY AVAILABLE ON RECOR D. WITH THE CONSENT OF PARTIES BOTH THE CASES HEARD TOGETHER AND ANSWER THE SAME C OLLECTIVELY AND CONSOLIDATED ORDER IS PASSED. ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 3 6. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY AND MAINLY ENGAGED IN BUSINESS OF TRANSPORTATION, CIVIL CONSTR UCTION AND OTHER RELATED CONTRACTUAL JOBS. A SEARCH AND SEIZURE OPERATION WA S CONDUCTED U/S. 132 OF THE ACT IN THE CASE OF M/S. DHANSAR ENGINEERING COMPANY PVT. LTD AND ITS ASSOCIATES ON 22-08-2007 AND SUBSEQUENT DATES. IN THE COURSE OF POST SEARCH PROCEEDINGS M/S. B.K. AGARWALLA & SONS, HUF FILED A DISCLOSURE PETITION DATED 24-09-2007 BEFORE THE AO, DDIT(INV), KOLKATA DECLAR ING TOTAL DISCLOSURE OF RS.2.50 CRORES, WHEREIN THE ASSESSEE MADE ITS DISCL OSURE TO THE EXTENT OF RS.16,52,160/-. IN RESPONSE TO NOTICE DT: 12-05-200 8 ISSUED U/S. 153A OF THE ACT, THE ASSESSEE FILED HIS REVISED RETURN OF INCO ME ON 11-09-2008 SHOWING TOTAL INCOME OF RS. 39,01,810/- AS AGAINST THE TOTA L INCOME OF RS. 32,20,620/- DECLARED U/S. 139(1) UNDER ORIGINAL RETURN FILED O N 19-12-2005 FOR A.Y 2005- 06. 7. IN THE COURSE OF SEARCH PROCEEDINGS THE ASSESSEE FILED ITS EXPLANATION REGARDING CASH ETC... AS FOUND DURING THE SEARCH W ITH FULL PARTICULARS CONTAINING BOOKS OF ACCOUNT ETC. BEFORE THE AO . THE AO EXAMIN ED THE SAME AND NO ADVERSE INFERENCE WAS DRAWN AGAINST THE ASSESSEE AN D THE REVISED RETURN OF INCOME AS FILED IN RESPONSE TO NOTICE DT: 12-05-200 8 ISSUED U/S. 153A OF THE ACT WAS ACCEPTED BY THE AO. ACCORDINGLY, HE DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.36,33,300/- U/S. 153A/143(3) OF THE ACT BY AN ORDER DATED 02-06- 2009 FOR THE ASSESSMENT YEAR 2005-06 I.E UNDER CONS IDERATION. THEREAFTER, THE AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE U/S. 27 4 R.W.S 271 WHY THE PENALTY U/S. 271(1) (C) OF THE ACT SHOULD NOT BE IMPOSED AG AINST THE ASSESSEE FOR NOT RECORDING AN AMOUNT OF RS.9,71,298/- STATED TO HAVE BEEN FOUND IN THE RESIDENCE OF ONE SRI. RAVI AGARWALA REFERRING TO SEIZED DOCUM ENT RAD/1 DURING SEARCH OPERATION IN BOOKS OF ACCOUNT AND NOT DISCLOSING IN THE ORIGINAL RETURN. IN ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 4 RESPONSE TO SUCH PENALTY NOTICE THE ASSESSEE SUBMIT TED THAT THE SAID ADDITIONAL INCOME ABOVE WAS OFFERED BY THE ASSESSEE CLAIMING A S ITS OWN AND DISCLOSED THE SAME IN THE RETURN FILED U/S. 153A OF THE ACT AND W HICH SHALL BE TREATED AS ORIGINAL RETURN FILED U/S. 139(1) OF THE ACT. AFTE R CONSIDERING THE VARIOUS SUBMISSIONS OF THE ASSESSEE, THE AO WAS OF THE VIEW THAT THE ASSESSEE CONCEALED PARTICULARS OF INCOME AND NOT DISCLOSED IN THE RETU RN FILED U/S. 139 AND ACCORDINGLY, HE IMPOSED PENALTY OF RS.3,55,422 & RS .2,29,779/- FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION IMPOSITION OF PENALTY U/S. 271(1) ( C) FOR CONCEALMENT OF PARTICULARS OF INCOME. RELEVANT FIND INGS OF THE AO FOR IMPOSITION OF PENALTY ARE REPRODUCED HEREIN BELOW F OR THE SAKE OF CLARITY:- BESIDES THE ABOVE THE A.O. IN THE ASSESSMENT ORDER DISALLOWED A SUM OF RS. 48,568/- BEING VALUATION FEE. THE A.O. CONSI DERED THE VALUATION FEE AS NOT ALLOWABLE AS BUSINESS EXPENDITURE. HOWEV ER, THE VALUATION FEE WAS FOR THE PURPOSE OF VALUING THE ASSETS HYPO THECATED TO THE BANK FOR RENEWAL OF WORKING CAPITAL LOAN. AS REGARDS, THE PENALTY PROCEEDINGS U/S. 271(1)( C ) FOR CONCEALMENT OF INCOME, IT HAS BEEN ADMITTED BY THE AO THAT THIS AMOUNT REPRESENTS A SUM DISCLOSED U/S 132(4), AS SUCH EXPLANATION 5 TO SECTION 271( 1) ( C) WOULD COME INTO FORCE AND THE SAID EXPLANATIO N ABSOLVES THE ASSEESEE FROM THE BURDEN OF PENALTY UNDER THE SAID SECTION PROVIDED THAT THE FACTS ARE DISCLOSED IN THE SAID DISCLOSUR E AND TAX TOGETHER WITH INTEREST, IF ANY, IS PAID BY THE ASSESSEE. IN HIS CASE, THE ASSESSEE INCLUDED THIS INCOME IN HIS RETURN FLIED U/S L53A A ND TAX WAS ALSO PAID. IT IS FURTHER SUBMITTED HERE THAT THE ADDITIONAL I NCOME, INCLUDED IN THE RETURN U/S 153A BY THE ASSESSEE WAS WITH REGARD T O THE DISCLOSURE MADE BY THE ASSESSEE U/S 132(4) FOR THE A/YS 2005- 06 & 2006-07. SO, RETURNING HIGHER INCOME U/S 153A ONLY REVEALS THE G OOD INTENTION OF THE ASSESSEE WHICH HAS BEEN WRONGLY INTERPRETED AS CONCEALMENT OF INCOME BY THE ASSESSEE. THE INCOME OFFERED IN THE R ETURN U/S 153A IS SOUMOTO, BEFORE IT COULD HAVE BEEN IDENTIFIED BY YO U. NO SHOW CAUSE NOTICE WAS EVER ISSUED BY YOU OF DEPARTMENT IN CONN ECTION WITH THE ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 5 SAME. HENCE THE SAME CAN'T BE TREATED AS CONCEALMEN T OF INCOME IN ANY YEAR. AS SUCH PENALTY CAN'T BE IMPOSED ON SUCH AMOUNT DISCLOSED IN THE RETURN FILED U/S 153A, KEEPING IN VIEW THE PROVISION OF EXPLANATION 5 TO SEC. 271(L)(C). FURTHER, WE WOULD LIKE TO DRAW YOUR LAND ATTENTION TO THE PROVISION OF SEC. 153A(1) (A) OF THE I.T ACT THAT A RETURN FILED IN RESPONSE TO THE NOTICE U/S 153A OF THE I.T. ACT WILL BE TREATED AS RETURN FILED U/S. 139 OF THE L.T. ACT AND ALL PROVISIONS OF I. T. ACT WILL A PPLY AS THE RETURN IS FILED U/S 139 OF THE I.T. ACT. IN VIEW OF ME ABOVE FACT THE RETURN FILED U/S 15 3A WILL HAVE SAME TREATMENT AS RETURN FILED U/S 139 OF THE I.T. ACT . THE INCOME DISCLOSED M THE RETURN U/S 153A WILL BE TREATED AS INCOME DISCLOSED IN THE RETURN FILED U/S 139 OF THE L.T. ACT. THE RETURN FILED EARLIER YEARS WERE ABATED BY ISSUE OF NONCE U/S 153A. NOW, THE RETURN FILED U/S. 153A IS THE ONLY RETURN FILED U/E 139(1) OF THE I.T. ACT. AS PER EXPLANATION 5 TO SEC. 27(1) (C) NO PENALTY IS LEVIABLE IF THE RETURN IS FILED U/S. 139(1) OF THE I.T ACT INCLUDIN G THE ADDITIONAL INCOME. IN VIEW OF THE PROVISIONS OF SEC. 153A, OL D RETURNS & PROCEEDING RELATING TO THE YEAR ARE ABATED AND NEW PROCEEDING STARTED WITH REFERENCE TO NEW RETURN FILED, WHICH IS A RETURN FILED UNDER 139 OF THE I.T. ACT, AS PER SEC.153A(1)(A) OF THE I.T . ACT. IN THIS CASE DURING THE SEARCH SEIZURE PROCEEDINGS, CERTAIN INCRIMINATING DOCUMENTS/BOOKS OF ACCOUNTS WERE FOU ND WHICH CLEARLY REVEALS THAT THE ASSESSEE HAD EARNED INCOME WHICH WAS NOT DISCLOSED IN THE RETURN OF INCOME FILED BY THE ASSE SSEE U/S 139(1) WITH THE I.T. DEPARTMENT. ONLY WHEN SEARCH WAS CONDUCT ED AND THOSE INCRIMINATING DOCUMENTS, UNEXPLAINED JEWELLERY ETC ARE UNEARTHED IN COURSE OF SEARCH AND THE ASSESSEE WAS CONFRONTED WITH THE SAME, THE ASSESSEE HAD NO OTHER OPTION BUT TO MAKE DISCLO SURE OF INCOMES. HENCE IT IS OBVIOUS THAT THE INCOME FILED U/S. 153A WAS NOT DISCLOSED VOLUNTARILY BUT DIRECTLY RELATED TO THE SEARCH TOO K PLACE . HAD THE SEARCH NOT TAKEN PLACE, THE ASSESSEE WOULD HAVE NEV ER COME OUT WITH THE DISCLOSURE IS VOLUNTARILY. ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 6 THE FACT THAT THE ASSESSEE HAD COME OUT WITH THE DI SCLOSURE DOES NEITHER MEAN THAT THE ASSESSEE HAD NOT CONCEALED IT S INCOME NOR DOES IT MEAN THAT THE DISCLOSURE WAS VOLUNTARILY. THE D ISCLOSURE WOULD HAVE BEEN DEEMED TO BE VOLUNTARILY, HAD THE ASSESSE E COME OUT WITH THE DISCLOSURE PRIOR TO SEARCH. AS SUCH THE ASSESS EES CONTENTION THAT THE INCOME DISCLOSED WAS VOLUNTARY AND THE PRAYER T HAT THE PROCEEDING SHOULD BE DROPPED IS NOT ACCEPTED. THE CONTENTION OF THE ASSESSEE THAT EXPLANATION 5 OF SECTION 271(1) ( C) IS APPLICABLE IS WRONG SINCE THE SAID EXPLANATI ON IS APPLICABLE IN RESPECT OF SEARCH INITIATED BEFORE 01.06.2007 BUT IN THIS CASE SEARCH WAS INITIATED ON 22.08.2007 I.E. AFTER 01.08.2007. IN RESPECT OF SEARCH INITIATED U/S. 132(1) ON OR AFTER 01.08.2007, NEWL Y INSERTED EXPLANATION 5A, INSERTED BY FINANCE ACT, 2007 W.E.F 01.06.2007 AND AS SUBSTITUTED BY FINANCE ( NO.2) ACT, 2009 W.E.F 0 1.06.2007 IS APPLICABLE. IN THE INSTANT CASE THE SEARCH WAS INIT IATED AFTER 01.06.2007 AND THEREFORE, THE EXPLANATION 5A IS APP LICABLE SINCE THE ASSESSEE FILED THE RETURN U/S. 139 BEFORE THE DATE OF SEARCH AND THE INCOME WAS DECLARED THEREIN. ACCORDINGLY, NOTWITHST ANDING THAT THE INCOME HAS BEEN DECLARED IN THE RETURN (U/S. 153A) FILED AFTER THE DATE OF SEARCH, THE ASSESSEE SHALL BE DEEMED TO HAVE CON CEALED THE PARTICULARS OF INCOME. REGARDING THE ASSURANCE OF THE DDIT(INV), AS CLAIME D BY THE ASSESSEE, THE ASSESSEE COULD NOT PRODUCE ANY SUPPOR TING DOCUMENTS/COMMUNICATION IN WRITING OF DDIT (INV) IN RESPECT OF SUCH ASSURANCE THAT PENALTY SHALL NOT BE LEVIED. THE ASSESSEE HAS ALSO RELIED UPON THE JUDGEMENTS OF THE FOLLOWING CASES:- 1. ILLUMINATION INDIA VS- ASST.CIT(2006) 100 TTJ 426( PUNE) 2. CIT VS- SURESH CHANDRA MITTAL (2001) 170 CTR 182(S C) 3. LOTUS LEARNING (P) LTD VS- DCIT (2006) 7 SOT 540(M UM) 4. CIT VS- PUNJAB TYRE 162 ITR 571 5. CIT VS- SHIV OIL AND DAL MILL (2006) 281 ITR 221(A LL) 6. NAVBHARAT ENTERPRISES (P) LTD VS- ASSTT.CIT (2009) 118 ITD 8(HYD) 7. CIT VS- SANTOSH FINANCIER (2001) 247 ITR 742 (KAR) 8. ADDL.CIT VS- JEEVAN LAL SAH (1994) 205 ITR 244(SC) 9. CIT VS- S. DHANABAI (2009) 178 TAXMAN 242 (DELH I) ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 7 I HAVE GONE THROUGH THE GIST OF THE DECISIONS. MOST OF THE CASES ARE FACTUALLY DIFFERENT FROM THE INSTANT CASE. THE DECISIONS ARE IN RESPECT OF PROVISION EXISTING PRIOR TO THE INSERTIO N OF EXPLANATION 5A. THE INSTANT CASE IS NOT A CASE OF ANY BONAFIDE CLAI M OF EXPENSES HAVING BEEN DISALLOWED. AS REGARDS INTENTION OF TH E ASSESSEE, THE CONCEALMENT OF INCOME HAS BEEN DETECTED IN ACTION O F SEARCH & SEIZURE AND AS SUCH MALAFIDE IS APPARENT. IN VIEW OF THE ABOVE AND THE EXPLANATION 5A, THE AS SESSEES EXPLANATIONS ARE NOT SATISFACTORY. IN VIEW OF ABOVE, I AM SATISFIED THAT THIS A FIT CA SE FOR IMPOSITION OF PENALTY U/S. 271(1) ( C) FOR CONCEALM ENT OF PARTICULARS OF INCOME IN THE RETURN FILED U/S. 139 AND ACCORDIN GLY, AN AMOUNT OF RS.3,55,422/- IS IMPOSED AS PENALTY U/S. 271(1) (C ) OF THE I.T ACT, 1961. 8. AGGRIEVED BY SUCH ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT-(A). BEFORE HIM THE ASSESSEE REITERA TED THE SUBMISSIONS AS MADE BEFORE THE AO DURING THE ASSESSMENT PROCEEDING U/S. 153A AS WELL AS PENALTY PROCEEDING U/S. 271(1) ( C) OF THE ACT. THE SPECIFI C FINDING OF THE CIT-(A) WAS THAT THE ASSESSEE CONCEALED THE PARTICULARS OF INCO ME AS THAT THE UNDISCLOSED INCOME AS FOUND AND DECLARED THEREAFTER U/S. 153A W HICH WAS NOT DECLARED IN THE ORIGINAL RETURN, ACCORDINGLY, MADE APPLICABLE THE EXPLANATION 5A OF S. 271(1) ( C) OF THE ACT AND CONFIRMED THE PENALTY ORDER AS IM POSED BY THE AO BY OBSERVING AS UNDER:- 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE L.D A.R . THERE IS NO DISPUTE THAT DURING THE COURSE OF SEARCH EVID ENCE OF UNACCOUNTED INTEREST INCOME EARNED DURING THE F.Y.2 004-05 AMOUNTING TO RS. 9,71,2981 WAS FOUND . THE RETURN O F INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE, AS PER PROVISION OF SECTION 139(1) OF THE ACT ON 19.12.2005 BUT THE ABOVE INCOME WAS NOT DECLARED IN THE RETURN FILED UNDER SECTION 139( 1) OF THE ACT. HOWEVER IN THE RETURN FILED IN RESPONSE TO NOTICE U NDER SECTION 153A THE ABOVE UNACCOUNTED INCOME 1 INVESTMENT WAS DULY DECLARED. NOW ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 8 THE ISSUE TO BE DECIDED WHETHER THE ASSESSEE HAS CO NCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME AND IS LIABLE FOR PENALTY UNDER SECTION 271( 1) (C) OF THE ACT. 4.1 ACCORDING TO THE L.D A,R SINCE THE UNDISCLOSED INCOME HAS BEEN DULY OFFERED FOR TAXATION IN RESPONSE TO THE RETUR N FILED UNDER SECTION L53A OF THE ACT, THE APPELLANT IS NOT LIABLE FOR PE NALTY. THE SUBMISSION OF THE ASSESSEE WAS CONSIDERED AND FOUND TO HAVE NO MERIT IN THE LIGHT OF THE EXPLANATION 5 A TO SECTIO N 271 (L) ( C) INSERTED BY THE FINANCE ACT 2007 WHICH READS AS UND ER: 'EXPLANATION 5A - WHERE IN THE COURSE OF SEARCH IN ITIATED UNDER SECTION 132 (ON OR AFTER THE I' DAY OF JUNE, 2007), THE ASSESSEE IS FOUND TO BE THE OWNER OF- (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABL E ARTICLE OR THING (HEREINAFTER IN THIS EXPLANATION REFERRED TO AS ASS ETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME FOR ANY PR EVIOUS YEAR; OR (B) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF A CCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND THE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF , ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIO NS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR' WHICH HAS ENDED BEFORE THE DATE OF THE SEARCH AND (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YE AR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN: (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FO R SUCH YEAR HAS EXPIRED AND THE ASSESSEE HAS NOT FILED THE RETURN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HI M IN ANY RETURN OF INCOME FURNISHED 'ON OR AFTER THE DATE OF THE S EARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUS E (C) OF SUB-SECTION (1) OF THIS SECTION, BE DEEMED T O HAVE CONCEALED THE PARTICULAR OF HIS INCOME OR FURNISHED INACCURAT E PARTICULARS OF SUCH INCOME. ' 4.2 FROM THE PLAIN READING OF THE EXPLANATION 5A , IT IS APPARENT THAT IF ANY UNDISCLOSED INCOME IS FOUND OR DECLARED AFTE R THE DATE OF SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1.06.2007 , THE ASSESSEE WILL BE LIABLE FOR PENALTY ON THE SAID INC OME/ INVESTMENT NOT ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 9 ALREADY DECLARED IN THE RETURN FILED UNDER 139(1) O F THE ACT. IN THE CASE UNDER CONSIDERATION, THE ASSESSEE HAD FILED RE TURN OF INCOME FOR THE PREVIOUS YEAR IN QUESTION ON 19.12.2005. HOWEVE R THE INCOME IN QUESTION WAS NOT OFFERED IN THE SAID RETURN FILED U NDER SECTION 139(1) OF THE ACT. . HENCE NOTWITHSTANDING THAT SUCH INCOM E IS DECLARED BY HIM IN RETURN OF INCOME FURNISHED AFTER THE DATE OF THE SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB- SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULAR OF HIS INCOME OR FURNISHED INACCURATE PA RTICULARS OF SUCH INCOME. CONSIDERING ABOVE I DONT FIND ANY INFIRMIT Y IN THE ORDER OF THE A.O. FURTHER THE DECISIONS RELIED BY THE L.D A. R ARE NOT APPLICABLE AS THE FACT OF THE CASE AND PROVISIONS O F THE ACT APPLIED BY THE A.O IS NOT COMPARABLE. MORE OVER SINCE THE A.O HAS ALREADY IMPOSED MINIMUM PENALTY, HENCE NO FURTHER RELIEF CA N BE GRANTED. ACCORDINGLY THE PENALTY OF RS.3,55,422/- IMPOSED BY THE A.O UNDER SECTION 271(1) ( C) IS CONFIRMED. 9. CHALLENGING THE IMPUGNED ORDER OF THE CIT(A), TH E ASSESSEE IS IN APPEAL BEFORE US BY RAISING THE ADDITIONAL GROUND OF APPEA L FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION, WHICH HAVE BEEN MENTIONE D HEREIN ABOVE. 10. DURING THE COURSE OF HEARING BEFORE US THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE CASE ON HAND IS COVERED AND FALL S FOR CONSIDERATION OF JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 565 (KARN), WHEREIN THE HONBLE HIGH COURT HAS HELD THAT IN ORDER TO IMPOSE PENALTY U/S. 271(1) (C ) OF THE ACT THE AO IS BOUND TO MAKE SPECIFIC ALLEGATION REFERRING ON WHAT CHARGE THE AO IS IMPOSING PENALTY WHETHER IT IS FOR CONCEA LMENT OF INCOME OR FURNISHING ANY INACCURATE PARTICULARS OF INCOME. TH E LD.AR POINTED OUT TO THE NOTICE 02-06-2009 ISSUED U/S. 274 R.W.S 271(1) (C) OF THE ACT WHEREIN THE AO FAILED TO STRIKE OUT THE IRRELEVANT CHARGE IN THE P RINTED FORMAT OF SAID NOTICE. FURTHER, NOTICE ISSUED U/S. 274 OF THE ACT SHOULD S PECIFICALLY STATE AS TO WHETHER ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 10 PENALTY IS BEING PROPOSED TO BE IMPOSED FOR CONCE ALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. HE ALSO RELIED ON THE ORDER DATED 06-11-2015 OF THE TRIBUNAL IN THE CASE OF SUVAPRASSANNA BHATTACHARYA VS. ACIT, KOLKATA IN ITA NO. 1303/KOL/ 2010 FOR THE AY 2006- 07. 11. ON THE CONTRARY, THE LD. DR HAS RELIED ON THE O RDERS OF THE LOWER AUTHORITIES. HE FURTHER SUBMITTED THAT THE CASE IS NOT COVERED BY THE SAID JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF SUPRA. 12. HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. THE QUESTION BEFORE US IS AS TO WHETHER THE PENALTY NOTICE AND ORDER PASSED THEREAFTER BY THE AO AND CONFIRMED BY THE CIT(A) FA LLS FOR CONSIDERATION IN PURSUANCE OF THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT SUPRA . THAT ON PERUSAL OF THE SAID SHOW CAUSE NOTICE ISSUED U/S. 274 R.WS. 271(1)( C) OF THE ACT PURPORTEDLY ISSUED TO SHOW CAUSE WHY THE PENALTY SH ALL NOT BE IMPOSED, WE FIND THAT IRRELEVANT PORTION OF SUCH NOTICE WAS NOT STRU CK OUT BY THE AO. THEREFORE, THE SAID NOTICE IS NOT CLEAR WHETHER IT WAS ISSUED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF PARTICULARS OF SUCH INCOME. WE FIND THAT THE ASSESSEE AS RELIED ON THE B BENCH OF KOLKATA TRIBUNAL ORDER DATED 06-11- 2015 IN THE CASE OF SUVAPRASSANNA BHATTACHARYA VS. ACIT, KOLKATA IN ITA NO. 1303/KOL/2010 FOR THE AY 2006-07 IS APPLICABLE TO T HE CASE ON HAND. THE RELEVANT FINDINGS IN THE ORDER OF TRIBUNAL ARE REPR ODUCED HEREIN BELOW FOR BETTER UNDERSTANDING:- 8. THE NEXT ARGUMENT THAT THE SHOW CAUSE NOTICE U/ S. 274 OF THE ACT WHICH IS IN A PRINTED FORM DOES NOT STRIKE OUT AS TO WHETHER THE PENALTY IS SOUGHT TO BE LEVIED ON THE FOR FURNISHI NG INACCURATE PARTICULARS OF INCOME OR CONCEALING PARTICULARS O F SUCH INCOME. ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 11 ON THIS ASPECT WE FIND THAT IN THE SHOW CAUSE NOTIC E U/S. 274 OF THE ACT THE AO HAS NOT STRUCK OUT THE IRRELEVANT PART. IT IS THEREFORE NOT SPELL OUT AS TO WHETHER THE PENALTY PROCEEDINGS ARE SOUGHT TO BE LEVIED FOR FURNISHING INACCURATE PARTICULARS OF IN COME OR CONCEALING PARTICULARS OF SUCH INCOME. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 5 65 (KARN), HAS HELD THAT NOTICE U/S. 274 OF THE ACT SHOULD SPE CIFICALLY STATE AS TO WHETHER PENALTY IS BEING PROPOSED TO BE IMPOSED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE HONBLE HIGH COURT HAS FURTHER LAID DOW N THAT CERTAIN PRINTED FORM WHERE ALL THE GROUNDS GIVEN IN SECTION 271 ARE GIVEN WOULD NOT SATISFY THE REQUIREMENT OF LAW. THE COURT HAS ALSO HELD THAT INITIATING PENALTY PROCEEDINGS ON ONE LIMB AND FIND THE ASSESSEE GUILTY IN ANOTHER LIMB IS BAD IN LAW. IT WAS SUBMIT TED THAT IN THE PRESENT CASE, THE AFORESAID DECISION WILL SQUARELY APPLY AND ALL THE ORDERS IMPOSING PENALTY HAVE TO BE HELD AS BAD IN L AW AND LIABLE TO BE QUASHED. 5.1 THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) HA S LAID DOWN THE FOLLOWING PRINCIPLES TO BE FOLLOWED IN THE MATT ER OF IMPOSING PENALTY U/S.271(1)(C) OF THE ACT. NOTICE UNDER SECTION 274 59. AS THE PROVISION STANDS, THE PENALTY PROCEEDING S CAN BE INITIATED ON VARIOUS GROUND SET OUT THEREIN. IF THE ORDER PAS SED BY THE AUTHORITY CATEGORICALLY RECORDS A FINDING REGARDING THE EXISTENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN PENALTY PROCEEDINGS IS INITIATED, IN THE NOTICE TO BE ISSUED UNDER SECTION 274, THEY COULD CONVENIENTLY REFER TO THE SAID ORDER WHICH CONTAINS THE SATISFACTION OF THE AUTHORITY WHICH HAS PASSED THE ORDER. HOWEVER, IF THE EXISTENCE OF THE CONDITIONS COULD NOT BE DISCERNED FROM THE S AID ORDER AND IF IT IS A CASE OF RELYING ON DEEMING PROVISION CONTAINED IN EXPLANATION-1 OR IN EXPLANATION-1(B), THEN THOUGH PENALTY PROCEED INGS ARE IN THE NATURE OF CIVIL LIABILITY, IN FACT, IT IS PENAL IN NATURE. IN EITHER EVENT, THE PERSON WHO IS ACCUSED OF THE CONDITIONS MENTION ED IN SECTION 271 SHOULD BE MADE KNOWN ABOUT THE GROUNDS ON WHICH THE Y INTEND IMPOSING PENALTY ON HIM AS THE SECTION 274 MAKES IT CLEAR THAT ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 12 ASSESSEE HAS A RIGHT TO CONTEST SUCH PROCEEDINGS AN D SHOULD HAVE FULL OPPORTUNITY TO MEET THE CASE OF THE DEPARTMENT AND SHOW THAT THE CONDITIONS STIPULATED IN SECTION 271(1)(C) DO NOT E XIST AS SUCH HE IS NOT LIABLE TO PAY PENALTY. THE PRACTICE OF THE DEPA RTMENT SENDING A PRINTED FARM WHERE ALL THE GROUND MENTIONED IN SECT ION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NOT REBUTTING THE INIT IAL PRESUMPTION IS SERIOUS IN NATURE AND HE HAD TO PAY PENALTY FROM 10 0% TO 300% OF THE TAX LIABILITY. AS THE SAID PROVISIONS HAVE TO B E HELD TO BE STRICTLY CONSTRUED, NOTICE ISSUED UNDER SECTION 274 SHOULD S ATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWIS E, PRINCIPLES OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NOTIC E IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPO SED ON THE ASSESSEE. 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, TH AT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. NO DOUBT, THE FACTS OF SOME CASES MAY ATTRACT BOTH THE OFFENCES AND IN SOME CASES THERE MAY BE OV ERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES THE INITIATION OF TH E PENALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE OFFENCES. BUT DRAWING UP PENALTY PROCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSEE GUILTY OF ANOTHER OFFENCE OR FINDING HIM GUILTY FOR EITHER THE ONE OR THE OTHER CANNOT BE SUSTAINED IN LAW. IT IS NEEDLESS TO POINT OUT SATISFACTION OF THE EXISTENCE OF THE GROUNDS MENTIO NED IN SECTION 271(1)(C) WHEN IT IS A SINE QUA NON FOR INITIATION OR PROCEEDINGS, THE PENALTY PROCEEDINGS SHOULD BE CONFINED ONLY TO THOS E GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECIFICALLY STATED SO THAT THE ASSESSEE WOULD HAVE THE OPPORTUNITY TO MEET THOSE GROUNDS. A FTER, HE PLACES HIS VERSION AND TRIES TO SUBSTANTIATE HIS CLAIM, IF AT ALL, PENALTY IS TO BE IMPOSED, IT SHOULD BE IMPOSED ONLY ON THE GROUND S ON WHICH HE IS CALLED UPON TO ANSWER. IT IS NOT OPEN TO THE AUTHOR ITY, AT THE TIME OF IMPOSING PENALTY TO IMPOSE PENALTY ON THE GROUNDS O THER THAN WHAT ASSESSEE WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENALTY PROCEEDINGS MAY BE VALID AND LEGAL, THE FIN AL ORDER IMPOSING PENALTY WOULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAINED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROU ND, THE PENALTY SHOULD ALSO BE IMPOSED ON THE SAME GROU ND. WHERE THE BASIS OF THE INITIATION OF PENALTY PROCEEDINGS IS N OT IDENTICAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, THE IM POSITION OF ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 13 PENALTY IS NOT VALID. THE VALIDITY OF THE ORDER OF PENALTY MUST BE DETERMINED WITH REFERENCE TO THE INFORMATION, FACTS AND MATERIALS IN THE HANDS OF THE AUTHORITY IMPOSING THE PENALTY AT THE TIME THE ORDER WAS PASSED AND FURTHER DISCOVERY OF FACTS SUB SEQUENT TO THE IMPOSITION OF PENALTY CANNOT VALIDATE THE ORDER OF PENALTY WHICH, WHEN PASSED, WAS NOT SUSTAINABLE. 61. THE ASSESSING OFFICER IS EMPOWERED UNDER THE AC T TO INITIATE PENALTY PROCEEDINGS ONCE HE IS SATISFIED IN THE COU RSE OF ANY PROCEEDINGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF TOTAL INCOME UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICULARS OF I NCOME ARE DIFFERENT. THUS THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS TO COME TO THE CONCLUSION THAT WHETHER IS IT A CASE OF CONC EALMENT OF INCOME OR IS IT A CASE OF FURNISHING OF INACCURATE PARTICU LARS. THE APEX COURT IN THE CASE OF ASHOK PAI REPORTED IN 292 ITR 11 AT PAGE 19 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INAC CURATE PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEERING REPORTED IN 1 22 ITR 306 AND THE DELHI HIGH COURT IN THE CASE OF VIRGO MARKE TING REPORTED IN 171 TAXMAN 156, HAS HELD THAT LEVY OF P ENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BEING UNCLEAR PENALTY IS NOT SUSTAINABLE. THEREFORE, WHEN THE ASSESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CON CEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. SIMILAR IS T HE CASE FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ST ANDARD PRO FORMA WITHOUT STRIKING OF THE RELEVANT CLAUSES WILL LEAD TO AN INFERENCE AS TO NON-APPLICATION OF MIND. THE FINAL CONCLUSION OF THE HONBLE COURT WAS AS FO LLOWS:- 63. IN THE LIGHT OF WHAT IS STATED ABOVE, WHAT EME RGES IS AS UNDER: A) PENALTY UNDER SECTION 271(1)(C) IS A CIVIL LIAB ILITY. B) MENS REA IS NOT AN ESSENTIAL ELEMENT FOR IMPOSI NG PENALTY FOR BREACH OF CIVIL OBLIGATIONS OR LIABILITIES. C) WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDI ENT FOR ATTRACTING CIVIL LIABILITY. D) EXISTENCE OF CONDITIONS STIPULATED IN SECTION 2 71(1)(C) IS A SINE QUA NON FOR INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271. ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 14 E) THE EXISTENCE OF SUCH CONDITIONS SHOULD BE DISC ERNIBLE FROM THE ASSESSMENT ORDER OR ORDER OF THE APPELLATE AUTH ORITY OR REVISIONAL AUTHORITY. F) EVEN IF THERE IS NO SPECIFIC FINDING REGARDING THE EXISTENCE OF THE CONDITIONS MENTIONED IN SECTION 271(1)(C), AT L EAST THE FACTS SET OUT IN EXPLANATION 1(A) & (B) IT SHOULD BE DISCERNI BLE FROM THE SAID ORDER WHICH WOULD BY A LEGAL FICTION CONSTITUTE CON CEALMENT BECAUSE OF DEEMING PROVISION. G) EVEN IF THESE CONDITIONS DO NOT EXIST IN THE AS SESSMENT ORDER PASSED, AT LEAST, A DIRECTION TO INITIATE PROCEEDIN GS UNDER SECTION 271(L)(C) IS A SINE QUA NON FOR THE ASSESSMENT OFFI CER TO INITIATE THE PROCEEDINGS BECAUSE OF THE DEEMING PROVISION CONTAI NED IN SECTION 1(B). H) THE SAID DEEMING PROVISIONS ARE NOT APPLICABLE TO THE ORDERS PASSED BY THE COMMISSIONER OF APPEALS AND THE COMMI SSIONER. I) THE IMPOSITION OF PENALTY IS NOT AUTOMATIC. J) IMPOSITION OF PENALTY EVEN IF THE TAX LIABILITY IS ADMITTED IS NOT AUTOMATIC. K) EVEN IF THE ASSESSEE HAS NOT CHALLENGED THE ORD ER OF ASSESSMENT LEVYING TAX AND INTEREST AND HAS PAID TA X AND INTEREST THAT BY ITSELF WOULD NOT BE SUFFICIENT FOR THE AUTHORITI ES EITHER TO INITIATE PENALTY PROCEEDINGS OR IMPOSE PENALTY, UNLESS IT IS DISCERNIBLE FROM THE ASSESSMENT ORDER THAT, IT IS ON ACCOUNT OF SUCH UNEARTHING OR ENQUIRY CONCLUDED BY AUTHORITIES IT HAS RESULTED IN PAYMENT OF SUCH TAX OR SUCH TAX LIABILITY CAME TO BE ADMITTED AND I F NOT IT WOULD HAVE ESCAPED FROM TAX NET AND AS OPINED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. L) ONLY WHEN NO EXPLANATION IS OFFERED OR THE EXPL ANATION OFFERED IS FOUND TO BE FALSE OR WHEN THE ASSESSEE FAILS TO PROVE THAT THE EXPLANATION OFFERED IS NOT BONA FIDE, AN ORDER IMPO SING PENALTY COULD BE PASSED. M) IF THE EXPLANATION OFFERED, EVEN THOUGH NOT SUB STANTIATED BY THE ASSESSEE, BUT IS FOUND TO BE BONA FIDE AND ALL FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL I NCOME HAVE BEEN DISCLOSED BY HIM, NO PENALTY COULD BE IMPOSED. ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 15 N) THE DIRECTION REFERRED TO IN EXPLANATION IB TO SECTION 271 OF THE ACT SHOULD BE CLEAR AND WITHOUT ANY AMBIGUITY. O) IF THE ASSESSING OFFICER HAS NOT RECORDED ANY S ATISFACTION OR HAS NOT ISSUED ANY DIRECTION TO INITIATE PENALTY PR OCEEDINGS, IN APPEAL, IF THE APPELLATE AUTHORITY RECORDS SATISFAC TION, THEN THE PENALTY PROCEEDINGS HAVE TO BE INITIATED BY THE APP ELLATE AUTHORITY AND NOT THE ASSESSING AUTHORITY. P) NOTICE UNDER SECTION 274 OF THE ACT SHOULD SPEC IFICALLY STATE THE GROUNDS MENTIONED IN SECTION 271(1)(C), I.E., W HETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INCORREC T PARTICULARS OF INCOME Q) SENDING PRINTED FORM WHERE ALL THE GROUND MENTI ONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIRE MENT OF LAW. R) THE ASSESSEE SHOULD KNOW THE GROUNDS WHICH HE H AS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLES OF NATURAL JUST ICE IS OFFENDED. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED TO THE ASSESSEE. S) TAKING UP OF PENALTY PROCEEDINGS ON ONE LIMB AN D FINDING THE ASSESSEE GUILTY OF ANOTHER LIMB IS BAD IN LAW. T) THE PENALTY PROCEEDINGS ARE DISTINCT FROM THE A SSESSMENT PROCEEDINGS. THE PROCEEDINGS FOR IMPOSITION OF PENA LTY THOUGH EMANATE FROM PROCEEDINGS OF ASSESSMENT, IT IS INDEP ENDENT AND SEPARATE ASPECT OF THE PROCEEDINGS. U) THE FINDINGS RECORDED IN THE ASSESSMENT PROCEED INGS IN SO FAR AS 'CONCEALMENT OF INCOME' AND 'FURNISHING OF INCOR RECT PARTICULARS' WOULD NOT OPERATE AS RES JUDICATA IN THE PENALTY PR OCEEDINGS. IT IS OPEN TO THE ASSESSEE TO CONTEST THE SAID PROCEEDING S ON MERITS. HOWEVER, THE VALIDITY OF THE ASSESSMENT OR REASSESS MENT IN PURSUANCE OF WHICH PENALTY IS LEVIED, CANNOT BE THE SUBJECT MATTER OF PENALTY PROCEEDINGS. THE ASSESSMENT OR REASSESSMENT CANNOT BE DECLARED A S INVALID IN THE PENALTY PROCEEDINGS. (EMPHASIS SUPPLIED) IT IS CLEAR FROM THE AFORESAID DECISION THAT ON THE FACTS OF THE PRESENT CASE THAT THE SHOW CAUSE NOTICE U/S. 274 OF THE ACT IS DEFECTIVE AS IT DOES NOT SPELL OUT THE GROUNDS ON WHICH THE PENALTY IS SOUGHT TO BE ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 16 IMPOSED. FOLLOWING THE DECISION OF THE HONBLE KARN ATAKA HIGH COURT, WE HOLD THAT THE ORDERS IMPOSING PENALTY IN ALL THE ASSESSMENT YEARS HAVE TO BE HELD AS INVALID AND CONSEQUENTLY P ENALTY IMPOSED IS CANCELLED. FOR THE REASONS GIVEN ABOVE, WE HOLD THAT LEVY OF P ENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED. WE, THEREFORE, CA NCEL THE ORDERS IMPOSING PENALTY ON THE ASSESSEE AND ALLOW THE APPE AL BY THE ASSESSEE. 13. IN THE PRESENT CASE, AS WE NOTED ABOVE, THE AO FAILED TO STRIKE OUT THE IRRELEVANT PORTION IN THE SAID SHOW CAUSE NOTICE, R ESPECTFULLY FOLLOWING THE ORDER ABOVE, WE CANCEL THE PENALTY LEVIED U/S. 271(1) ( C ) OF THE ACT BY THE ASSESSING OFFICER AS CONFIRMED BY THE CIT-(A) FOR BOTH THE AS SESSMENT YEARS UNDER CONSIDERATION. THEREFORE, PRELIMINARY ISSUE AS RAIS ED BY THE ASSESSEE BY WAY OF ADDITIONAL GROUND FOR ASSESSMENT YEAR 2005-06 IS AL LOWED, IN VIEW OF THE SAME THE OTHER GROUNDS RAISED REQUIRES NO ADJUDICATION, THEREFORE, ALL ARE DISMISSED. ITA NO. 922/KOL/2011 A.Y 2006-07 ( BY THE ASSESSEE) 14. IN THIS APPEAL, IN RESPONSE TO NOTICE DT: 12-05 -2008 ISSUED U/S. 153A OF THE ACT, THE ASSESSEE FILED HIS REVISED RETURN OF INCOME ON 11-09-2008 SHOWING TOTAL INCOME OF RS. 1,96,35,280/- AS AGAINST THE TO TAL INCOME OF RS. 1,89,19,800/- AS DECLARED U/S. 139(1) UNDER ORIGINA L RETURN FILED ON 29-11-2006 FOR A.Y 2006-07. THE AO IMPOSED PENALTY OF RS.2,29, 779/- FOR THE ASSESSMENT YEAR 2006-07. IN VIEW OF THE DISCUSSION IN ABOVE PA RAS, WE CANCEL THE PENALTY LEVIED U/S. 271(1) ( C) OF THE ACT BY THE ASSESSING OFFICER AS CONFIRMED BY THE CIT-(A) FOR A.Y 2006-07. ITA NOS. 921 & 922/KOL/2011-C-JM M/S. DHANSAR ENGG.P.LTD 17 15. IN THE RESULT, THE APPEALS OF ASSESSEE ARE ALL OWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 10/06 / 2016 COPY OF THE ORDER FORWARDED TO: 1.. THE APPELLANT/ASSESSEE : M/S. DHANSAR ENGINEER ING PVT. LTD, NEAR DHANSAR TEMPLE, DHANSAR, DHANBAD 2 THE RESPONDENT/DEPARTMENT- THEASSTT. COMMISSIONE R OF INCOME-TAX, CC-VII, 18 RABINDRA SARANI, KOLKATA-700001. 3 4.. /THE CIT, /THE CIT(A) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR ** PRADIP SPS SD/- P.M. JAGTAP ACCOUNTANT MEMBER SD/- S.S.VISWANETHRA RAVI J JUDICIAL MEMBER DATE 10 /06 /2016