JAYESH KISHORE JHAVERI, MUMBAI V. JT CIT 19 (2), MUMBAI

ITA 97/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7826 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 1997-1998
• Appeal Filed On: 03-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice
• Section: 271(1)(c); 143(3); 143(1); 274; 73; 13; 147; 27

Judgement Text

ITA NOS. 97,98 & 101/MUM/2020 A.YS. 1997 - 98, 2006 - 07 & 2007 - 08 JAYESH KISHORE JHAVERI VS. JT. COMMISSIONER OF INCOME TAX - 19(2) 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI S.RIFAUR RAHMAN (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) ITA NOS.97, 98 & 101/MUM/2020 (ASSESSMENT YEARS: 1997 - 98, 2006 - 07 & 2007 - 08) JAYESH KISHORE JHAVERI 59 - B, FIONICA BUILDING, 5 TH FLOOR, WALKESHWAR ROAD, MUMBAI 400 006 VS. JT. CIT - 19(2), 2 ND FLOOR, MATRU MANDIR INCOME TAX OFFICE TARDEO, MUMBAI 400 007 PAN NO. AABPJ8798D (ASSESSEE) (REVENUE) ASSESSEE BY : SHRI VIJAY MEHTA, A.R REVENUE BY : SHRI USHA GAIKWAD, D.R DATE OF HEARING : 26/08/2021 DATE OF PRONOUNCEM ENT : 01 /09 /2021 ORDER PER BENCH : THE CAPTIONED APPEAL S FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS PASSED BY THE CIT(A) - 29, MUMBAI, DATED 28.10.2019 FOR A.Y. 1997 - 98, A.Y. 2006 - 07 AND A.Y. 2007 - 08. AS A COMMON ISSUE IS INVOLVED IN THE AFORESAID APPEALS, THEREFORE, THE SAME ARE BEING TAKEN UP AND DISPOSED OFF T OGETHER BY WAY OF A CONSOLIDATED ORDER. WE SHALL FIRST TAKE UP THE APPEAL OF THE ASSESSEE FOR A.Y. 1997 - 98 IN ITA NO. 97/MUM/2020. THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOW ING GROUNDS BEFORE US: 1. THE LEARNED JT. COMMISSIONER OF INCOME TAX ERRED IN LEVYING PENALTY PROCEEDINGS U/S 271(1)(C). ITA NOS. 97,98 & 101/MUM/2020 A.YS. 1997 - 98, 2006 - 07 & 2007 - 08 JAYESH KISHORE JHAVERI VS. JT. COMMISSIONER OF INCOME TAX - 19(2) 2 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUND OF APPEAL, AT ANY TIME BEFORE OR AT, THE TIME OF HEARING , OF THE APPEAL, SO AS TO ENABLE TO DECIDE THE AP PEALS ACCORDING TO LAW. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING. 2. BRIEFLY STATED, THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR A.Y. 1997 - 98 ON 01.06.1998, DECLARING A TOTAL INCOME OF RS.20,140/ - . THE RETURN OF INCOME WAS INITIALLY PROCESSED AS SUCH U/S 143(1) OF THE ACT. SUBSEQUENTLY, A BASE NOTE WAS RECEIVED BY THE GOVERNMENT OF INDIA FROM THE FRENCH GOVERNMENT UNDER THE INDIAN - FRANCE DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA), WHEREIN IT WAS INTIMATED THAT THE ASSESSEE WAS ONE OF THE INDIAN NATIONAL WHO WAS HOLDING A FOREIGN BANK ACCOUNT WITH HSBC BANK, GENEVA, SWITZERLAND. BACKED BY THE AFORES AID INFORMATION RECEIVED BY THE A.O THE CASE OF THE ASSESSEE WAS REOPENED U/S 147 OF THE ACT . AFTER NECESSARY DELIBERATIONS THE A.O AFTER INTER ALIA MAKING AN ADDITION OF THE INVESTMENT OF RS.27,50,000/ - EQUIVALENT TO CHF 1,00,000/ - (1 CHF = 27.50 INR), TH EREIN , VIDE HIS ORDER PASSED U/S 143(3) R.W.S 147 OF THE ACT, DATED 23.01.2015 ASSESSED THE INCOME OF THE ASSESSEE AT RS.27,70,134/ - . AT THE TIME OF CULMINATING THE ASSESSMENT PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTIC ULARS OF INCOME AND CONCEALMENT OF INCOME BY THE ASSESSEE W ERE INITIATED BY THE A.O AND A SHOW CAUSE NOTICE (SCN) UNDER SEC. 274 R.W.S 271 OF THE ACT, DATED 23.01.2015 WAS ISSUED TO THE ASSESSEE. 3. AFTER CULMINATION OF THE ASSESSMENT PROCEEDINGS, THE A .O BACKED BY THE SCN, DATED 23.01.2015 THEREIN CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY MAY NOT BE IMPOSED ON HIM U/S 271(1)(C) OF THE ACT . IN THE ABSENCE OF ANY SATISFACTORY SUBMISSION BY THE ASSESSEE THAT NO PENALTY UNDER THE AFORESAID STATUTORY PROVISION WAS CALLED IN HIS HANDS, THE A.O , VIDE HIS ORDER DATED 27.07.2015 IMPOSED PENALTY U/S 271(1)(C) OF RS.10,81,100/ - , THEREIN ALLEGING A ITA NOS. 97,98 & 101/MUM/2020 A.YS. 1997 - 98, 2006 - 07 & 2007 - 08 JAYESH KISHORE JHAVERI VS. JT. COMMISSIONER OF INCOME TAX - 19(2) 3 CONSCIOUS AND DELIBERATE ATTEMPT ON THE P ART OF THE ASSESSEE TO C ONCEAL HIS INCOME. 4. AGGRIEVED, THE ASSESSEE ASSAILED THE ORDER PASSED BY THE A.O U/S 271(1)(C) OF THE ACT, DATED 27.07.2015 BEFORE THE CIT(A). HOWEVER, THE CIT(A) NOT FINDING FAVOUR WITH THE CONTENTIONS THAT WERE ADVANCED BY THE ASSESSEE DISMISSED THE AP PEAL. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER PASSED BY THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE AT THE VERY OUTSET OF THE HEARING OF THE APPEAL SUBMITTED THAT AS THE A.O HAD FAILED TO STRIKE OFF THE IRRELEVANT DEFAULT IN THE SHOW CAUSE NOTICE (HEREINAFTER REFERRED TO AS SCN ) ISSUED U/S 274 R.W.S 271 OF THE ACT, DATED 23.01.2015, THEREFORE, THE PENALTY WHICH WAS THEREAFTER IMPOSED BY HIM U/S 271(1)(C) OF THE ACT CA NNOT BE SUSTAINED AND IS LIABLE TO BE VACATED. IN ORDER TO DRIVE HOME HIS AFORESAID CONTENTION THE LD. A.R HAD DRAWN OUR ATTENTION TO THE COPY OF THE SCN , DATED 25.01.2015 THAT WAS PLACED ON OUR RECORD. IN ORDER TO BUTTRESS HIS AFORESAID CLAIM THAT THE F AILURE ON THE PART OF THE A.O TO STRIKE OFF THE IRRELEVANT DEFAULT IN THE SCN ON THE BASIS OF WHICH PENALTY U/S 271(1)(C ) IS IMPOSED WOULD VITIATE THE PENALTY PROCEEDINGS , THE LD. A.R HAD PLACED RELIANCE ON THE RECENT FULL BENCH JUDGMENT OF THE HONBLE HIGH COUR T OF BOMBAY IN THE CASE OF MOHD . FARHAN A. SHAIKH VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, BELGAUM (2021) 125 TAXMAN.COM 253 (BOM) (COPY PLACED ON RECORD). OUR ATTENTION WAS DRAWN BY THE LD. A.R TO THE A FORESAID JUDICIAL PRONOUNCEMEN T WHEREIN IT WAS HELD BY THE HONBLE HIGH COURT THAT WHERE THE ASSESSMENT ORDER THOUGH CLEARLY RECORDED SATISFACTION FOR IMPOSING PENALTY ON ONE OR OTHER, OR BOTH GROUNDS MENTIONED IN SEC. 271(1)(C) OF THE ACT, A MERE DEFECT IN THE SHOW CAUSE NOTICE ON ACC OUNT OF THE FAILURE ON THE PART OF THE A.O IN NOT STRIKING OFF THE IRRELEVANT MATTER WOULD VITIATE THE PENALTY PROCEEDINGS. ACC ORDINGLY, IN THE BACKDROP OF HIS AFORESAID CONTENTIONS , IT WAS SUBMITTED BY THE ITA NOS. 97,98 & 101/MUM/2020 A.YS. 1997 - 98, 2006 - 07 & 2007 - 08 JAYESH KISHORE JHAVERI VS. JT. COMMISSIONER OF INCOME TAX - 19(2) 4 LD. A.R THAT AS THE A.O IN THE PRESENT CASE HAD I NVALIDLY ASSUMED JURISDICTION AND IMPOSED PE NALTY U/S 271(1)(C) OF THE ACT, THEREFORE, THE SAME COULD NOT BE SUSTAINED AND WAS LIABLE TO BE VACATED. 6. PER CONTRA, THE LD. DEPA RTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED UPON THE ORDERS PASSED BY THE LOWER AUTHORITIES. IT WAS SUBMITTED BY THE LD. D.R THAT AS THE ASSESSEE WAS AFFORDED SUFFICIENT OPPORTUNITY IN THE COURSE OF THE PENALTY PROCEEDINGS, THEREFORE IT WAS INCORRECT ON HIS PART TO CLAIM THAT NO OPPORTUNITY OF BEING HEARD WAS AFFORDED TO HIM IN THE COURSE OF THE PENALTY PROCEEDINGS. 7. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE FOR BOTH THE PARTIES , PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD, AS WELL AS CONSIDERED THE JUDICIAL PRONOUNCEMENTS THAT HAVE B EEN PRESSED INTO SERVICE BY THE LD. A.R TO DRIVE HOME HIS AFORESAID CONTENTION. ADMITTEDLY, ON A PERUSAL OF THE SCN, DATED 23.01.2015, IT STANDS REVEALED TH AT THE A.O HAD FAILED TO STRIKE - OFF THE IRRELEVANT DEFAULT WHILE CALLING UPON THE A SSESSEE TO EXPL AIN AS TO WHY PENALTY U/S 271(1)(C) MAY NOT BE IMPOSED ON HIM. INSOFAR THE VALIDITY OF THE JURISDICTION ASSUMED BY THE A.O IS CONCERNED, THE SAME, AS OBSERVED BY US HEREINABOVE HAVE BEEN A SSAILED BEFORE US ON THE GROUND THAT AS THE IRRELEVANT DEFAULT IN THE SCN, DATED 23.01.2015 WAS NOT STRUCK OFF BY THE A.O, THEREFORE, THE ASSESSEE WAS NOT VALIDLY PUT TO NOTICE AS REGARDS THE DEFAULT FOR WHICH HE WAS CALLED UPON TO EXPLAIN AS TO WHY PENALTY MAY NOT BE IMPOSED ON HIM U /S 271(1)(C) OF THE ACT. 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND ARE PERSUADED TO SUBSCRIBE TO THE CLAIM OF THE ASSESSEE THAT THE A.O HAD IN THE AFORESAID SCN, DATED 23.01.2015 FAILED TO POINT OUT THE DEFAULT FOR WHICH THE PENALTY WAS SOUGHT TO BE IMPOSED ON THE ASSESSEE . IN OUR CONSIDERED VIEW, AS BOTH OF THE TWO DEFAULTS ENVISAGED IN SEC. 271(1)(C) I.E CONCEALMENT OF INCOME ITA NOS. 97,98 & 101/MUM/2020 A.YS. 1997 - 98, 2006 - 07 & 2007 - 08 JAYESH KISHORE JHAVERI VS. JT. COMMISSIONER OF INCOME TAX - 19(2) 5 AND FURNISHING OF INACCURATE PARTICULARS OF INCOME ARE SEPARATE AND DISTINCT DEFAULTS WHICH OPE RATE IN THEIR INDEPENDENT AND EXCLUSIVE FIELDS, THEREFORE, IT WAS OBLIGATORY ON THE PART OF THE A.O TO HAVE CLEARLY PUT THE ASSESSEE TO NOTICE AS REGARDS THE DEFAULT FOR WHICH HE WAS CALLED UPON TO EXPLAIN AS TO WHY PENALTY UNDER SEC. 27 1(1)(C) MAY NOT BE IMPOSED ON HIM . AS OBSERVED BY US HEREINABOVE, A PERUSAL OF THE SHOW CAUSE NOTICE ISSUED IN THE PRESENT CASE BY THE A.O UNDER SEC. 274 R.W. SEC. 271(1)(C), DATED 23.01.2015 CLEARLY REVEALS THAT THERE HAS BEEN NO APPLICATION OF MIND ON THE PART OF THE A.O WHILE ISSUING THE SAME. WE ARE OF A STRONG CONVICTION THAT THE VERY PURPOSE OF AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE MANDATE OF SEC. 274( 1) WOULD NOT ONLY BE FRUSTRATED BUT WOULD BE RENDERED AS REDUNDANT AND PURPOSEL ESS IF , THE ASSESSEE IS NOT CONVEYED IN CLEAR TERMS BY THE A.O THE SPECIFIC DEFAULT FOR WHICH PENALTY UNDER THE SAID STATUTORY PROVISION IS SOUGHT TO BE IMPOSED. IN OUR CONSIDERED VIEW THE INDISPENSABLE REQUIREMENT ON THE PART OF THE A.O TO PUT THE ASSESSE E TO NOTICE AS REGARDS THE SPECIFIC CHARGE CONTEMPLATED UNDER THE AFORESAID STATUTORY PROVISION VIZ. CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IS NOT MERELY AN IDLE FORMALITY BUT IS A STATUTORY OBLIGATION CAST UPON HIM, WH ICH WE ARE AFRAID HAD NOT BEEN DISCHARGED IN THE PRESENT CASE AS PER THE MANDATE OF LAW. 9 . WE WOULD NOW TEST THE VALIDITY OF THE AFORESAID SHOW CAUSE NOTICE AND THE JURISDICTION EMERGING THEREFROM IN THE BACKDROP OF THE JUDICIAL PRONOUNCEMENTS ON THE ISSUE UNDER CONSIDERATION. ADMITTEDLY, THE A.O IS VESTED WITH THE POWERS TO LEVY PENALTY UNDER SEC. 271(1)(C) OF THE ACT IF , IN THE COURSE OF THE PROCEEDINGS HE IS SATISFIED THAT THE ASSESSEE HAD EITHE R CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF HIS INCOME. IN OUR CONSIDERED VIEW, AS PENALTY PROCEEDINGS ARE IN THE NATURE OF QUASI CRIMINAL PROCEEDINGS, THEREFORE, THE ASSESSEE AS A MATTER OF A STATUTORY RIGHT IS SUPPOSED TO KNOW THE E XACT CHARGE FOR WHICH HE IS BEING CALLED UPON TO EXPLAIN THAT AS TO WHY THE SAME ITA NOS. 97,98 & 101/MUM/2020 A.YS. 1997 - 98, 2006 - 07 & 2007 - 08 JAYESH KISHORE JHAVERI VS. JT. COMMISSIONER OF INCOME TAX - 19(2) 6 MAY NOT BE IMPOSED ON HIM . THE NON SPECIFYING OF THE CHARGE IN THE SHOW CAUSE NOTICE NOT ONLY REFLECTS THE NON - APPLICATION OF MIND BY THE A.O, BUT THE SAME SERIOUSLY DEFEATS THE VERY PURPOSE OF GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS ENVISAGED UNDER SEC. 274(1) OF THE I.T ACT. WE FIND THAT THE FINE DISTINCTION BETWEEN THE SAID TWO DEFAULTS CONTEMPLATED IN SEC. 271(1)(C) VIZ. CONCEALMENT OF INCOME A ND FURNISHING OF INACCURATE PARTICULARS OF INCOME HAD BEEN APPRECIATED AT LENGTH BY THE HONBLE SUPREME COURT IN ITS JUDGMENTS PASSED IN THE CASE OF DILIP & SHROFF VS. JT. CIT (2007) 210 CTR (SC) 228 AND T. ASHOK PAI VS. CIT (2007) 292 ITR 11 (SC). THE H ONBLE APEX COURT IN ITS AFORESAID JUDGMENTS HAD OBSERVED THAT THE TWO EXPRESSIONS, VIZ. CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME HAVE DIFFERENT CONNOTATION. THE HONBLE APEX COURT BEING OF THE VIEW THAT T HE NON - STRIKING OFF THE IRRELEVANT LIMB IN THE NOTICE CLEARLY REVEALS A NON - APPLICATION OF MIND BY THE A.O, HAD OBSERVED AS UNDER: - 83. IT IS OF SOME SIGNIFICANCE THAT IN THE STANDARD PROFORMA USED BY THE ASSESSING OFFICER IN ISSUING A NOTICE DESPITE THE FACT THAT THE SAME POSTULATES THAT INAPPROPRIATE WORDS AND PARAGRAPHS WERE TO BE DELETED, BUT THE SAME HAD NOT BEEN DONE. THUS, THE ASSESSING OFFICER HIMSELF WAS NOT SURE AS TO WHETHER HE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED HIS INCO ME OR HE HAS FURNISHED INACCURATE PARTICULARS. EVEN BEFORE US, THE LEARNED ADDITIONAL SOLICITOR GENERAL WHILE PLACING RELIANCE ON THE ORDER OF ASSESSMENT LAID EMPHASIS THAT HE HAD DEALT WITH BOTH THE SITUATIONS. 84. THE IMPUGNED ORDER, THEREFORE, SUFFERS FROM NONAPPLICATION OF MIND. IT WAS ALSO BOUND TO COMPLY WITH THE PRINCIPLES OF NATURAL JUSTICE [SEE MALABAR INDUSTRIAL CO. LTD. VS. CIT (2000) 2 SCC 718]. WE ARE OF THE CONSIDERED VIEW, THAT NOW WHEN AS PER THE SETTLED POSITION OF LAW THE TWO DEFAULTS VIZ. CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME ARE SEPARATE AND DISTINCT DEFAULTS, THEREFORE, IN CASE THE A.O SOUGHT TO HAVE PROCEEDED AGAINST THE ASSESSEE FOR EITHER OF THE SAID DEFAULTS, THEN , IT WAS INCUMBENT ON HIS P ART TO HAVE CLEARLY SPECIFIED HIS SAID INTENTION IN THE SHOW CAUSE NOTICE, WHICH WE FIND HE HAD FAILED TO DO IN THE CASE BEFORE US. THE AFORESAID FAILURE ON THE PART OF THE ASSESSEE CANNOT BE DUBBED AS ITA NOS. 97,98 & 101/MUM/2020 A.YS. 1997 - 98, 2006 - 07 & 2007 - 08 JAYESH KISHORE JHAVERI VS. JT. COMMISSIONER OF INCOME TAX - 19(2) 7 MERELY A TECHNICAL DEFAULT AS THE SAME HAS CLEARLY D IVESTED THE ASSESSEE OF HIS STATUTORY RIGHT OF AN OPPORTUNITY OF BEING HEARD AND DEFEND HIS CASE. 10 . WE FIND THAT THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS (73 TAXMANN.COM 241)(KAR) FOLLOWING ITS EARLIER ORDER IN T HE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACT ORY (2013) 359 ITR 565 (KAR) HAD HELD , THAT WHERE THE NOTICE ISSUED BY THE A.O UNDER SEC. 274 R.W SEC. 271(1)(C) DOES NOT SPECIFY THE LIMB OF SEC. 271(1)(C) FOR WHICH THE PENALTY PROCEEDINGS HAD BEEN INITIATED, I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS, THE SAME HAS TO BE HELD AS BAD IN LAW. THE SPECIAL LEAVE PETITION (FOR SHORT SLP) FILED BY THE REVENUE AGAINST THE AFORESAID ORDER OF THE HONBLE HIGH COURT OF KARNATAKA HAD BEEN DISMISSED BY THE HONBLE SUPREME COURT IN CIT VS. SSAS EMERALD MEADOWS (2016) 73 TAXMANN.COM 248 (SC). APART FROM T HAT , WE FIND THAT A SIMILAR VIEW HAD BEEN TAKEN BY THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. SAMSON PERINCHERY (ITA NO. 1154 OF 2014; DT. 05.01.2017)(BOM). 11 . WE FIND THAT THE INDISPENSABLE OBLIGATION ON THE PART OF THE A.O TO CLEARLY PUT THE ASSESSEE TO NOTICE OF THE CHARGE UNDER THE AFORESAID STATUTORY PROVISION VIZ. SEC. 271(1)(C) , AS POINTED OUT BY THE LD. A.R , HAD BEEN DELIBERATED AT LENGTH BY A FULL BENCH OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF MOHD. FARHAN A. SHAIKH VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, BELGAUM (2021) 125 TAXMAN.COM 253 (BOM). IN ITS AFORESAID ORDER, WE FIND THAT THE HONBLE HIGH COURT HAD AFTER EXHAUSTIVELY CONSIDERING THE HOST OF JUDICIAL PRONOUNCEMENTS QUA THE ISSUE IN QUESTION I.E VALI DITY OF PENALTY IMPOSED U/S 271(1)(C) DE - HORS STRIKING OFF THE IRRELEVANT DEFAULT IN THE SCN, HAD OBSERVED , THAT THE SAID FAILURE DESPITE A CLEAR RECORDING OF SATISFACTION FOR IMPOSING THE PENALTY ON ONE OR OTHER, OR BOTH GROUNDS MENTIONED IN SEC. 271(1)(C ) IN THE ASSESSMENT ORDER, WOULD , HOWEVER, ON ACCOUNT OF THE AFORE SAID DEFECT VITIATE THE PENALTY PROCEEDINGS. IN THE BACKDROP OF THE AFORESAID SETTLED POSITION OF LAW, AS IN THE ITA NOS. 97,98 & 101/MUM/2020 A.YS. 1997 - 98, 2006 - 07 & 2007 - 08 JAYESH KISHORE JHAVERI VS. JT. COMMISSIONER OF INCOME TAX - 19(2) 8 CASE OF THE PRESENT ASSESSEE BEFORE US , IT IS A MATTER OF AN ADMITTED FACT THAT THE A.O HAD FAILED TO STRIKE OFF THE IRRELEVANT DEFAULT IN THE BODY OF THE SCN, DATED 23.01.2015, THEREFORE, THE PENALTY THEREAFTER IMPOSED BY HIM U/S 271(1)(C) OF THE ACT, VIDE HIS ORDER DATED 27.07.2015 CANNOT B E SUSTAINED AND IS LIABLE TO BE STRUCK DOWN. THE G ROUND OF APPEAL NO. 1 IS ALLOWED. 12 . THE G ROUND OF APPEAL NO. 2 BEING GENERAL AS NOT PRESSED. 13 . RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ITA NOS. 98 & 101/MUM/2020 A.Y.2006 - 07 & 2007 - 08 1 4 . AS THE FACTS AND ISSUE INVOLVED IN THE PRESENT APPEAL S REMAINS THE SAME AS WERE THERE BEFORE US IN THE APPEAL OF THE ASSESSEE FOR A.Y. 1997 - 98 IN ITA NO.97/MUM/2020, THEREFORE , OUR ORDER THEREIN PASSED SHALL APPLY MUTATIS MUTANDI S FOR THE PURPOSE OF DISPOSAL OF THE CAPTIONED APPEALS. ACCORDINGLY, ON THE SAME TERMS THE AFOREMENTIONED APPEALS FILED BY THE ASSESSEE FOR A.Y. 2006 - 07 IN ITA NO.98/MUM/2020 AND A.Y.2007 - 08 IN ITA NO.101/MUM/2020 ARE ALLOWED . 15 . RESULTANTLY, THE APP EALS FILED BY THE ASSESSEE IN ITA NOS. 97, 98 AND 101/MUM/2020 ARE ALLOWED . ORDER PRO NOUNCED IN THE OPEN COURT ON 01 .0 9 .202 1 SD/ - SD/ - (S. RIFAUR RAHMAN) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 01 .0 9 .2021 * PS: ROHIT ITA NOS. 97,98 & 101/MUM/2020 A.YS. 1997 - 98, 2006 - 07 & 2007 - 08 JAYESH KISHORE JHAVERI VS. JT. COMMISSIONER OF INCOME TAX - 19(2) 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI