The Assistant Commissioner of Income Tax, Central Circle, Panaji., Panaji V. M/s Timblo Private Limited., Margao

ITSSA 15/PAN/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3923 (ITAT-PANAJI)
• Duration Of Justice: 4 year(s) 3 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 07-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRA BHAT JHA
• Assessee Lawyers: V CHANDRASEKHAR
• Keywords: Loose papers; Opportunity of being heard; Principle of natural justice; Question of law; Initiation of penalty proceedings; Set aside
• Section: 271(1)(c); 143(3); 142(1); 133A; 153A; 250; 274; 143(2); 207; 73; 13; 22; 15; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI, BENCH PANAJI , , BEFORE SHRI LALIET KUMAR, JM AND DR. MITHA LAL MEENA, AM IT (SS) A NO S . 13 TO 15 /PA N/201 7 (AY: 20 07 - 20 08 , 2008 - 09 & 2009 - 2010 ) ACIT, CENTRAL CIRCLE, PANAJI GOA VS M/S TIMBLO PVT. LTD., KADAR MANZIL, NEAR HARI MANDIR, MARGAO, GOA PAN : AABCT 1944 N ( / APPELLANT ) .. ( / RESPONDENT ) AND CROSS OBJECTION NOS.22 TO 24/PAN /2017 (AY: 2007 - 2008, 2008 - 09 & 2009 - 2010) (ARISING OUT OF IT(SS)A NOS.13 TO 15/PAN/2017) M/S TIMBLO PVT. LTD., KADAR MANZIL, NEAR HARI MANDIR, MARGAO, GOA PAN : AABCT 1944 N VS ACIT, CENTRAL CIRCLE, PANAJI GOA ( / APPELLANT ) .. ( / RE SPONDENT ) /REVENUE BY : SHRI PRABHAT JHA, CIT DR /ASSESSEE BY : SHRI V. CHANDRASEKHAR, ADV. / DATE OF HEARING : 05 /1 0 /202 1 / DATE OF PRONOUNCEMENT : 07 /10 /202 1 / O R D E R PER BENCH : TH ESE ARE THE APPEALS FILED BY THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE ARISING OUT OF THE ORDER PASSED BY THE CIT(A), WHEREBY THE CIT(A) HAD DELETED THE PENALTY IMPOSED BY THE ASSESSING OFFICER. 2. SINCE THE ISSUE INVOLVED IN ALL THE APPEALS OF THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE ARE SIMILAR, EXCEPT DIFFERENT IN FIGURES, THEREFORE, ALL THE APPEALS WERE HEARD ALTOGETHER AND DECIDED BY THIS CONSOLIDATED ORDER. FIRST WE SHALL TAKE UP THE APPEALS FILED BY THE REVENU E IN IT(SS)A NOS.13 TO 15/PAN/2017 FOR THE ASSESSMENT YEARS 2007 - 2008 TO 2009 - 2010. FOR THE SAKE OF CONVENIENCE, WE SHALL TAKE INTO IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 2 CONSIDERATION THE FACTS AND GROUNDS MENTIONED IN IT(SS)A 13/PAN/2017, WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : - 1. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C ) OF THE I.T. ACT, FOR FURNISHING INACCURATE PARTICULARS OF INCOME? 2. WHETHER ON FACTS AND IN CIRCUMSTANC ES OF THE CASE, THE LD. CIT(A) ERRED IN NOT CONSIDERING THE DECISION OF THE HON' BLE ITAT, BENGALURU BENCH IN TS - 5873 - ITAT - 2017 IN THE CASE OF M/S JAYSONS INFRASTRUCTURE INDIA PVT. LTD WHEREIN IT HAS BEEN HELD THAT ONCE THE REASON FOR LEVYING PENALTY U/S 2 71(1)(C) IS MENTIONED IN THE ASSESSMENT ORDER, MERE MENTION IN THE NOTICE FOR CONCEALING THE PARTICULARS OF INCOME' OR FURNISHED INACCURATE PARTICULARS OF INCOME' WOULD NOT CAUSE PREJUDICE TO THE ASSESSEE? 3. WHETHER ON FACTS AND IN CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT CONSIDERING THE DECISION OF THE HON'BLE ITAT, MUMBAI BENCH IN TS - 5465 - ITAT - 2017 IN THE CASE OF SHRI. MAHESH M. GANDHI WHEREIN IT HAS BEEN HELD THAT THE ASSESSING OFFICER HAD DULY RECORDED WELL - REASONED SATISFACTION BEFOR E INVOKING PENALTY U/S 271(1)(C ) IN THE ASSESSMENT ORDER, EVIDENCING APPLICATION OF MIND BY THE ASSESSING OFFICER? 4. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THERE WAS PROPER RECORDING O F REASON FOR INITIATION OF PENALTY U/S 271(1)(C ) IN THE BODY OF THE ASSESSMENT ORDER? 5. FOR THE ABOVE GROUNDS AND ANY ADDITIONAL GROUNDS THAT MAY BE AGITATED DURING THE COURSE OF THE HEARING IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) - 2, PANAJI MAY BE QUASHED AND THAT OF THE AO RESTORED. 3 . LD. D R, AT THE OUTSET, DREW OUR ATTENTION TO THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER WHEREIN THE ASSESSING OFFICER AT PAGE 8 & 9 HAS RECORDED AS UNDER : - DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE WAS CONFRONTED ON THE ABOVE ISSUES. THE ASSESSEE ADMITTED THE UNDISCLOSED INCOME HAS NOT BEEN OFFERED TO TAX IN THE ORIGINAL RETURN OF INCOME FILED U/S.139 AND STATED THAT THE ASSESSEE COMPANY HAS FILED THE RETURN IN RESPONSE TO NOTICE U/S.153A AND OFFERED THE FOLLOWING FOR TAXATION ON THIS ACCOUNT. ORE PRICE DIFFERENCE OFFERED RS.7,41,28,938 INTEREST RECEIVED RS.13,74,520 EXCHANGE DIFFERENCE ( - ) RS.39,68,310 RS.7,15,35,139 =========== IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 3 ACCORDINGLY, THE ABOVE INCOME WAS BROUGHT TO TAX IN THE ASSESSMENT ORDER U/S.153A R.W.S.143(3) DT.31.12.2012. FROM THE ABOVE, IT IS SEEN THAT ONLY AFTER CONDUCTING A SURVEY U/S.133A WHICH WAS LATER CONVERTED INTO SEARCH & SEIZURE PROCEEDINGS U/S.132, THE ASSESSEE COMPANY ADMITTED AN AMOUNT OF RS.7,15,35,139 B EING UNDISCLOSED SALE CONSIDERATION IN RESPECT OF THE ABOVE TRANSACTIONS FOR A.Y.2007 - 2008. THUS, FROM THE ABOVE IT IS SEEN THAT TILL THE TIME OF SURVEY/SEARCH PROCEEDINGS D.21.04.2010, THE ASSESSEE HAS NOT DISCLOSED THE ABOVE STATED SALE PROCEEDS AS PER A DDENDUM TO CONTRACT AND TWO BANK ACCOUNTS AND INCOME CREDITED THEREIN TO THE DEPARTMENT IN THE RETURNS OF INCOME FILED BY THE COMPANY AS WELL AS THE DIRECTORS. AT THE TIME OF SURVEY/SEARCH, THE ASSESSEE COMPANY HAD FILED ITS RETURNS OF INCOME UPTO A.Y.09 - 1 0 & IT HAS BEEN NOTICED THAT NO SUCH SALE PROCEEDS AS PER ADDENDUM TO CONTRACT AND THE SAID BANK ACCOUNTS HAVE BEEN DISCLOSED TO THE DEPARTMENT. IN THIS CASE, THE ASSESSEE E - FILED ITS RETURN OF INCOME U/S. 139 ON 07.11.2007 DECLARING TOTAL INCOME OF RS.46, 44,65,334/ - AND INCOME U/S.115JB OF RS.44,75,71,723. THE ASSESSEE'S ACCOUNTS WERE AUDITED AND AUDIT REPORT IN FORM NO.3CA DT.10.10.2007 DT. 10.10.7007 WAS FILED BY THE ASSESSEE WITH THE DEPARTMENT. EVEN AFTER THIS, THE ASSESSEE HAS NOT DISCLOSED THE REMITT ANCES RECEIVED BY IT IN THE ABOVE STATED TWO BANK ACCOUNTS TO THE DEPARTMENT. AFTER SEARCH DT. 21.04.2010 , THE A SSESS E E HAS RETURNED TOTAL INCOME AT RS.53,65,03,920/ - BY FILING RETURN OF INCOME ON 06.09.2010. THUS THE ASSESSEE HAS DISCLOSED ADDITIONAL INTER NE 01 RS.7,20,38,58 6/ - ONLY AFTER THE SEARCH DTD. 21.04.2010. THUS, I T IS SEEN THAT THE ASSESSEE HAS KNOWINGLY AND DELIBERATELY CONCEALED THE INCOME. FURTHER, IT IS NOTED THAT IN THIS CASE SEARCH & SEIZURE ACTION WAS CONDUCTED ON 15.11.2006, AND AGAIN O N 21.04.2010, WHICH SHOWS THAT THE ASSESSEE I S A HABITUAL DEFAULTER AND EVADED TAXES AGAIN EVEN AFTER SEARCH S EIZURE ACTION CONDUCTED ON 15.11.2006. 3 .1 THEREAFTER HE DREW OUR ATTENTION TO PAGE 11 OF THE PENALTY ORDER WHICH READS AS UNDER : - IN VIEW OF T HE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE AND ASSESSEES HABITUAL ACT OF EVADING OF TAXES, I CONSIDER THIS IS A FIT CASE TO LEVY PENALTY U/S.271(1)(C). THE MINIMUM & MAXIMUM PENALTY LEVIABLE U/S.271(1)(C) IS 100% AND 300% RESPECTIVELY OF TH E AMOUNT OF TAX SOUGHT TO BE EVADED & WORKS OUT TO RS.2,40,78,728/ - AND RS.7,22,36,184/ - RESPECTIVELY. CONSIDERING THE FACTS OF THE CASE AS DISCUSSED ABOVE, I CONSIDER THIS IS A FIT CASE OF LEVY OF MAXIMUM PENALTY @300% OF TAX EVADED, WHICH IS RS.7,22,36,1 84/ - AND HEREBY LEVY PENALTY U/S.271(1)(C) OF RS.7,22,36,184/ - (RUPEES SEVEN CRORE TWENTY TWO LAKHS THIRTY SIX THOUSAND ONE HUNDRED EIGHTY FOUR ONLY.) IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 4 3 .2 IT WAS THE CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT THE ASSESSEE HAS OF FERED THE INCOME ONLY PURSUANT TO THE S EARCH CONDUCTED BY THE DEPARTMENT , AS THIS INCOME WAS NOT OFFERED IN THE ORIGINAL RETURN OF INCOME AND THEREAFTER THE PENALTY WAS RIGHTLY IMPOSED. HE RELIED ON THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT I N THE CASE OF RAJESH CHAWLA VS. CIT, 22 ND MAY, 2006, REPORTED IN 154 TAXMAN 364 AND ALSO ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA (P) LTD. VS. CIT (2014) 1 SCC 674 AND ITA NO. 274/AGRA/2018 M/S. FAIRYLAND HOTEL & RESORTS PVT. L TD. IT WAS THE CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE THAT THE DELETION OF PENALTY BY THE LD. CIT(A) AS MENTIONED IN THE PARAGRAPH 3.15, 3.16 & 3.17 WAS BASED ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON A ND GINNING FACTORY 35 TAXMANN.COM 250 FOR NON - SCORING IN THE SHOW CAUSE NOTICE ISSUED U/S.274 OF THE ACT , IT WAS THE CONTENTION OF THE DR THAT THE SAID DECISION WAS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE . 3.3 IT WAS SUBMITTED THAT NO PREJUDICE W AS CAUSED TO THE ASSESSEE AS THE ASSESSEE WAS AWARE ABOUT THE CHARGES OF CONCEALMENT OF INCOME AT THE TIME OF ASSESSMENT AS WELL AS AT THE TIME OF IMPOSITION OF PENALTY . IN FACT THE ASSESSEE HAS PARTICIPATED IN THE PENALTY PROCEEDINGS AND HAD FILED THE REP LY IN THE PENALTY PROCEEDINGS ALSO. HE ALSO DREW OUR ATTENTION TO PAGE NO.2 OF THE ASSESSMENT ORDER WHICH READS AS UNDER : - I N THE ASSESSMENT ORDER U/S.153A READ WITH SECTION 143(3) OF THE ACT DATED 31.12.2012, YOUR HONOUR HAS INITIATED PENALTY PROCEEDINGS ON THE ALLEGED CONCEALMENT OF RS.7,15,35,139/ - SAYING THAT THE ASSESSEE HAS OFFERED THE UNDISCLOSED INCOME IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 5 AFTER CARRYING OUT SEARCH U/S.132 DATED 21.04.2010 AND HENCE CONCEALED THE SAID INCOME. THERE ARE VARIOUS POINTS ON WHICH WE ARE AGGRIEVED BY YOUR SUBJECT ORDER AND PREFER AN APPEAL BEFORE THE HON. COMMISSIONER OF INCOME TAX (APPEAL) - VI , BANGALORE. AND AS MENTIONED ABOVE WE HAVE TIME TILL 15 TH FEBRUARY 2013 TO FILE THE SAID APPEAL. THEREFORE, THIS IS TO REQUEST YOU TO KINDLY KEEP THE PROCEEDINGS IN ABEYANCE TILL THE MATTER REACHES FINALITY. 3 . 4 ON THE BASIS OF THE ABOVE, IT WAS SUBMITTED THAT THE ASSESSEE WAS AWARE ABOUT THE REASONS FOR IMPOSITION OF PENALTY I.E IT WAS ON ACCOUNT OF CONCEALMENT OF INCOME AND WAS NOT ON ACCOUNT OF INACCURATE PART ICULARS OF INCOME. IT WAS SUBMITTED THAT SINCE THE ASSESSEE WAS AWARE OF THE CHARGES, THEREFORE, THE PENALTY WAS RIGHTLY IMPOSED BY THE ASSESSING OFFICER AND THE DELETION MADE BY THE CIT(A) WAS WITHOUT ANY BASIS . 4 . PER CONTRA , THE LD. AR OF THE ASSESSEE IN SUPPORT OF THE ORDER PASSED BY THE CIT(A) HA D DRAWN OUR ATTENTION TO THE NOTICE FOR IMPOSITION OF PENALTY DATED 31.12.2012 LEVIED FOR THE ASSESSMENT YEAR 2007 - 2008 , WHICH READS A SUNDER : - NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961 TO, M/S TIMBLO PVT. LTD., KADAR MANZIL, NEAR HARI MANDIR, MARGAO, GOA WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2007 - 2008 IT APPEARS TO ME THAT YOU HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCU RATE PARTICULARS OF SUCH INCOME. YOU ARE, THEREFORE, REQUESTED TO APPEAR BEFORE ME AT 10.00 A.M. ON 23 RD JANUARY, 2013 AND SHOW CAUSE WHY AN ORDER IMPOSING PENALTY ON YOU SHOULD NOT BE PASSED U/S.271(1)( C ) OF THE IT ACT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE, YOU MAY SHOW IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 6 CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECTION 271(1)(C). SD/ - (VARGHESE PHILIP) ASSISTANT COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE, PANAJI, GOA 4 .1 IT WAS SUBMITTED , BY AR, THAT THE CIT(A) HAS RIGHTLY DELETED THE PENALTY AS THE STATUTORY NOTICE WAS ISSUED WITHOUT SPECIFIC ALLY MENTIONING THE CHARGE FOR WHICH THE ASSESSEE WAS REQUIRE D TO GIVE REPLY. HE RELIED UPON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF MD. FARHAN A. SHAIKH VS. DCIT, [2021] 125 TAXMANN.COM 253 (BOMBAY) PASSED BY THE CONSTITUTION BENCH WHEREIN THE HONBLE HIGH COURT IN PARA 17 6 TO 190 HAS HELD AS UNDER : - 176. SECOND, NOT ALWAYS DO WE FIND THE ASSESSMENT PROCEEDINGS REVEALING THE GROUNDS OF PENALTY PROCEEDINGS. ASSESSMENT ORDER NEED NOT CONTAIN A SPECIFIC, EXPLICIT FINDING OF WHETHER THE CONDITIONS MENTIONED IN SECTION 271(1)(C) EXIST IN THE CASE. IT I S BECAUSE EXPLANATIONS 1(A) AND 1(B), AS THE DEEMING PROVISIONS, CREATE A LEGAL FICTION AS TO THE GROUNDS FOR PENALTY PROCEEDINGS. INDEED, THE APEX COURT IN CIT V. ATUL MOHAN BINDAL[ 73], HAS EXPLAINED THE SCOPE OF SECTION 271(1)(C) THUS: [E]XPLANATION 1, APPENDED TO SECTION 27(1) PROVIDES THAT IF THAT PERSON FAILS TO OFFER AN EXPLANATION OR THE EXPLANATION OFFERED BY SUCH PERSON IS FOUND TO BE FALSE, OR THE EXPLANATION OFFERED BY HIM IS NOT SUBSTANTIATED, AND HE FAILS TO PROVE THAT SUCH EXPLANATION IS BON A FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, FOR THE PURPOSES OF SECTION 271(1)(C), THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME IS DEEMED TO REPRESENT TH E CONCEALED INCOME. 177. THAT IS, EVEN IF THE ASSESSMENT ORDER DOES NOT CONTAIN A SPECIFIC FINDING THAT THE ASSESSEE HAS CONCEALED INCOME OR HE IS DEEMED TO HAVE CONCEALED INCOME BECAUSE OF THE EXISTENCE OF FACTS WHICH ARE SET OUT IN EXPLANATION 1, IF A MERE DIRECTION TO INITIATE PENALTY PROCEEDINGS UNDER CLAUSE (C) OF SUB - SECTION (1) IS FOUND IN THE SAID ORDER, BY LEGAL FICTION, IT SHALL BE DEEMED TO CONSTITUTE SATISFACTION OF THE ASSESSING OFFICER FOR INITIATION OF PENALTY PROCEEDINGS UNDER THE SAID CL AUSE (C). IN OTHER WORDS, THE ASSESSING OFFICERS SATISFACTION AS TO BE SPELT OUT IN THE ASSESSMENT ORDER IS ONLY PRIMA FACIE. EVEN IF THE ASSESSMENT ORDER GIVES NO REASON, A MERE DIRECTION FOR PENALTY PROCEEDINGS TRIGGERS THE LEGAL FICTION AS CONTAINED IN THE EXPLANATION (1). IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 7 178. THEREFORE, IN EVERY INSTANCE, IT IS A QUESTION OF INFERENCE WHETHER THE ASSESSMENT ORDER CONTAINED ANY GROUNDS FOR INITIATING THE PENALTY PROCEEDINGS. THEN, WHENEVER THE NOTICE IS VAGUE OR IMPRECISE, THE ASSESSEE ASSAILS IT AS BAD; THE REVENUE DEFENDS IT BY SAYING THAT THE ASSESSMENT ORDER CONTAINS THE PRECISE CHARGE. THUS, IT BECOMES A MATTER OF ADJUDICATION, OPENING LITIGIOUS FLOODGATES. THE SOLUTION IS A TICK MARK IN THE PRINTED NOTICE THE REVENUE IS USED TO SERVING ON THE AS SESSEES. 73 ] [2009] 317 ITR 1 (SC) 56 TXA NOS.51 & 57 OF 2012 179. BESIDES, THE PRIMA FACIE OPINION IN THE ASSESSMENT ORDER NEED NOT ALWAYS TRANSLATE INTO ACTUAL PENALTY PROCEEDINGS. THESE PROCEEDINGS, IN FACT, COMMENCE WITH THE STATUTORY NOTICE UNDER S ECTION 271(1)(C) READ WITH SECTION 274. AGAIN, WHETHER THIS PRIMA FACIE OPINION IS SUFFICIENT TO INFORM THE ASSESSEE ABOUT THE PRECISE CHARGE FOR THE PENALTY IS A MATTER OF INFERENCE AND, THUS, A MATTER OF LITIGATION AND ADJUDICATION. THE SOLUTION, AGAIN, IS A TICK MARK; IT AVOIDS LITIGATION ARISING OUT OF UNCERTAINTY. 180. ONE COURSE OF ACTION BEFORE US IS CURING A DEFECT IN THE NOTICE BY REFERRING TO THE ASSESSMENT ORDER, WHICH MAY OR MAY NOT CONTAIN REASONS FOR THE PENALTY PROCEEDINGS. THE OTHER COURSE OF ACTION IS THE PREVENTION OF DEFECT IN THE NOTICE AND THAT PREVENTION TAKES JUST A TICK MARK. PRUDENCE DEMANDS PREVENTION IS BETTER THAN CURE. ANSWERS: QUESTION NO.1: IF THE ASSESSMENT ORDER CLEARLY RECORDS SATISFACTION FOR IMPOSING PENALTY ON ONE OR TH E OTHER, OR BOTH GROUNDS MENTIONED IN SECTION 271(L)(C), DOES A MERE DEFECT IN THE NOTICE NOT STRIKING OFF THE IRRELEVANT MATTER VITIATE THE PENALTY PROCEEDINGS? 181. IT DOES. THE PRIMARY BURDEN LIES ON THE REVENUE. IN THE ASSESSMENT PROCEEDINGS, IT FORM S AN OPINION, PRIMA FACIE OR OTHERWISE, TO LAUNCH PENALTY PROCEEDINGS AGAINST THE ASSESSEE. BUT THAT TRANSLATES INTO ACTION ONLY THROUGH THE STATUTORY NOTICE UNDER SECTION 271(1)(C), READ WITH SECTION 274 OF IT ACT. TRUE, THE ASSESSMENT PROCEEDINGS FORM TH E BASIS FOR THE PENALTY PROCEEDINGS, BUT THEY ARE NOT COMPOSITE PROCEEDINGS TO DRAW STRENGTH FROM EACH OTHER. NOR CAN EACH CURE THE OTHER'S DEFECT. A PENALTY PROCEEDING IS A COROLLARY; NEVERTHELESS, IT MUST STAND ON ITS OWN. THESE PROCEEDINGS CULMINATE UND ER A DIFFERENT STATUTORY SCHEME THAT REMAINS DISTINCT FROM THE ASSESSMENT PROCEEDINGS. THEREFORE, THE ASSESSEE MUST BE INFORMED OF THE GROUNDS OF THE PENALTY PROCEEDINGS ONLY THROUGH STATUTORY NOTICE. AN OMNIBUS NOTICE SUFFERS FROM THE VICE OF VAGUENESS. 5 7 TXA NOS.51 & 57 OF 2012 182. MORE PARTICULARLY, A PENAL PROVISION, EVEN WITH CIVIL CONSEQUENCES, MUST BE CONSTRUED STRICTLY. AND AMBIGUITY, IF ANY, MUST BE RESOLVED IN THE AFFECTED ASSESSEES FAVOUR. 183. THEREFORE, WE ANSWER THE FIRST QUESTION TO THE EFFECT THAT GOA DOURADO PROMOTIONS AND OTHER CASES HAVE ADOPTED AN APPROACH MORE IN CONSONANCE WITH THE STATUTORY SCHEME. THAT MEANS WE MUST HOLD THAT KAUSHALYA DOES NOT LAY DOWN THE CORRECT PROPOSITION OF LAW. QUESTION NO.2: HAS KAUSHALYA FAILED TO DISCUS S THE ASPECT OF 'PREJUDICE'? IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 8 184. INDEED, KAUSHALYA DID DISCUSS THE ASPECT OF PREJUDICE. AS WE HAVE ALREADY NOTED, KAUSHALYA NOTED THAT THE ASSESSMENT ORDERS ALREADY CONTAINED THE REASONS WHY PENALTY SHOULD BE INITIATED. SO, THE ASSESSEE, STRESSES KAUSHAL YA, FULLY KNEW IN DETAIL THE EXACT CHARGE OF THE REVENUE AGAINST HIM. FOR KAUSHALYA, THE STATUTORY NOTICE SUFFERED FROM NEITHER NON - APPLICATION OF MIND NOR ANY PREJUDICE. ACCORDING TO IT, THE SO - CALLED AMBIGUOUS WORDING IN THE NOTICE [HAS NOT] IMPAIRED OR PREJUDICED THE RIGHT OF THE ASSESSEE TO A REASONABLE OPPORTUNITY OF BEING HEARD. IT WENT ONTO OBSERVE THAT FOR SUSTAINING THE PLEA OF NATURAL JUSTICE ON THE GROUND OF ABSENCE OF OPPORTUNITY, IT HAS TO BE ESTABLISHED THAT PREJUDICE IS CAUSED TO THE CON CERNED PERSON BY THE PROCEDURE FOLLOWED. KAUSHALYA CLOSES THE DISCUSSION BY OBSERVING THAT THE NOTICE ISSUING IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. 185 NO DOUBT, THERE CAN EXIST A CASE WHERE VAGUENESS AND AMBIGUITY IN THE NOTICE CAN DEMONSTRATE NON - APPLICATION OF MIND BY THE AUTHORITY AND/OR ULTIMATE PREJUDICE TO THE RIGHT OF OPPORTUNITY OF HEARING CONTEMPLATED UNDER SECTION 274. SO AS SERTS KAUSHALYA. IN FACT, FOR ONE ASSESSMENT YEAR, IT SET ASIDE THE PENALTY PROCEEDINGS ON THE GROUNDS OF NON - APPLICATION OF MIND AND PREJUDICE. 186. THAT SAID, REGARDING THE OTHER ASSESSMENT YEAR, IT REASONS THAT THE ASSESSMENT ORDER, CONTAINING THE REA SONS OR JUSTIFICATION, AVOIDS 58 TXA NOS.51 & 57 OF 2012 PREJUDICE TO THE ASSESSEE. THAT IS WHERE, WE RECKON, THE REASONING SUFFERS. KAUSHALYAS INSISTENCE THAT THE PREVIOUS PROCEEDINGS SUPPLY JUSTIFICATION AND CURE THE DEFECT IN PENALTY PROCEEDINGS HAS NO T MET OUR ACCEPTANCE. QUESTION NO.3: WHAT IS THE EFFECT OF THE SUPREME COURTS DECISION IN DILIP N. SHROFF ON THE ISSUE OF NON - APPLICATION OF MIND WHEN THE IRRELEVANT PORTIONS OF THE PRINTED NOTICES ARE NOT STRUCK OFF ? 187 IN DILIP N. SHROFF, FOR THE SU PREME COURT, IT IS OF 'SOME SIGNIFICANCE THAT IN THE STANDARD PRO - FORMA 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'. THEN, DILIP N. SHROFF, ON FACTS, HAS FELT THAT THE ASSESSING OFFICER HIMSELF WAS NOT SURE WHETHER HE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED HIS INCOME OR HE HAD FURNISHED INACCURATE PARTICULARS. 188. WE MAY, IN THIS CONTEXT, RESPECTF ULLY OBSERVE THAT A CONTRAVENTION OF A MANDATORY CONDITION OR REQUIREMENT FOR A COMMUNICATION TO BE VALID COMMUNICATION IS FATAL, WITH NO FURTHER PROOF. THAT SAID, EVEN IF THE NOTICE CONTAINS NO CAVEAT THAT THE INAPPLICABLE PORTION BE DELETED, IT IS IN THE INTEREST OF FAIRNESS AND JUSTICE THAT THE NOTICE MUST BE PRECISE. IT SHOULD GIVE NO ROOM FOR AMBIGUITY. THEREFORE, DILIP N. SHROFF DISAPPROVES OF THE ROUTINE, RITUALISTIC PRACTICE OF ISSUING OMNIBUS SHOW - CAUSE NOTICES. THAT PRACTICE CERTAINLY BETRAYS NONA PPLICATION OF MIND. AND, THEREFORE, THE INFRACTION OF A MANDATORY PROCEDURE LEADING TO PENAL CONSEQUENCES ASSUMES OR IMPLIES PREJUDICE. IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 9 189. IN SUDHIR KUMAR SINGH, THE SUPREME COURT HAS ENCAPSULATED THE PRINCIPLES OF PREJUDICE. ONE OF THE PRINCIPLES IS TH AT 'WHERE PROCEDURAL AND/OR SUBSTANTIVE PROVISIONS OF LAW EMBODY THE PRINCIPLES OF NATURAL JUSTICE, THEIR INFRACTION PER SE DOES NOT LEAD TO INVALIDITY OF THE ORDERS PASSED. HERE AGAIN, PREJUDICE MUST BE CAUSED TO THE LITIGANT, EXCEPT IN THE CASE OF A MAN DATORY PROVISION OF LAW WHICH IS CONCEIVED NOT ONLY IN INDIVIDUAL INTEREST BUT ALSO IN THE PUBLIC INTEREST'. 59 TXA NOS.51 & 57 OF 2012 190. HERE, SECTION 271(1)(C) IS ONE SUCH PROVISION. WITH CALAMITOUS, ALBEIT COMMERCIAL, CONSEQUENCES, THE PROVISION IS MANDATORY AND BROOKS NO TRIFLING WITH OR DILUTION. FOR A FURTHER PRECEDENTIAL PROP, WE MAY REFER TO RAJESH KUMAR V. CIT[ 74], IN WHICH THE APEX COURT HAS QUOTED WITH APPROVAL ITS EARLIER JUDGMENT IN STATE OF ORISSA V. DR. BINAPANI DEI[ 75]. ACCORDING TO I T, WHEN BY REASON OF ACTION ON THE PART OF A STATUTORY AUTHORITY, CIVIL OR EVIL CONSEQUENCES ENSUE, PRINCIPLES OF NATURAL JUSTICE MUST BE FOLLOWED. IN SUCH AN EVENT, ALTHOUGH NO EXPRESS PROVISION IS LAID DOWN ON THIS BEHALF, COMPLIANCE WITH PRINCIPLES OF N ATURAL JUSTICE WOULD BE IMPLICIT. IF A STATUE CONTRAVENES THE PRINCIPLES OF NATURAL JUSTICE, IT MAY ALSO BE HELD ULTRA VIRES ARTICLE 14 OF THE CONSTITUTION. 5 . IN REBUTTAL, THE LD. DR SUBMITTED THAT THE FACTS IN THE CASE OF MOHD. FARHAN A. SHAIKH (SUPRA) ARE DISTINGUISHABLE AS THE HON'BLE CONSTITUTIONAL BENCH HAS ONLY LAID DOWN THE BROAD GUIDELINES FOR DELETING THE PENALTY ORDERS PASSED BY THE ASSESSING OFFICER, HOWEVER, THE HON'BLE HIGH COURT HAS NOT DEALT WITH THE PRESENT ISSUE THAT WHERE THE ASSESSEE H AS HIMSELF MENTIONED IN REPLY TO THE SHOW CAUSE NOTICE THAT THE NOTICE WAS ISSUED FOR CONCEALMENT OF PENALTY. IN OTHER WORDS, IT WAS A STATEMENT THAT THE ASSESSEE WAS AWARE OF THE REASONS FOR IMPOSITION OF PENALTY AND HAD ALSO GIVEN THE REPLY FOR THE SAID REASON THEN THE ASSESSEE CANNOT TAKE THE BENEFIT. 6 . WE HAVE HEARD RIVAL CONTENTIONS OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, THE SOLE BASIS ON THE BASIS OF WHICH THE DELETION WAS MADE BY THE CIT(A) WAS THAT THE NO TICE ISSUED U/S.274 OF THE ACT WAS NON - SPECIFIC AND IT D ID NOT MENTION THE IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 10 CHARGE AGAINST THE ASSESSEE. HOWEVER, AS MENTIONED HEREINABOVE, IN THE REPLY TO PENALTY NOTICE , THE ASSESSEE HAS MENTIONED THAT THE ASSESSING OFFICER HAS INITIATED THE PENALTY ON THE CONCEALMENT OF THE AMOUNT AND NOT FOR FILLING OF INACCURATE PARTICULARS OF INCOME , FURTHER THE ASSESSEE SOUGHT TIME AS THE MATTER WAS PENDING BEFORE CIT(A) . ADMITTEDLY, IN THE PRESENT CASE, THE INCOME WAS NOT DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME FILED BY THE ASSESSEE, HOWEVER, THE INCOME WAS BROUGHT TO TAX ONLY AFTER THE SEARCH WAS CONDUCTED BY THE REVENUE AUTHORITIES IN THE PREMISES OF THE ASSESSEE AND THEREAFTER THE ASSESSEE HAS SURRENDERED THE AMOUNT AS MENTIONED IN THE ASSESSMENT ORDER AND ALSO IN THE PENALTY ORDER , BY DECLARING THE AMOUNT IN THE RETURN FILLED CONSEQUENT UPON THE RECEIPT OF NOTICE UNDER SECTION 153A . 6.1 I N OUR CONSIDERED OPINION, THE DISCLOSURE OF AMOUNT IN THE RETURN OF INCOME FILED CONSEQUENT TO RECEIPT OF THE NOTICE UNDER SECTION 153A, WAS NOT VOLUNTARY, RATHER ASSESSEE WAS FORCED TO SURRENDER, ON ACCOUNT OF THE SEARCH CARRIED OUT BY THE DEPARTMENT. IN OUR VIEW THE PENALTY WAS RIGHTLY IMPOSED BY THE ASSESSING OFFICER AFTER BEING SATISFYING THAT THE ASSESSEE WAS HABIT UAL DEFAULTER AND DESPITE SURVEY/SEARCH THE ASSESSEE HAD NOT DECLARED THE INCOME AND HAD ONLY DECLARED INCOME AFTER THE RECEIPT OF THE NOTICE. THE ORDER OF THE ASSESSING OFFICER, WAS CORRECT ON THIS COUNT. FOR THE ABOVE SAID PURPOSES WE MAY RELY UPON THE D ECISION IN THE CASE OF RAJESH CHAWLA VS. CIT, 22 ND MAY, 2006, REPORTED IN 154 TAXMAN 364 AND ALSO ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA (P) LTD. VS. CIT (2014) 1 SCC 674. THEREFORE, THIS ORDER IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 11 PASSED BY THE CIT(A) WAS REQUIRE D TO BE SET ASIDE ON THIS GROUND ALONE. HOWEVER THE CIT( A) WHILE PASSING THE ORDER, HAD RELIED UPON THE SHOW CAUSE NOTICE ISSUED FOR IMPOSING THE PENALTY AND NON - SPECIFIC MENTIONING OF THE REASONS FOR IMPOSING A PENALTY. 7 . N OW THE QUESTION IS AS TO WHET HER THE PENALTY CAN BE DELETED ON THE BASIS OF NON - SPECIFIC NOTICE. EVEN THOUGH THE ASSESSEE WAS AWARE OF THE CHARGES FOR WHICH THE NOTICE WAS ISSUED, AS IS CLEAR FROM THE REPLY THE PRODUCED HEREINABOVE(PARA3.3). FURTHER THE NOTICE ISSUED UNDER SECTION 274 OF THE ACT , WAS A NON - STATUTORY NOTICE, AS SECTION 274 ONLY PROVIDES THE GRANT OF HEARING TO THE ASSESSEE BEFORE THE IMPOSITION OF PENALTY AND SECTION 274 HAS NOT PROVIDED FOR ISSUING ANY STATUTORY SHOW CAUSE NOTICE TO THE ASSESSEE , HOWEVER IN OUR VIEW ISSUING OF NON - STATUTORY NOTICE IS NECESSARY FOR THE PURPOSES OF ADHERING TO THE PRINCIPLE OF NATURAL JUSTICE. WE ARE REPRODUCING HEREIN SECTION 274 FOR RECORD, IT PROVIDES AS UNDER : - PROCEDURE. 79 274. (1) NO ORDER IM POSING A PENALTY UNDER THIS CHAPTER SHALL BE MADE UNLESS THE ASSESSEE HAS BEEN HEARD, OR HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. 80 [(2) NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHALL BE MADE ( A ) BY THE INCOME - TAX OFFICER, WHERE THE PENALTY EXCEEDS TEN THOUSAND RUPEES; ( B ) BY THE ASSISTANT COMMISSIONER 81 [OR DEPUTY COMMISSIONER], WHERE THE PENALTY EXCEEDS TWENTY THOUSAND RUPEES, EXCEPT WITH THE PRIOR APPROVA L OF THE 82 [JOINT] COMMISSIONER.] 83 [(2A) THE CENTRAL GOVERNMENT MAY MAKE A SCHEME 83A , BY NOTIFICATION IN THE OFFICIAL GAZETTE, FOR THE PURPOSES OF IMPOSING PENALTY UNDER THIS CHAPTER SO AS TO IMPART GREATER EFFICIENCY, TRANSPARENCY AND ACCOUNTABILITY BY (A) ELIMINATING THE INTERFACE BETWEEN THE 84 [INCOME - TAX AUTHORITY AND THE ASSESSEE OR ANY OTHER PERSON] TO TH E EXTENT TECHNOLOGICALLY FEASIBLE; (B) OPTIMISING UTILISATION OF THE RESOURCES THROUGH ECONOMIES OF SCALE AND FUNCTIONAL SPECIALISATION; (C) INTRODUCING A MECHANISM FOR IMPOSING OF IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 12 PENALTY WITH DYNAMIC JURISDICTION IN WHICH PENALTY SHALL BE IMPOSED BY ONE OR MORE INCOME - TAX AUTHORITIES. (2B) THE CENTRAL GOVERNMENT MAY, FOR THE PURPOSES OF GIVING EFFECT TO THE SCHEME MADE UNDER SUB - SECTION (2A), BY NOTIFICATION IN THE OFFICIAL GAZETTE, DIRECT THAT ANY OF THE PROVISIONS OF THIS ACT RELATING TO JURISDICTI ON AND PROCEDURE FOR IMPOSING PENALTY SHALL NOT APPLY OR SHALL APPLY WITH SUCH EXCEPTIONS, MODIFICATIONS AND ADAPTATIONS AS MAY BE SPECIFIED IN THE NOTIFICATION: PROVIDED THAT NO DIRECTION SHALL BE ISSUED AFTER THE 31ST DAY OF MARCH, 2022. (2C) EVERY NOTIF ICATION ISSUED UNDER SUB - SECTION (2A) AND SUB - SECTION (2B) SHALL, AS SOON AS MAY BE AFTER THE NOTIFICATION IS ISSUED, BE LAID BEFORE EACH HOUSE OF PARLIAMENT.] 85 [(3) AN INCOME - TAX AUTHORITY ON MAKING AN ORDER UNDER THIS CHAPTER IMPOSING A PENALTY, UNLESS HE IS HIMSELF THE ASSESSING OFFICER, SHALL FORTHWITH SEND A COPY OF SUCH ORDER TO THE ASSESSING OFFICER.] THEREFORE, THE ACTION ON THE PART OF THE ASSESSING OFFICER WAS IN ACCORDANCE WITH LAW AND THE ORDER PASSED BY TH E CIT(A) WAS REQUIRED TO BE REVERSED ON THAT ACCOUNT ONLY. 7 . 1 IT IS PERTINENT TO NOTE HERE THAT IN THIS CASE THE ASSESSEE WAS HAVING THE CLARITY AS TO WHAT CHARGE WERE LEVELLED IN THE NOTICE I.E. CONCEALMENT OF INCOME ONLY AND, THEREFORE, THE ASSESSEE HA D NOT ASKED THE ASSESSING OFFICER TO SPECIFICALLY MENTION ON WHAT BASIS HE SOUGHT TO IMPOSE THE PENALTY. ON THE OTHER HAND, THE ASSESSEE IN THE REPLY REPRODUCED HEREINABOVE, IN THE PENALTY PROCEEDINGS, HAD MENTIONED THAT NO PENALTY CAN BE LEVIED ON ACCOUNT OF CONCEALMENT OF INCOME (REFER PARA 3 . 3 SUPRA). SINCE THERE WAS NO AMBIGUITY IN THE MIND OF THE ASSESSEE ON WHAT BASIS THE PENALTY SOUGHT TO BE IMPOSED AND AFTER CONSIDERING THE REASON FOR IMPOSING THE PENALTY THE ASSESSEE HAS SPECIFICALLY MENTIONED IN T HE REPLY AS REPRODUCED HEREIN ABOVE IN PARAGRAPH 3.3 . THEREFORE, THE QUESTION OF DELETING/SCORING ONE OF THE CLAUSE IS IMMATERIAL BEING INNOCUOUS IN IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 13 NATURE . IN THE SIMILAR FACTS THIS BENCH IN THE MATTER OF M/S. FAIRYLAND HOTEL & RESORTS PVT. LTD., ( SUPRA) IN ITA NO 274/ AGRA / HAD HELD AS UNDER : - 15. IN THE PENALTY PROCEEDINGS THE NOTICE WAS ISSUED TO THE ASSESSEE AND IN RESPONSE TO THE NOTICE THE ASSESSEES COUNSEL HAD STATED THAT THE AMOUNT OF 1.5 CRORE WAS DECLARED DURING THE COURSE OF SURVEY AN D WAS OFFERED FOR TAXATION TO AVOID LITIGATION AND TO BUY PEACE. IN OUR OPINION THERE WAS NO AMBIGUITY IN THE MIND OF THE ASSESSEE EITHER AT THE ASSESSMENT STAGE OR AT THE STAGE OF IMPOSITION OF PENALTY THAT THE ASSESSEE HAD NOT DISCLOSED THE INCOME OF 1 .5 CRORE IN THE RETURN OF INCOME, DESPITE SURRENDERING RS.1,80,00,000/ - DURING SURVEY PROCEEDINGS. THE ABOVE SAID PLEA OF NON - SPECIFIC NOTICE WAS NOT RAISED BY THE ASSESSEE BEFORE THE COMMISSIONER (APPEAL). IN OUR CONSIDERED OPINION THE NOTICE WAS ISSUED T O THE ASSESSEE AND THE ASSESSEE HAD ALSO FILED THE REPLY STATING REASON FOR NOT DISCLOSING THE ENTIRE AMOUNT IN THE RETURN OF INCOME, AS WAS SURRENDERED ON SURVEY. THE SUM AND SUBSTANCE OF THE SUBMISSION WAS THAT THE ASSESSEE WAS WELL AWARE OF THE CHARGE A GAINST THE ASSESSEE AND THE ASSESSEE WAS REQUIRED TO PLEAD NOT ONLY THE PLEA OF NON - SPECIFIC NOTICE BUT IS ALSO REQUIRED TO RAISE THE DEFENCE OF PREJUDICE CAUSED TO HIM ON ACCOUNT OF NON - SPECIFIC NOTICE. IN OUR CONSIDERED OPINION THE ASSESSEE HAS NOT RAISE D THE PLEA OF NON - SPECIFIC NOTICE BEFORE THE LOWER AUTHORITIES AND HAVE FURTHER NOT RAISED THE PLEA OF PREJUDICE CAUSED TO HIM ON ACCOUNT OF NON - SPECIFIC NOTICE. UNDOUBTEDLY THE JUDGEMENT RELIED UPON BY THE ASSESSEE IN THE MATTER OF CIT VS. MANJUNATHA COTT ON & GINNING FACTORY, 359 ITR 565 (KAR) AND OF HONBLE SUPREME COURT IN THE CASE OF SSA EMRALD MEADOWS, 73 TAXMAN 248 (SC), PROVIDES THAT IN CASE OF NON - SPECIFIC NOTICE THE PENALTY PROCEEDINGS ARE REQUIRED TO BE DROPPED. HOWEVER, HONOURABLE SUPREME COURT I N A SUBSEQUENT JUDGEMENT IN THE MATTER OF SUDHIR KUMAR SINGH AND OTHERS VS. STATE OF UP (CIVIL APPEAL NO. 3498 OF 2020), HAD THE LAID DOWN THAT IT IS NOT ONLY NECESSARY FOR THE ASSESSEE TO RAISE THE PLEA OF VIOLATION OF PRINCIPLE OF NATURAL JUSTICE BUT IT IS ALSO NECESSARY TO PROVE AND PLEAD THE PREJUDICE CAUSED TO HIM ON ACCOUNT OF NON - COMPLIANCE OF PRINCIPLE OF NATURAL JUSTICE AS IN THE PRESENT CASE OF NON - SPECIFIC NOTICE. NOTHING HAS BEEN PLEADED BEFORE US OR BEFORE THE LOWER AUTHORITIES TO PROVE THE PR EJUDICE CAUSED TO THE ASSESSEE ON ACCOUNT OF NON - SPECIFIC NOTICE. IN THE LIGHT OF THE ABOVE WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE ASSESSEE AND THEREFORE THE CO FILED BY THE ASSESSEE IS REQUIRED TO BE DISMISSED AS NO PREJUDICE HAD BEEN CAUSED TO THE ASSESSEE. FURTHER WE ARE ALSO OF THE OPINION THAT THE CHARGE AGAINST THE ASSESSEE WAS KNOWN TO THE ASSESSEE AND HAD FILED THE REPLY THERETO SETTING UP THE PLEA OF BUYING THE PEACE AND TO CURTAIL THE LITIGATION. HOWEVER IN THE REPLY THE ASSESSEE HAS NO T SUBMITTED THAT HE WAS NOT AWARE OF THE CHARGES FOR WHICH THE PENALTY NOTICES WERE ISSUED BY THE ASSESSING OFFICER. 16. NOW COMING TO THE FINDING OF THE COMMISSIONER APPEAL CHALLENGED BY THE REVENUE. THE COMMISSIONER APPEAL HAD DELETED IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 14 THE PENALTY BY DIST INGUISHING THE JUDGEMENT OF THE HONOURABLE SUPREME COURT IN THE MATTER OF MAK DATA AND RELIED UPON THE DECISION OF UTTAM VALUE STEELS (SUPRA). THE SC IN MAK DATA HAD HELD AS UNDER : 9. WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE IS NOT V OLUNTARY IN THE SENSE THAT THE OFFER OF SURRENDER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEARCH CONDUCTED IN THE SISTER CONCERN OF THE ASSESSEE. IN THAT SITUATION, IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. AO DURING THE COU RSE OF ASSESSMENT PROCEEDINGS HAS NOTICED THAT CERTAIN DOCUMENTS COMPRISING OF SHARE APPLICATION FORMS, BANK STATEMENTS, MEMORANDUM OF ASSOCIATION OF COMPANIES, AFFIDAVITS, COPIES OF INCOME TAX RETURNS AND ASSESSMENT ORDERS AND BLANK SHARE TRANSFER DEEDS D ULY SIGNED, HAVE BEEN IMPOUNDED IN THE COURSE OF SURVEY PROCEEDINGS UNDER SECTION 133A CONDUCTED ON 16.12.2003, IN THE CASE OF A SISTER CONCERN OF THE ASSESSEE. THE SURVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HA D IT BEEN THE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOULD HAVE FILED THE RETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLEAR THAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IT IS THE STATUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RET URN OF INCOME FILED BY IT FROM YEAR TO YEAR. THE AO, IN OUR VIEW, HAS RECORDED A CATEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED TRUE PARTICULARS OF INCOME AND IS LIABLE FOR PENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. 17. IN THE MATTER OF SAMSON MARITIME LTD.[2017] 88 TAXMANN.COM 671 (BOMBAY) IT WAS HELD AS UNDER : 8. THE GRIEVANCE OF THE APPELLANT - ASSESSEE BEFORE US IS THAT IT HAD ITSELF BROUGHT ITS MISTAKE OF DEBITING THE LOSS ON ACCOUNT OF FOREIGN EXCHANGE FLUCTUATION TO DETERMINE ITS NON - TONNAGE INCOME TO THE NOTICE OF THE ASSESSING OFFICER. THIS, ACCORDING TO HIM, IS STATED IN ITS AFFIDAVIT DATED 23RD JUNE, 2010 FILED DURING THE PENALTY PROCEEDINGS BEFORE THE ASSESSING OFFICER. HOWEVER, THE ABOVE AFFIDAVIT AS FILED BY THE APPELLANT DURING PENAL PROCEEDINGS, HAS BEEN IGNORED BY ALL THE AUTHORITIES INCLUDING THE TRIBUNAL WHILE PASSING THE IMPUGNED ORDER. IT IS SUBMITTED THAT THE ABOVE FACT ITSELF WOULD JUSTIFY DROPPING OF ANY PENAL PROCEEDINGS AGAINST APPELLANT - ASSESSEE. IT WAS ALSO SUBMITTED BEFORE US THAT DEBITING OF THE FOREIGN EXCHANGE LOSS TO ARRIVE ITS NON - TONNAGE INCOME, WAS A MISTAKE AND NO PENALTY BE IMPOSED FOR THE MISTAKE COMMITTED. RELIANCE WAS PLACED UPON THE APEX COURT 'S DECISION IN PRICE WATERHOUSE COOPERS (P.) LTD. V. CIT [2012] 25 TAXMANN.COM 400/211 TAXMAN 40/348 ITR 306 TO CONTEND THAT MISTAKES MADE BY AN ASSESSEE IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 15 CANNOT BE THE BASIS FOR IMPOSITION OF PENALTY. IN THE ABOVE VIEW, IT IS SUBMITTED THAT THE APPEAL BE ADMITTED. 9. FROM THE RECORD IT IS CLEAR THAT THE NOTICE UNDER SECTIONS 142(1) AND 143(2) OF THE ACT WERE ISSUED TO THE APPELLANT ON 14TH JANUARY, 2009. THE NOTICE ALSO CONTAINS AN ANNEXURE, SEEKING DETAILS OF EXPENSES DE BITED TO PROFIT AND LOSS ACCOUNT, ALONG WITH DETAILS OF FOREIGN EXCHANGE EXPENSES. EVEN ACCORDING TO THE APPELLANT, THE ALLEGED MISTAKE ON ITS PART WAS POINTED OUT BY A LETTER DATED 23RD SEPTEMBER, 2009 DURING ASSESSMENT PROCEEDINGS WHERE IT STATED THAT IT HAD COMMITTED A MISTAKE IN DEBITING FOREIGN EXCHANGE LOSS TO ITS DETERMINE NON - TONNAGE INCOME, WHEN IN FACT, NO FOREIGN EXCHANGE LOSS WAS INVOLVED IN RESPECT OF ITS NON - TONNAGE BUSINESS. THUS, IT IS CLEAR THAT SO - CALLED MISTAKE AS CLAIMED BY THE APPELLANT - ASSESSEE, WAS ONLY AFTER NOTICES DATED 14TH JANUARY, 2009 WERE ISSUED UNDER SECTIONS 142 AND 143 OF THE ACT. IT WAS ONLY AN ATTEMPT TO PRE - EMPT THE REVENUE FINDING OUT THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS. THEREFORE, IT CANNOT BE SAID THAT I T WAS VOLUNTARY DISCLOSURE. IN FACT, THE APEX COURT IN MAKDATA (P.) LTD. (SUPRA) HAS OBSERVED THAT ' THE ASSESSING OFFICER, IN OUR VIEW, SHALL NOT BE CARRIED AWAY BY THE PLEA OF THE ASSESSEE LIKE 'VOLUNTARY DISCLOSURE', 'BUY PEACE', 'AVOID LITIGATION' 'AMI CABLE SETTLEMENT' ETC. TO EXPLAIN ITS CONDUCT.' THE APEX COURT HAS ALSO FURTHER OBSERVED THAT 'IT IS TRITE LAW THAT THE VOLUNTARY DISCLOSURE DOES NOT RELEASE APPELLANT - ASSESSEE FROM THE MISCHIEF OF PENAL PROCEEDINGS. THE LAW DOES NOT PROVIDE THAT WHEN AN A SSESSEE MAKES A VOLUNTARY DISCLOSURE OF HIS CONCEALED INCOME, HE HAD TO BE ABSOLVED FROM PENALTY.' IN THE PECULIAR FACT OF THE PRESENT CASE, THE SO - CALLED VOLUNTARY DISCLOSURE WAS ONLY AFTER THE ASSESSING OFFICER INITIATED PROCEEDINGS UNDER SECTION 142 OF THE ACT. THUS, IT WAS NOT A VOLUNTARY DISCLOSURE. IN FACT, THE ASSESSMENT ORDER DATED 24TH DECEMBER, 2009 UNDER SECTION 143(3) OF THE ACT ALSO RECORDS THE FACT OF VERIFICATION BY THE ASSESSING OFFICER, LEADING TO A FINDING THAT THE APPELLANT - ASSESSEE HAD D EBITED FOREIGN EXCHANGE LOSS TO ARRIVE ITS NON - TONNAGE INCOME. THIS ORDER WAS ACCEPTED AND NO GRIEVANCE IN RESPECT OF THE SAME BEING FOUND BY THE ASSESSING OFFICER, WAS MADE BY THE APPELLANT - ASSESSEE. IT IS ONLY IN PENALTY PROCEEDINGS THAT THIS ISSUE IS RA ISED FOR THE FIRST TIME. FURTHER, THE APPELLANT - ASSESSEE BESIDES STATING IT IS A MISTAKE, HAS NOT OFFERED ANY EXPLANATION. THEREFORE, THE EXPLANATION UNDER SECTION 271(1)(C) OF THE ACT WAS NOT FOUND TO BE SATISFACTORY BY THE AUTHORITIES UNDER THE ACT AND P ENALTY IMPOSED AND SUSTAINED. 10. RELIANCE PLACED BY THE APPELLANT - ASSESSEE UPON THE DECISION OF THE APEX COURT IN PRICE WATERHOUSE COOPERS (P.) LTD. (SUPRA), IS INAPPROPRIATE IN THE FACTS OF THE PRESENT CASE. IN THE ABOVE CASE, THE APEX COURT NOTED THE FA CT THAT TRIBUNAL HAD ITSELF COME TO A FINDING THAT THERE WAS A SILLY MISTAKE ON THE PART OF THE ASSESSEE IN NOT HAVING ADDED THE PROVISION FOR GRATUITY TO ITS TOTAL INCOME EVEN WHEN THE DOCUMENTS IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 16 ACCOMPANYING THE RETURN OF INCOME, DID SHOW THAT PROVISION F OR GRATUITY IS NOT ALLOWABLE AS DEDUCTION UNDER SECTION 40(7) OF THE ACT. THUS, IT WAS ONLY A COMPUTATION ERROR IN THE RETURN OF INCOME. IN THE PRESENT FACTS, NONE OF THE AUTHORITIES INCLUDING THE TRIBUNAL HAVE FOUND THE DEBIT OF FOREIGN EXCHANGE LOSS TO I TS NON - TONNAGE BUSINESS WAS MADE ON ACCOUNT OF A MISTAKE. NOR CAN IT BE CLASSIFIED AS AN COMPUTATION ERROR AFTER COMPLETE DISCLOSURE. THUS, THE AFORESAID DECISION DOES NOT ASSIST THE APPELLANT - ASSESSEE. 11. WE NOTE THAT ALL THE THREE AUTHORITIES HAVE COME TO A FINDING OF FACT, ADVERSE TO THE APPELLANT, THAT THE SO - CALLED VOLUNTARY DISCLOSURE WAS NOT VOLUNTARY, BUT MADE ONLY IN RESPONSE TO NOTICES UNDER SECTIONS 142 AND 143 OF THE ACT. THIS FINDING OF FACT IS NOT SHOWN TO BE PERVERSE AND/OR ARBITRARY, WARRAN TING INTERFERENCE. IN VIEW OF THE ABOVE, THE QUESTION AS FRAMED DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. 18 . IN THE MATTER OF GANGOTRI TEXTILES LTD.[2020] 121 TAXMANN.COM 171 (MADRAS) 4. WE HAVE CAREFULLY PERUSED THE PENALTY ORDER DATED 25 - 9 - 2015 AND WE FIND THAT THE ASSESSING OFFICER CONSIDERED ALL THE FACTUAL ASPECTS RAISED BY THE ASSESSEE AND REJECTED THE SAME TO BE ABSOLUTELY WITHOUT BONAFIDES. THE DECISIONS RELIED ON BY THE ASSESSEE WERE ALSO TAKEN NOTE OF AND EACH OF THE DECISIONS WAS D EALT WITH. THE ASSESSING OFFICER PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN MAKDATA (P.) LTD. (SUPRA) AND STATED THAT VOLUNTARY DISCLOSURE DOES NOT RELEASE THE ASSESEE FROM MISCHIEF OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THEREFORE, WE FIND THAT THE PENALTY ORDER IS A REASONED ORDER. 15. THE LEARNED COUNSEL HAD ARGUED THAT THE DEFECT IN THE PENALTY NOTICE IS A QUESTION OF LAW WHICH CAN BE RAISED BY THE ASSESSEE AT ANY POINT OF TIME. WE HAVE CONSIDERED THIS SUBMISSION AND WE HAVE REJECTED IT. THE LEARNED COUNSEL RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF K. LUBNA TO SUBMIT THAT IF THE FACTUAL FOUNDATION FOR A CASE HAS BEEN LAID AND THE LEGAL CONSEQUENCES OF THE SAME HAVING BEEN EXAMINED, THE EXAM INATION OF SUCH LEGAL CONSEQUENCES WOULD BE A PURE QUESTION OF LAW. WE HAVE NOTED THE FACTUAL POSITION. THE ASSESSEE UNDERSTOOD THE NOTICE TO BE UNDER BOTH HEADS, NAMELY, FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. THIS IS EVIDENT FROM THE ASSESSEE'S REPLY DATED 8 - 4 - 2015 TO THE SHOW CAUSE NOTICE DATED 12 - 3 - 2015. THEREFORE, THE DECISION IN THE CASE OF K. LUBNA DOES NOT HELP THE ASSESSEE, AS THERE IS NO SUBSTANTIAL QUESTION OF LAW ARISING FROM SUCH CONTENTION. 16. THE LEAREND COUNSEL ARGUE D THAT THE FINANCIAL CONDITION OF THE ASSESSEE COMPANY WAS ALSO A RELEVANT FACTOR TO ASSESS THEIR BONA FIDES. THIS CONTENTION CANNOT BE ACCEPTED BECAUSE THE SETTLED LEGAL POSITION IS THAT PENALTY CANNOT BE CANCELLED ON IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 17 THE MERE GROUND THAT RETURN OF INCOME AND ASSESSED INCOME WAS A LOSS. IN THE SAID DECISION, THE HON'BLE SUPREME COURT HAD RELIED UPON THE DECISION IN THE CASE OF CIT V. GOLD COIN HEALTH FOOD (P.) LTD. [2008] 172 TAXMAN 386/304 ITR 308 WHEREIN IT WAS HELD THAT EXPLANATION 4(A) TO SECTION 271(1 )(C)(III) IS INTENDED TO LEVY PENALTY NOT ONLY IN A CASE WHERE AFTER ADDITION OF CONCEALED INCOME, A LOSS RETURNED, AFTER ASSESSMENT BECOMES POSITIVE INCOME, BUT ALSO IN A CASE WHERE ADDITION OF CONCEALED INCOME REDUCES THE RETURNED LOSS AND FINALLY THE AS SESSED INCOME IS ALSO A LOSS OR A MINOR FIGURE. IN THIS REGARD, IT WILL BE BENEFICIAL TO REFER TO THE DECISION IN UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS [2008] 174 TAXMAN 571/306 ITR 277(SC), WHICH HAS BEEN REFERRED TO AND RELIED ON IN THE CASE OF N. G. TECHNOLOGIES LTD. 17. AS AGAINST THE ECISION IN THE CASE OF JIVANLAL AND SONS, A SPECIAL LEAVE PETITION FILED AGAINST THE DECISION OF THE HIGH COURT WHICH CONFIRMED THE PENALTY ORDER PASSED BY THE TRIBUNAL REJECTING THE ASSESSEE'S EXPLANATION THAT I T HAD CLAIMED DEDUCTION ON WRONG ADVICE GIVEN BY THE CHARTERED ACCOUNTANT WAS DISMISSED. THE OPERATIVE PORTION OF THE JUDGMENT OF THE HIGH COURT OF BOMBAY IN JIVANLAL& SONS V. ASSTT. CIT [2019] 103 TAXMANN.COM 207 IS AS FOLLOWS: 2. WE ARE UNABLE TO AGREE F OR MORE THAN ONE REASON. THE ASSESSEE IS A FIRM. IT WAS THROUGHOUT BEING ADVISED AND REPRESENTED BY A CHARTERED ACCOUNTANT. THE TRIBUNAL RIGHTLY PROCEEDED ON THE BASIS THAT A CHARTERED ACCOUNTANT IS DEEMED TO BE AWARE OF THE LAW AND ITS INTRICACIES. BEING A PROFESSIONAL, HE COULD NOT HAVE COMMITTED A MISTAKE AS WAS ATTRIBUTED TO HIM. THE TAX PAID IS UNDISPUTEDLY AN INADMISSIBLE EXPENDITURE FROM THE PROFITS OF THE BUSINESS. HENCE THIS AMOUNT SHOULD HAVE BEEN STATUTORILY ADDED BACK. FURTHER, FROM THE COMPUTAT ION OF INCOME, THE ASSESSEE ADDED BACK CERTAIN INADMISSIBLE EXPENDITURE. HOWEVER, HE EXCLUDED THE AMOUNT OF INCOME TAX PAID TO THE EXTENT OF RS. 48,90,114/ - . THUS, THE ADDITION WAS ONLY PARTIAL AND NOT FULL. UNLESS AND UNTIL THE LEGAL PROVISION THEN IN FOR CE PERMITTED EXCLUSION OF THE AMOUNT OF INCOME TAX ALREADY PAID, THE CHARTERED ACCOUNTANT COULD NOT HAVE DONE THIS. THE CHARTERED ACCOUNTANT CANNOT FEIGN IGNORANCE OF SECTION 40(II) OF THE INCOME - TAX ACT AS HE IS WELL TRAINED AND WELL VERSED IN LAW REPRESE NTING NOT ONLY THE ASSESSEE, BUT VARIOUS OTHER CLIENTS. AS FAR AS THE ASSESSEE'S MALAFIDE INTENTION IS CONCERNED, THE BURDEN WAS ENTIRELY ON THE ASSESSEE TO THEN SHOW IN TERMS OF EXPLANATION - I TO THE PROVISION PERMITTING IMPOSITION OF PENALTY THAT SUCH INT ENTION NEVER EXISTED WHEN THE ABOVE ACT WAS COMMITTED. FOR THAT, THERE WAS NO MATERIAL EITHER IN THE FORM OF EVIDENCE OF THE ASSESSEE OR THE AFFIDAVIT OF THE CHARTERED ACCOUNTANT. HENCE THE COMMISSIONER WAS RIGHT, ACCORDING TO THE TRIBUNAL, IN IMPOSING THI S PENALTY. THE ATTEMPT TO BLAME THE CHARTERED ACCOUNTANT CANNOT RESULT IN THE ASSESSEE'S EXONERATION AND IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 18 CLAIMED IN ABSOLUTE TERMS. IN THE CIRCUMSTANCES, THE PENALTY WAS RIGHTLY IMPOSED. 18. THUS, FOR THE ABOVE REASONS, WE FIND THAT THE ORDER PASSED BY THE TRIBUNAL DOES NOT CALL FOR ANY INTERFERENCE AND THE SUBSTANTIAL QUESTIONS OF LAW FRAMED FOR CONSIDERATION HAVE TO BE ANSWERED AGAINST THE ASSESSEE. 19. SIMILAR VIEWS WERE EXPRESSED BY THE JURISDICTIONAL HIGH COURT IN THE MATTER OF SANDEEP CHANDAK (SUPRA) . THEREFORE IN OUR VIEW THE JUDGEMENT RELIED UPON BY THE ASSESSEE AND CIT(A) WERE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 20. IF WE LOOK INTO THE FACTS OF THE PRESENT CASE, IT IS ABUNDANTLY CLEAR THAT THE ASSESSEE HAD SURRENDERED THE INCOME DURING THE COURSE OF SURVEY ON 25 JULY 2012, HOWEVER DESPITE SURRENDER THE ASSESSEE HAD NOT DISCLOSED THE SAID INCOME IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013 - 2014. IN THE ASSESSMENT PROCEEDING THE ASSESSEE WAS SHOW CAUSED BY THE ASSESS ING OFFICER AND ASKED TO EXPLAIN THE REASONS FOR NOT SURRENDERING THE COMPLETE INCOME. THEREAFTER THE ASSESSEE IN THE WRITTEN SUBMISSION ON 10 MARCH 2016 HAD AGREED TO SURRENDER THE REMAINING AMOUNT AND IN THE WRITTEN SUBMISSION IT WAS SUBMITTED THAT THE A SSESSEE IS DOING IT ONLY TO AVOID LITIGATION AND TO BUY PEACE. 20. IN OUR CONSIDERED OPINION THE INITIAL SURRENDER MADE BY THE ASSESSEE ON 25 JULY 2012 WAS ON ACCOUNT OF THE RECOVERY OF LOOSE PAPERS, HARD DISK AND OTHER DOCUMENTS SHOWING THE UNDISCLOSED INCOME AND INVESTMENT MADE BY THE ASSESSEE, HIS DAUGHTER AND SON. IT WAS NOT VOLUNTARY BUT IT WAS ON ACCOUNT OF THE RECOVERY OF THE SAID DOCUMENTS MADE DURING SURVEY. FURTHER, FROM THE CONDUCT OF THE ASSESSEE, IT IS CLEAR THAT THE SURRENDER WAS LACKING V OLUNTARINESS. IN OUR VIEW THE ASSESSEE WAS FORCED TO DISCLOSE THE INCOME ON ACCOUNT OF SURVEY AND SUBSEQUENT SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER. IN VIEW OF THE ABOVE SAID WE DO NOT FIND ANY JUSTIFICATION FOR THE CIT(APPEALS) TO DELETE THE PE NALTY . HENCE THE ORDER PASSED BY THE CIT (APPEALS) IS REQUIRED TO BE ANNULLED AND THE ORDER OF THE ASSESSING OFFICER IMPOSING THE PENALTY IS REQUIRED TO BE CONFIRMED. ACCORDINGLY WE CONFIRM THE PENALTY IMPOSED BY THE ASSESSING OFFICER. 8. HOWEVER, AFTER MENTIONING THE ABOVE SAID, WE MAY LIKE TO POINT OUT THAT THE HONBLE CONSTITUTIONAL BENCH IN THE CASE OF MOHD. FARHAN A. SHAIKH (SUPRA) HAD LAID DOWN THE GUIDELINES FOR QUASHING THE PENALTY PROCEEDINGS INITIATED ON ACCOUNT OF NON - SPECIFIC NOTICE OR NON - SC ORING OF, NON - APPLICABLE REASON FOR PENALTY. IT IS PERTINENT TO MENTION HERE THAT THE CONSTITUTION BENCH HAS NOT DISCUSSED THE FACTS OF EACH CASES MUCH LESS IT(SS)A NOS.13 - 15/PAN/2017 & CO NOS.22 - 25/PAN/2017 19 CASES IDENTICAL TO THE CASE BEFORE US WHETHER IN SUCH CASES THE PENALTY IS REQUIRED TO BE DELETED OR NOT. 9. IN VIEW OF THE ABOVE BINDING DECISION OF THE JURISDICTIONAL HIGH COURT, DEALING WITH THE IMPOSITION OF PENALTY IN FAVOUR OF THE ASSESSEE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE HIGH COURT IN THE CASE OF MOHD. FARAHN A. SH AIKH (SUPRA), WE DELETE THE PENALTY LEVIED BY THE ASSESSING OFFICER IN ALL THE APPEALS FILED BY THE REVENUE . ACCORDINGLY, THE APPEALS FILED BY THE REVENUE ARE DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALLOWED. 10 . IN THE RESULT, ALL THE APPEALS FILED BY THE REVENUE ARE DISMISSED AND ALL THE CROSS OBJECTIONS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 / 10 / 2021. SD/ - SD/ - ( ) (DR. M ITHA LAL MEENA ) ( ) (LALIET KUMAR) / ACCOUNTANT MEMBER / JUDICIAL MEMBER /PANAJI ; DATED 07 /10 /202 1 `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