Sri Samdev Dasgupta, Kolkata v. Income Tax Officer, Ward-30(3), Kolkata, Kolkata

ITA 2715/KOL/2013 | 2008-2009
Pronouncement Date: 26-10-2016

Appeal Details

RSA Number 271523514 RSA 2013
Assessee PAN ACXPD9358D
Bench Kolkata
Appeal Number ITA 2715/KOL/2013
Duration Of Justice 2 year(s) 10 month(s) 21 day(s)
Appellant Sri Samdev Dasgupta, Kolkata
Respondent Income Tax Officer, Ward-30(3), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 26-10-2016
Appeal Filed By Assessee
Bench Allotted A
Tribunal Order Date 26-10-2016
Date Of Final Hearing 24-10-2016
Next Hearing Date 24-10-2016
Assessment Year 2008-2009
Appeal Filed On 05-12-2013
Judgment Text
ITA NO. 2715/KOL/13 SAMDEV DASGUPTA 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH KOLKATA BEFORE SHRI M.BALAGANESH ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI JUDICIAL MEMBER I.T.A. NO. 2715/KOL/2013 A.Y: 2008-09 SRI SAMDEV DASGUPTA VS. I.T.O WARD-30(3) PAN: ACXPD 9358D KOLKATA (APPELLANT) (RESPONDENT) APPEARANCES BY: SHRI MANOJ KATARUKA ADVOCATE LD.AR F OR THE ASSESSEE SHRI RABIN CHOUDHURY JCIT SR. D.R FO R THE REVENUE DATE OF CONCLUDING THE HEARING : 24-10-2016 DATE OF PRONOUNCING THE ORDER : 26-10-2016 O R D E R SHRI S.S. VISWANETHRA RAVI JM :- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 28-08-2013 PASSED BY THE COMMISSIONER OF INCO ME TAX(APPEALS) XIV KOLKATA FOR THE ASSESSMENT YEAR 2008-09 WHEREIN HE CONFIRMED THE PENALTY IMPOSED BY THE AO U/S. 271(1) (C) OF THE ACT. 2. IT WAS SUBMITTED THAT THE PRESENT APPEAL BY THE ASSESSEE WAS FILED WITH DELAY OF FOUR (04) DAYS AND TO CONDO NE THE SAME THE ASSESSEE FILED AN AFFIDAVIT DATED 1-7-2015 STAT ING THE REASONS FOR DELAY IN FILING THE APPEAL. ON PERUSING THE SAME AND HEARING BOTH THE PARTIES DELAY IS CONDONED AND THE APPEAL IS HEARD. ITA NO. 2715/KOL/13 SAMDEV DASGUPTA 2 3. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ACTION OF THE LEARNED CIT(APPEALS) IN CONFIRMING TH E PENALTY OF RS.199735/- IMPOSED BY THE ASSESSING OFF ICER U/S 271 (1 )(C) OF THE INCOME TAX ACT IS BAD IN LAW . 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE ACTION OF THE LEARNED CIT(APPEALS) IN CONFIRMIN G THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT OF RS.199735/- IMPOSED BY THE ASSESSING OFFICER WITHOU T GIVING FINDING OF ANY CONCEALMENT OF INCOME AND/OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IS B AD IN LAW AND THE PENALTY ORDER CONFIRMED IS UNJUSTIFIED. 3. THAT THE PENALTY ORDER U/S 271 (1 )(C) PASSED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(APPEALS) SUFFERS FROM INFIRMITY AND IS ILLEGAL ERRONEOUS AND UNJUSTIFIED. 4. THAT THE ABOVE GROUNDS OF APPEAL SHALL BE ARGUED IN DETAIL AT THE TIME OF HEARING AND THE APPELLANT CRA VES LEAVE TO SUBMIT ADDITIONAL GROUNDS OF APPEAL IF ANY AND/OR ALTER VARY MODIFY OR RECTIFY THE GROUNDS OF APPEA L AT OR BEFORE THE TIME OF HEARING. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND DERIVING HIS INCOME FROM BUSINESS P ROFESSION AND OTHER SOURCES. HOWEVER HE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING A TOTAL INCOME AT RS.6 41 310/- ON 03-10-2008. UNDER SCRUTI NY NOTICES U/SEC 143(2) AND 142(1) WERE ISSUED. IN RESPONSE TO WHICH THE ASSESSEE PRODUCED BOOKS OF ACCOUNT AND BANK STATEMENT FOR VE RIFICATION. 5. DURING SUCH PROCEEDINGS THE AO FOUND THAT THE A SSESSEE HAS DEBITED AN AMOUNT OF RS. 7 84 434/- AS INTEREST ON CAR MOTOR CYCLE AND PERSONAL LOAN. IN EXPLANATION THE ASSESSEE FILED D ETAILS OF SUCH CLAIM OF INTEREST. OUT OF TOTAL INTEREST AMOUNTING TO RS.3 53 357/- WAS RELATABLE TO INTEREST ON CAR AND MOTOR CYCLE. ACCORDING TO THE A O THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE ON REMAINING BALANCE OF INTERE ST AS CLAIMED BY HIS TOWARDS PERSONAL LOAN. THUS THE AO DISALLOWED THE INTEREST OF RS.4 ITA NO. 2715/KOL/13 SAMDEV DASGUPTA 3 31 077/- STATING THAT THE ASSESSEE COULD NOT PRODU CE ANY EXPLANATION IN THAT REGARD. ACCORDINGLY THE ASSESSING OFFICER HAS INITIATED THE PENALTY PROCEEDINGS U/S. 271(1) (C) FOR CONCEALMENT OF INCO ME AND FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND LEVIED PEN ALTY OF RS. 1 99 735/- U/SEC 271(1)(C) OF THE ACT BY AN ORDER DT. 30-06-20 11. 6. AGAINST WHICH THE ASSESSEE PREFERRED AN APPEAL B EFORE THE CIT(A). THE ASSESSEE CONTENDED THAT THE DETAILS AN D BOOKS OF ACCOUNT WERE FILED BEFORE THE AO AND ALL THE LOANS WERE AVAILED AND UTILISED FOR THE PURPOSE OF BUSINESS AND DID NO T CONCEAL ANY PARTICULARS OF INCOME. THE CIT-A AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CONFIRMED THE IMPUGNED PENALTY OF RS. 1 99 735/- IMPOSED BY THE AO U/S. 271(1) ( C) O F THE ACT BY OBSERVING AS UNDER:- 4.1 AS STATED BY THE A.O. IN HIS ORDER OF PENALTY P ASSED U/S. 271(1)(C) OF THE ACT THAT THE ASSESSEE HAS WRONGLY DEBITED THE AMOUNT OF INTEREST OF RS. 4 31 077/- IN PROFIT AND LOSS A/E. BESIDES ABOVE THE LEARNED A/R OF THE APPELLANT HAS FAILED TO FURNISH ANY EXPLANATION WITH PROPER EVIDENCES AS TO HOW THE LOANS WERE UTILIZED FOR EARNING TAXABLE INCOME DUR ING THE COURSE OF THE ASSESSMENT PROCEEDINGS AS WELL AS PENAL PROC EEDINGS. IT IS NOT IRRELEVANT TO MENTION THAT THE WORD 'INCOME' IN SEE. 271(1)(C) IS NOT USED IN THE POPULAR SENSE OF MONEY RECEIVED BUT CONNOTES THE ASSESSABLE FIGURE ARRIVED AT AFTER ACC OUNTING FOR ALL THE LEGITIMATE DEDUCTIONS AND EXEMPTIONS [NAGINCHAN D V. CIT 6 ITR 534]. RESPECTFULLY FOLLOWING THE DECISION CITED SUPRA I UPHOLD THAT THE ACTION OF THE A.O. OF IMPOSING A MI NIMUM PENALTY AMOUNTING TO RS. 1 99 735/- IN THE CASE OF THE APPELLANT IS IN ACCORDANCE WITH LAW. THE ASSESSEE HAS FAILED TO PROVIDE ANY COGENT EVIDENCES BEFORE THE A.O. REGARDING UTILIZAT ION OF THE LOANS SUPPOSEDLY USED FOR HIS BUSINESS FOR THE REAS ON OF WHICH THE A.O. HAS LEVIED THE PENALTY OF RS. 1 99 735/- O N THE APPELLANT. I HOLD THAT THE A.O. IS ABSOLUTELY RIGHT IN THE EYES OF LAW IN HIS ACTION OF IMPOSING PENALTY OF RS. 1 99 7 35/- ON THE APPELLANT. ACCORDINGLY THE APPEAL DOES NOT SUCCEED . ACCORDINGLY THE GROUND NO. 1 OF THE INSTANT APPEAL IS DISMISSED . ITA NO. 2715/KOL/13 SAMDEV DASGUPTA 4 7. AGGRIEVED BY SUCH ORDER OF THE CIT-A NOW THE AS SESSEE IS IN SECOND APPEAL BEFORE US BY RAISING THE ABOVE MENTIONED GRO UNDS OF APPEAL. 8. DURING THE COURSE OF ARGUMENTS THE LD. AR FOR TH E ASSESSEE SUBMITTED THAT THE CASE UNDER CONSIDERATION IS COVE RED BY THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF C IT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565 (KARN) AND ALSO BY THE ORDER OF THE TRIBUNAL IN THE CASE OF SUVAPRASAN NA BHATTACHARYA VS. ACIT CIR-55 KOLKATA IN ITA NO. 1303/KOL/2010 DATE D 06-11-2015 WHICH CONSIDERED DECISION OF THE HONBLE KARNATAKA HIGH C OURT SUPRA AND PASSED DETAILED ORDER THE SAID ISSUE. ON THE CONTRARY THE LD. DR HAS RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 9. HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. THE QUESTION BEFORE US IS AS TO WHETHER THE PENALTY ORDER PASSED BY THE AO AND CONFIRMED BY THE CIT(A) IS IN PURSUA NCE OF THE LAW LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT SUPRA . THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. VS MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565 (KARN) HAS HELD THAT NOTICE U/S. 274 OF THE ACT SHOULD SPECIFICALLY STATE AS TO WHETHER PENALTY IS BEING PROPOSED TO BE IMPOSED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. FURTHER AS SUBMITTED BY THE LD.AR THE AF ORESAID DECISION WILL SQUARELY BE APPLICABLE TO THE PRESENT CASE AND THE ORDER IMPOSING PENALTY HAVE TO BE HELD AS BAD IN LAW AND LIABLE TO BE QUAS HED. 10. AS RIGHTLY POINTED OUT BY THE LD.AR THE CO-ORD INATE BENCH OF KOLKATA TRIBUNAL IN THE CASE OF SUVAPRASANNA BHATTA CHARYA VS. ACIT BY AN ITA NO. 2715/KOL/13 SAMDEV DASGUPTA 5 ORDER DATED 06-11-2015 CONSIDERED THE JUDGMENT OF H ONBLE KARNATAKA HIGH COURT SUPRA THE RELEVANT PORTION OF WHICH REPRODUCED HEREUNDE R: 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 T O WHETHER THE PENALTY IS SOUGHT TO BE LEVIED ON THE FOR FURNISHING INACCURA TE PARTICULARS OF INCOME OR CONCEALING PARTICULARS OF SUCH INCOME. ON THI S ASPECT WE FIND THAT IN THE SHOW CAUSE NOTICE U/S.274 OF THE ACT THE AO HAS NOT STRUCK OUT THE IRRELEVANT PART. IT IS THEREFORE NOT SPELT OUT AS T O WHETHER THE PENALTY PROCEEDINGS ARE SOUGHT TO BE LEVIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALING PARTICULARS OF SUCH INCOME. 8.1 THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565 (KARN) HAS HELD THAT NOTICE U/S. 274 OF THE ACT SHOULD SPECIFICALLY STAT E AS TO WHETHER PENALTY IS BEING PROPOSED TO BE IMPOSED FOR CONCEALMENT OF PAR TICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. TH E HONBLE HIGH COURT HAS FURTHER LAID DOWN THAT CERTAIN PRINTED FORM WHERE A LL THE GROUNDS GIVEN IN SECTION 271 ARE GIVEN WOULD NOT SATISFY THE REQUIRE MENT OF LAW. THE COURT HAS ALSO HELD THAT INITIATING PENALTY PROCEEDINGS O N ONE LIMB AND FIND THE ASSESSEE GUILTY IN ANOTHER LIMB IS BAD IN LAW. IT W AS SUBMITTED THAT IN THE PRESENT CASE THE AFORESAID DECISION WILL SQUARELY APPLY AND ALL THE ORDERS IMPOSING PENALTY HAVE TO BE HELD AS BAD IN LAW AND LIABLE TO BE QUASHED. 8.2 THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) HAS LAID DOWN THE FOLLOWING PRINCIPLES TO BE FOLLOWED IN THE MATTER 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 PASSED BY THE AUTHORITY CATEGORICALLY RECORDS A FINDING REGARDING THE EXIST ENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN PENALTY PROCEEDINGS IS I NITIATED IN THE NOTICE TO BE ISSUED UNDER SECTION 274 THEY COULD CONVENIENTL Y REFER TO THE SAID ORDER WHICH CONTAINS THE SATISFACTION OF THE AUTHORITY WH ICH HAS PASSED THE ORDER. HOWEVER IF THE EXISTENCE OF THE CONDITIONS COULD N OT BE DISCERNED FROM THE SAID ORDER AND IF IT IS A CASE OF RELYING ON DEEMIN G PROVISION CONTAINED IN EXPLANATION-1 OR IN EXPLANATION-1(B) THEN THOUGH P ENALTY PROCEEDINGS ARE IN THE NATURE OF CIVIL LIABILITY IN FACT IT IS PE NAL 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 TH AT ASSESSEE HAS A RIGHT TO CONTEST SUCH PROCEEDINGS AND SHOULD HAVE FULL OP PORTUNITY TO MEET THE CASE OF THE DEPARTMENT AND SHOW THAT THE CONDITIONS STIPULATED IN SECTION 271(1)(C) DO NOT EXIST AS SUCH HE IS NOT LIABLE TO PAY PENALTY. THE PRACTICE OF THE DEPARTMENT SENDING A PRINTED FARM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIRE MENT 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 100% TO 30 0% OF THE TAX LIABILITY. ITA NO. 2715/KOL/13 SAMDEV DASGUPTA 6 AS THE SAID PROVISIONS HAVE TO BE HELD TO BE STRICT LY CONSTRUED NOTICE ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE PRINCIPLES OF NATURAL JUST ICE IS OFFENDED IF THE SHOW CAUSE NOTICE IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS NO PENALTY COULD BE IMPOSED ON THE ASSESSEE. 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES TH AT IS TO SAY CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. NO DOUBT THE FACTS OF SOME CASES MAY ATTRACT BOTH THE OFFENCES AND IN SOME CASES THERE MAY BE OVERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES THE INITIATION OF THE 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 MENTIONED IN SECTION 271(1 )(C) WHEN IT IS A SINE QUA NON FOR INITIATION OR PROCEEDINGS THE PENALTY PROCEEDINGS SHOULD BE CONFINED ONLY TO THOSE GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECIFICALLY STATED SO THAT THE ASSESSEE WOULD HAVE THE OPPORTUN ITY TO MEET THOSE GROUNDS. AFTER 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 GROUNDS ON WHICH HE IS CALLED UPON TO ANSWER. IT IS NOT OPEN T O THE AUTHORITY AT THE TIME OF IMPOSING PENALTY TO IMPOSE PENALTY ON THE G ROUNDS OTHER THAN WHAT ASSESSEE WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENALTY PROCEEDINGS MAY BE VALID AND LEGAL THE FINAL ORDER IMPOSING PENALTY WOULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAINED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROUND THE PENALTY SHOULD ALSO BE IMPOSED ON THE SAME GROUND. WHERE THE BASIS OF THE IN ITIATION OF PENALTY PROCEEDINGS IS NOT IDENTICAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED THE IMPOSITION OF PENALTY IS N OT VALID. THE VALIDITY OF THE ORDER OF PENALTY MUST BE DETERMINED WI TH REFERENCE TO THE INFORMATION FACTS AND MATERIALS IN THE HANDS OF THE AUTHORITY IMPOSING THE PENALTY AT THE TIME THE ORDER WAS PASSE D AND FURTHER DISCOVERY OF FACTS SUBSEQUENT TO THE IMPOSITION OF P ENALTY CANNOT VALIDATE THE ORDER OF PENALTY WHICH WHEN PASSED WA S NOT SUSTAINABLE. 61. THE ASSESSING OFFICER IS EMPOWERED UNDER THE AC T TO INITIATE PENALTY PROCEEDINGS ONCE HE IS SATISFIED IN THE COURSE OF A NY PROCEEDINGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURAT E PARTICULARS OF TOTAL INCOME UNDER CLAUSE (C). CONCEALMENT FURNISHING IN ACCURATE PARTICULARS OF INCOME ARE DIFFERENT. THUS THE ASSESSING OFFICER WH ILE ISSUING NOTICE HAS TO COME TO THE CONCLUSION THAT WHETHER IS IT A CASE OF CONCEALMENT OF INCOME OR IS IT A CASE OF FURNISHING OF INACCURATE PARTICULAR S. 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 INACCURATE PARTICULARS OF INC OME CARRY DIFFERENT CONNOTATIONS. THE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEERING REPORTED IN 122 ITR 306 AND THE DELHI HIGH COURT IN THE CASE OF VIRGO MARKETING REPORTED IN 171 TAXMAN 156 HAS HELD THAT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED A ND THE POSITION BEING UNCLEAR PENALTY IS NOT SUSTAINABLE. THEREFORE WHEN THE ASS ESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT THEN TH E NOTICE HAS TO BE APPROPRIATELY MARKED. SIMILAR IS THE CASE FOR FURNI SHING INACCURATE PARTICULARS OF INCOME. THE STANDARD PRO FORMA WITHO UT STRIKING OF THE RELEVANT CLAUSES WILL LEAD TO AN INFERENCE AS TO NO N-APPLICATION OF MIND. ITA NO. 2715/KOL/13 SAMDEV DASGUPTA 7 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. 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 AUTH ORITIES EITHER TO INITIATE PENALTY PROCEEDINGS OR IMPOSE PENALTY UNL ESS 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 IF NOT IT WOULD HAVE ESCAPED FROM TAX NET AND AS OPINED BY THE ASSE SSING 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. N) THE DIRECTION REFERRED TO IN EXPLANATION IB TO SECTION 271 OF THE ACT SHOULD BE CLEAR AND WITHOUT ANY AMBIGUITY. ITA NO. 2715/KOL/13 SAMDEV DASGUPTA 8 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 D EFECTIVE AS IT DOES NOT SPELL OUT THE GROUNDS ON WHICH THE PENALTY IS SOUGH T TO BE IMPOSED. FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIG H COURT WE HOLD THAT THE ORDERS IMPOSING PENALTY IN ALL THE ASSESSMENT YEARS HAVE TO BE HELD AS INVALID AND CONSEQUENTLY PENALTY IMPOSED IS CANCELL ED. 11. IN THE PRESENT CASE THE NOTICE DT: 8-12-2010 ISSUED TO ASSESSEE BY THE AO U/SEC 274 R/W 271 OF THE ACT DOES NOT SPECIF ICALLY SHOW ON WHICH GROUND THE PENALTY IS SOUGHT TO BE IMPOSED THEREFO RE THE LAW LAID DOWN BY THE HONBLE HIGH COURT SUPRA AND FOLLOWED BY CO-ORDINATE BENCH OF ITAT KOLKATA IN THE CASE OF SUVAPRASANNA BHATTACHA RYA SUPRA IS APPLICABLE TO THE FACTS OF THE PRESENT APPEAL IN V IEW OF THE SAME WE HOLD ITA NO. 2715/KOL/13 SAMDEV DASGUPTA 9 THAT THE ORDER DT: 30-06-2011 PASSED BY THE AO LEVY ING PENALTY IS NOT VALID. RESPECTFULLY FOLLOWING THE ORDER ABOVE WE C ANCEL THE PENALTY OF RS.1 99 735/- LEVIED U/S. 271(1) (C) OF THE ACT BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). 12. IN THE RESULT THE APPEAL OF ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN OPEN COURT ON 26 TH OCTOBER 2016 SD/- SD/- M.BALAGANESH S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 26 /10/ 2016 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT/ASSESSEE : SRI SAMDEV DASGUPTA C/O MR. MANOJ KATARUKA ADVOCATE P-599 KEYATALA R OAD KOLKATA-700 029. 2 THE RESPONDENT/DEPARTMENT - INCOME TAX OFFICER WARD 30(3) AAYKAR BHAWAN (DAKSHIN) KOLKATA-700068. 3 4. / THE CIT(A) THE CIT 5 . DR KOLKATA BENCH 6 . GUARD FILE . **PP/SPS TRUE COPY BY ORDER AS STT REGISTRAR ITA NO. 2715/KOL/13 SAMDEV DASGUPTA 10