DCIT CC 3(4) CEN RG 3, MUMBAI v. DHANVINDER BINDDRA, MUMBAI

ITA 5694/MUM/2015 | 2002-2003
Pronouncement Date: 01-11-2017 | Result: Allowed

Appeal Details

RSA Number 569419914 RSA 2015
Assessee PAN AACPB6734E
Bench Mumbai
Appeal Number ITA 5694/MUM/2015
Duration Of Justice 1 year(s) 10 month(s) 11 day(s)
Appellant DCIT CC 3(4) CEN RG 3, MUMBAI
Respondent DHANVINDER BINDDRA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 01-11-2017
Appeal Filed By Department
Tags No record found
Order Result Allowed
Bench Allotted D
Tribunal Order Date 01-11-2017
Assessment Year 2002-2003
Appeal Filed On 21-12-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH MUMBAI BEFORE SHRI P K BANSAL VICE PRESIDENT AND SHRI R.L. NEGI JUDICIAL MEMBER ITA NOS. 5694 TO 5699 /MUM/2015 (ASSESSMENT YEARS: 2002-03 TO 2007-08) DCIT CENTRAL CIRCLE - 3(4) VS. SHRI DHANVINDER BINDRA ROOM NO. 401 4TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI 400020 A - 71 COZY HOME 251-PALI HILL BANDRA (W) MUMBAI 400050 PAN AACPB6734E APPELLANT RESPONDENT APPELLANT BY: SHRI PURUSHOTTAM KUMAR RESPONDENT BY: SHRI NEEL KHANDELWAL DATE OF HEARING: 11.10.2017 DATE OF PRONOUNCEMENT: 01.11.2017 O R D E R PER P.K. BANSAL VICE PRESIDENT ALL THESE APPEALS HAVE BEEN FILED BY THE REVENUE AG AINST THE ORDERS OF THE CIT(A)-51 MUMBAI DATED 09.09.2015 FOR ASSESSME NT YEARS 2002-03 TO 2007-08. BOTH THE PARTIES AGREED THAT THESE APPEALS BE DISPOSED OFF ON THE FACTS FOR A.Y. 2002-03 2. IN ALL THE ASSESSMENT YEARS THE REVENUE HAS TAKEN THE FOLLOWING COMMON GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE PENALTY WITHOUT AP PRECIATING THAT THE PENALTY PROCEEDINGS WHERE CORRECTLY INTIATED AS PER SECTION 271(L)(C) OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE PENALTY WITHOUT AP PRECIATING THE FACT THE RECEIPT OF MONEY OUTSIDE THE RECORDED THE BOOK WAS ADMITTED IN THE STATEMENT UNDER OATH DURING SEARCH AND THAT THE ASSESSEE WAS NOT MAINTAINING ANY RECORD FOR SUCH SU M AND THEREFORE HAS CLEARLY CONCEALED THE PARTICULARS OF INCOME.' ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 2 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND S EIZURE OPERATION WAS CARRIED UNDER SECTION 132 OF THE INCOME TAX ACT ON 08.05.2007 AT THE RESIDENCE AND OFFICE PREMISES OF THE BINDRA-ROHIRA GROUP. THE ASSESSEE WAS ALSO COVERED IN THE SEARCH OPERATION. THE ASSES SEE IS AN INDIVIDUAL AND HAVING INCOME FROM BUSINESS RENTAL AND OTHER S OURCES. IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 153A THE ASSESSEE FILED RETURN OF INCOME DECLARING INCOME OF ` 11 44 380/- BEING INCOME FROM BUSINESS RENTAL INCOME AND INCOME FROM OTHER SOURCES. THE ASSESSMEN T WAS COMPLETED UNDER SECTION 143(3) R.W.S. 153A. THE AO MADE AN AD DITION OF ` 1 82 50 000/- ASSUMING A DAILY INCOME OF ` 50 000/- )ASSESSEES SHARE BEING 50%) FROM SHRI RAM SOCIAL CLUB THE OTHER 50% SHARE OF EQUAL AMOUNT BEING ADDED AS INCOME IN THE HANDS OF MR. LA XMICHAND ROHIRA ALSO COVERED IN THE SAID SEARCH ON BINDRA-ROHIRA GR OUP. THE AO THUS TAXED THIS AMOUNT OF ` 1 82 50 000/- UNDER THE HEAD INCOME FROM BUSINESS THERE BY FINALLY ASSESSING THE TOTAL INCO ME AT ` 1 93 94 380/-. THE AO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) BY OBSERVING THAT PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) A RE INITIATED SEPARATELY. 4. SO FAR AS THE ASSESSMENT IS CONCERNED THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) CHALLENGING THE ADDITION OF ` 1 82 50 000/-. THE CIT(A) VIDE HIS ORDER DATED 09.11.2012 GAVE PARTIAL RELIEF ON THE IMPUGNED ADDITION BY REDUCING IT TO A DAILY INCOME OF ` 13 750/- FROM ` 50 000/- PER DAY AS TAKEN BY THE AO. THE CIT(A) THUS EFFECTIVELY REDUCED THE ADDITION TO ` 50 18 750/- AGAINST WHICH WHEN THE MATTER REACHED B EFORE THE TRIBUNAL THE TRIBUNAL FURTHER REDUCED THE ADDITION. 5. THE ASSESSING OFFICER HAS LEVIED PENALTY U/S 271(1 ) BUT DID NOT INDICATE ANY PARTICULAR LIMB/CHARGE ON WHICH PENALT Y SOUGHT TO BE INITIATED ON THE SAID ADDITION OF ` 1 82 50 000/-. THE CIT(A) AFTER GOING THROUGH THE ASSESSMENT ORDER AS WELL AS THE PENALTY ORDER TOOK THE VIEW FOLLOWING THE ORDER OF THE KARNATAKA HIGH COURT IN THE CASE OF MA NJUNATHA COTTON AND GINNING FACTORY 359 ITR 565 AS WELL AS THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEERING 122 ITR 306 THAT PENAL TY HAS NOT BEEN INITIATED AND LEVIED FOR SPECIFIC CHARGE THEREFORE HE DELETED THE PENALTY. ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 3 EVEN ON MERITS ALSO HE TOOK THE VIEW THAT SINCE THE ADDITIONS WERE MADE ON ESTIMATE BASIS THEREFORE NO PENALTY CAN BE LEV IED AND IN THIS REGARD RELIED ON THE DECISIONS OF THE HON'BLE RAJASTHAN HI GH COURT IN THE CASE OF KRISHI TYRE RETREADING 360 ITR 580 CIT VS. MAHENDR A SINGH KHEDIA 252 CTR 453 AND NARESH CHAND AGARWAL VS. CIT (IT APPEAL NO. 79 OF 2008). THE LEARNED D.R. CONTENDED THAT THE CIT(A) WAS NOT CORRECT IN DELETING THE PENALTY ON TECHNICAL GROUND AND IN THIS REGARD HE R ELIED ON THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SUS HIL KUMAR SHARAD KUMAR VS. CIT 232 ITR 588 FOR THE PROPOSITION OF LA W THAT THE ASSESSEE HAVING SHOWN LOW HOUSEHOLD EXPENSES WHEREAS THERE I S EVIDENCE OF HIGHER EXPENDITURE. THIS PROVES THAT INITIAL BURDEN TO PRO VE CONCEALMENT HAS BEEN DISCHARGED BY THE DEPARTMENT AS THE ASSESSEE HAS NO T LAID ANY FRESH EVIDENCE IN PENALTY PROCEEDINGS. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE I BENCH OF THIS TRIBUNAL IN THE CASE OF SH RI MAHESH M. GANDHI VS. ACIT ITA NO. 2976/MUM/2016 IN WHICH THE TRIBUNAL H AS CONFIRMED THE ORDER OF THE CIT(A) LEVYING PENALTY. OUR ATTENTION WAS DRAWN TO PARA 8 OF THIS ORDER IN WHICH THE TRIBUNAL HAS OBSERVED AS UN DER: - IN THE CASE LAWS CITED BY THE ASSESSEE IN THE CASE OF DR. SARITA MILIND DAVARE V. ACIT (SUPRA) THE NOTICE ISSUED U/S 271(1 )(C) OF THE ACT WAS PRIMARILY MEANT TO ASK THE TAX-PAYER TO FURNISH A R ETURN OF INCOME AND MERELY AO MODIFIED THE LAST PARAGRAPH BY SHOW CAUSI NG THE TAX- PAYER TO EXPLAIN AS TO WHY AN ORDER IMPOSING A PENA LTY SHOULD NOT BE MADE U/S 271(1)(C) OF THE ACT . IN THE CASE OF CHAN DRA PRAKASH BUBNA(SUPRA) RELIED UPON BY THE ASSESSEE IT WAS T HE CASE WHERE PENALTY NOTICE SIMPLY STATED AS UNDER: I AM SATISFIED THAT THIS IS A FIT CASE WHERE PROVI SIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT ARE CLEARLY ATTRACT . WHILE IN THE INSTANT APPEAL THE AO HAS ISSUED NOTIC E U/S. 274 READ WITH SECTION 271(1)(C) OF THE ACT DATED 20-02-2014 WHEREIN THE AO RECORDED AS UNDER: WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2011-12 IT APPEARS THAT YOU HAVE C ONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCUR ATE PARTICULARS OF SUCH INCOME. IN THE INSTANT APPEAL THE AO HAS RECORDED SATISFAC TION IN DETAIL IN THE ASSESSMENT ORDER DATED 20-02-2014 BEFORE INVOKING P ENALTY PROVISIONS U/S 271(1)(C) OF THE ACT BY RECORDING AS UNDER:- ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 4 5. *** *** THE ASSESSEE HAS VIDE LETTER DATED 18.02.2014 FILED REVISED COMPUTATION OF INCOME OFFERING RS. 4 00 000/- AS DI RECTORS SITTING FEES. THE EXPLANATION SUBMITTED BY THE ASSE SSEE IS CONSIDERED. IT IS NOTED THAT THE ASSESSEE HAS MADE DISCLOSURE OF INCOME OF RS. 4 00 000/- ONLY AFTER THE ASSESSEE WA S ASKED TO EXPLAIN THE SAME. THE ASSESSEE DID NOT POINTED OUT VOLUNTARILY AFTER RECEIPT OF STATUTORY NOTICE U/S 143(3) WHICH WAS ISSUED AFTER ONE YEAR OF FILING OF RETURN OF INCOME. EVEN AFTER THAT WHEN THE CASE WAS UNDER HEARING THE ASSESSEE DID NOT OF FER THE INCOME OF RS.4 00 000/- BEING DIRECTORS SITTING FE ES UNLESS HE WAS SPECIFICALLY ASKED TO EXPLAIN THE SAME. IT IS THEREFORE EVIDENT FROM THE CONDUCT OF THE ASSESSEE THAT HE WA S TRYING TO EVADE THE INCOME TO THE EXTENT OF RS.4 00 000/-. CO NSIDERING THESE FACTS INCOME OF RS.4 00 000/- IS ASSESSED UN DER THE HEAD INCOME FROM BUSINESS. CONSIDERING THESE FACTS I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED HIS INCOM E BY FURNISHING INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.4 00 000/- AND THUS PENALTY PROCEEDINGS U/S 271( 1)(C) OF THE I T ACT 1961 IS INITIATED SEPARATELY ON THIS P OINT. 6.. *** *** THE ASSESSEE HAS VIDE LETTER DATED 18.02.2014 FILED REVISED COMPUTATION OF INCOME OFFERING RS.12 23 642/- UNDER THE HEAD SHORT TERM CAPITAL GAINS. THE EXPLANATION SUBMITT ED BY THE ASSESSEE IS CONSIDERED. IT IS NOTED THAT THE ASSESS EE HAS MADE DISCLOSURE OF INCOME OF RS.12 23 642/- ONLY AFTER T HE ASSESSEE WAS ASKED TO EXPLAIN THE SAME. THE ASSESSEE DID NOT POINTED OUT VOLUNTARILY AFTER RECEIPT OF STATUTORY NOTICE U /S 143(2) WHICH WAS ISSUED AFTER ONE YEAR OF FILING OF RETURN OF IN COME. EVEN AFTER THAT WHEN THE CASE WAS UNDER HEARING THE ASS ESSEE DID NOT OFFER THE INCOME OF RS.12 23 642/- BEING REDEMP TION OF HDFC MUTUAL FUND UNLESS HE WAS SPECIFICALLY ASKED T O EXPLAIN THE SAME. IT IS THEREFORE EVIDENT FROM THE CONDUCT OF THE ASSESSEE THAT HE WAS TRYING TO EVADE THE INCOME TO THE EXTENT OF RS.12 23 642/- . CONSIDERING THESE FACTS INCOME OF RS.12 23 642/- IS ASSESSED UNDER THE HEAD INCOME FR OM CAPITAL GAIN. IN VIEW OF THE ABOVE FACTS I AM SATISFIED TH AT THE ASSESSEE HAS CONCEALED HIS INCOME BY FURNISHING INA CCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.12 23 642 /- AND THUS PENALTY PROCEEDINGS U/S 271(1)(C) IF THE I T ACT 1 961 IS INITIATED SEPARATELY ON THIS POINT. MERELY BECAUSE AO HAS MENTIONED ALTERNATE CHARGES A T THE STAGE OF ISSUE OF NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT WHICH IS A ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 5 PRELIMINARY STAGE OF INITIATING PENALTY PROCEEDINGS THE PROCEEDINGS CANNOT BE HELD TO BE VITIATED AS IN THE INSTANT CA SE THE AO HAS CLEARLY RECORDED DETAILED SATISFACTION AFTER APPLIC ATION OF MIND IN THE ASSESSMENT ORDER DATED 20-02-2014 AS IN THE INSTANT APPEAL THE ASSESSEE WAS CONFRONTED AND CORNERED BY THE REVENUE TO HAVE NOT DISCLOSED THE INCOME EARNED BY WAY OF DIRECTOR SITT ING FEE OF RS.4 00 000/- AND SHORT TERM CAPITAL GAINS ON REDEM PTION OF HDFC MUTUAL FUNDS TO THE TUNE OF RS. 12 23 642/- IN THE RETURN OF INCOME FILED BY THE ASSESSEE WITH THE REVENUE TO WHICH TH E ASSESSEE ADMITTED AND IMMEDIATELY AFTER BEING CONFRONTED BY REVENUE FILED REVISED COMPUTATION OF INCOME AND PAID DUE TAXES TO THE REVENUE. BY NO STRETCH OF IMAGINATION IT CAN BE HELD THAT THE A SSESSEE WAS NOT AWARE OF THE CHARGE AS FRAMED BY THE AO IN THE ASSE SSMENT ORDER DATED 20-02-2014 FRAMED U/S 143(3) OF THE ACT WITH WHICH HE WAS BURDENED FOR INITIATING PENALTY PROCEEDINGS U/S 271 (1)(C) OF THE ACT. WE HAVE ALSO OBSERVED THAT IN THE ORDER DATED 26-08 -2014 PASSED BY THE AO U/S 271(1)(C) OF THE ACT LEVYING PENALTY ON THE ASSESSEE THE AO AFTER CONSIDERING THE EXPLANATION OF THE ASSESSE E HAS CLEARLY RECORDED THE CHARGE ON WHICH PENALTY HAD BEEN LEVIE D ON THE ASSESSEE U/S 271(1)(C) OF THE ACT BY HOLDING AS UN DER : 5. THE ASSESSEES SUBMISSION HAS BEEN CONSIDERED BUT THE SAME IS NOT FOUND ACCEPTABLE. THE ASSESSEE HAS NOT FURNISHED ANY CONCRETE EVIDENCE EITHER DURING ASSESSMENT PROC EEDINGS OR PENALTY PROCEEDINGS WHICH ESTABLISH THAT THERE WAS REASONABLE CAUSE FOR NOT FURNISHING THE ABOVE INCOME IN HIS RE TURN OF INCOME. MERELY BECAUSE THE ASSESSEE IS NOT MAINTAIN ING BOOKS OF ACCOUNTS HE CANNOT GET RID OF OFFERING THE INCO ME EARNED BY HIM DURING THE YEAR. FURTHER THE INCOMES INVOLVED ARE ALSO NOT MEAGER THAT DUE TO OVERSIGHT LEFT TO BE OFFERED. H AD THE ABOVE INCOMES LEFT BY OVERSIGHT THE ASSESSEE WOULD HAVE OFFERED THE SAME ANY TIME AFTER FILING OF RETURN BY FILING REVI SED RETURN. THE ASSESSEES ACT CLEARLY SHOWS HIS INTENTION OF EVADI NG TAX BY NOT DISCLOSING HIS ABOVE INCOMES EITHER IN RETURN OF IN COME OR BY FILING REVISED RETURN LATER ON. EVEN DURING ASSESSM ENT PROCEEDINGS THE ASSESSEE HAS NOT VOLUNTARILY OFFER ED THE SAME FOR TAXATION. IT WAS ONLY WHEN QUERIED BY THE AO TH AT THE ASSESSEE OFFERED THE INCOMES AND FILED REVISED COMP UTATION OF INCOME. FROM THE ABOVE FACTS AND BY THE CONDUCT OF THE ASSESSEE MENS-REA OF THE ASSESSEE IS VERY WELL EST ABLISHED. IN VIEW OF THE FACTS OF THE CASE AND ELABORATE DISCUSS ION IN ASSESSMENT ORDER IT IS HELD THAT THE ASSESSEE HAS CONCEALED INCOME BY FURNISHING INACCURATE PARTICULARS OF INCO ME. THUS THE ASSESSEE HAS COMMITTED DEFAULT U/S. 271(1)(C) OF TH E I.T. ACT AND THE CASE OF THE ASSESSEE IS A FIT CASE FOR LEVY OF PENALTY. UNDER THESE CIRCUMSTANCES AND AS PER DETAILED REASO NING AS SET OUT ABOVE BY US WE DO NOT FIND ANY INFIRMITY IN THE O RDER OF THE A.O. AS WAS CONFIRMED BY LEARNED CIT(A) WE CONFIRM/UPHOLD THE APPELLATE ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 6 ORDER OF LEARNED CIT(A) BY CONFIRMING/SUSTAINING TH E PENALTY OF RS.3 13 000/- U/S 271(1)(C) OF THE ACT. 6. THE LEARNED D.R. HAS ALSO REFERRED TO PAGES 11 & 1 3 AS WELL AS PAGE 19 OF THE SAID ORDER AND ON THAT BASIS HE SUBMITTED THAT NO DOUBT CLAUSE (C) OF SECTION 271(1)(C) DEALS WITH TWO SPECIFIC OF FENCES I.E. CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE FACTS OF SOME CASES MAY ATTRACT BOTH THE OFFENC ES AND IN SOME CASES THERE IS OVERLAPPING OF TWO OFFENCES BUT IN SUCH CA SES THE INITIATION OF PENALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE OFFEN CES. THE LEARNED D.R. ALSO RELIED ON THE ORDER OF THE B BENCH OF THIS T RIBUNAL IN THE CASE OF CHEMPURE VS. ITO DATED 7 TH MAY 2010 IN WHICH THIS TRIBUNAL WHILE INTERPRETING EXPLANATION 1 UNDER PARA 13 OBSERVED A S UNDER: - 13. A CONSPECTUS OF THE EXPLANATION MAKES IT CLEAR THAT THE STATUE VISUALISED THE ASSESSMENT PROCEEDINGS AND PE NALTY PROCEEDINGS TO BE WHOLLY DISTINCT AND INDEPENDENT O F EACH OTHER. IN ESSENCE THE EXPLANATION IS A RULE OF EVIDENCE. PRE SUMPTIONS WHICH ARE REBUTTABLE IN NATURE ARE AVAILABLE TO BE DRAWN. THE INITIAL BURDEN OF DISCHARGING THE ONUS OF REBUTTAL IS ON THE ASSES SEE. THE RATIONALE BEHIND THIS VIEW IS THAT THE BASIC FACTS ARE WITHIN THE SPECIAL KNOWLEDGE OF THE ASSESSEE. SEC. 106 OF THE INDIAN E VIDENCE ACT 1872 GIVES STATUTORY RECOGNITION TO THIS UNIVERSAL LY ACCEPTED RULE OF EVIDENCE. THERE IS NO DISCRETION CONFERRED ON THE A O AS TO WHETHER HE CAN INVOKE THE EXPLANATION OR NOT. ON THAT BASIS IT WAS CONTENDED THAT THE CIT(A) WAS NOT CORRECT IN DELETING THE PENALTY. 7. THE LEARNED D.R. ALSO DRAWN OUR ATTENTION TOWARDS T HE DECISION OF MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565 I N WHICH IT WAS HELD THAT THE FACTS OF SOME CASES MAY ATTRACT BOTH THE O FFENCES. THE CASE OF THE ASSESSEE IS ALSO OF THE SAME AND THEREFORE THE PE NALTY CANNOT BE DELETED ON TECHNICAL GROUNDS. 8. THE LEARNED A.R. ON THE OTHER HAND SUBMITTED BEFO RE US IN THE ASSESSMENT ORDER IT HAS BEEN MENTIONED THAT PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WILL BE INITIATED SEPARATELY. HE HAS ALSO PLACED BEFORE US A COPY OF THE NOTICE ISSUED UNDER SECTION 271(1)(C) I N RESPECT OF EACH OF THE ASSESSMENT YEAR AND ON THAT BASIS IT WAS CONTENDED THAT PENALTY HAS NOT ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 7 BEEN INITIATED FOR ANY PARTICULAR OR SPECIFIC CHARG E. ATTENTION WAS ALSO DRAWN TOWARDS THE PENALTY ORDER AND ON THAT BASIS I T WAS CONTENDED THAT PENALTY HAS BEEN LEVIED BY THE AO FOR BOTH THE CHAR GES I.E. FURNISHING INACCURATE PARTICULARS OF INCOME AS WELL AS CONCEAL MENT OF INCOME. IT IS NOT A CASE WHERE PENALTY HAS BEEN INITIATED FOR BOTH TH E CHARGES. HAD IT BEEN THAT THE AO WOULD HAVE BEEN INITIATED PENALTY FOR B OTH THE CHARGES. THEREFORE THE OBSERVATION MADE BY THE HON'BLE KARNA TAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY ( SUPRA) WITH RESPECT TO INITIATION OF PENALTY FOR BOTH THE CHARGES WILL NOT ARISE. RATHER HE CONTENDED THAT THIS DECISION SUPPORT THE CASE OF TH E ASSESSEE. HE ALSO REFERRED TO THE DECISION OF THE I BENCH OF THIS T RIBUNAL ON WHICH THE LEARNED D.R. HAS VEHEMENTLY RELIED AND HE HAS DRAWN OUR ATTENTION TOWARDS PAGES 11 & 13. REFERRING TO PAGE 11 IT WAS CONTENDED THAT FROM THE SO CALLED SHOW CAUSE NOTICE IT WAS APPARENT THA T THE SHOW CAUSE NOTICE WAS SPECIFICALLY ISSUED BY THE AO. EVEN FROM PAGE 1 3 OF THE ORDER IT IS APPARENT THAT THE AO HAS MENTIONED THAT HE HAS SATI SFIED THAT THE ASSESSEE HAS CONCEALED INCOME BY FURNISHING INACCUR ATE PARTICULARS OF INCOME. THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE AND AGAINST REVENUE BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. SAMSON PERINCHERY [2017] 392 ITR 4 (BOM.). 9. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSID ERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. THE FACTS INVOLVED IN ALL THESE APPEALS ARE UNDISPUTED. IN ALL THESE CASES TH IS IS A FACT THAT IN EACH OF THE ASSESSMENT YEARS THE RETURN OF INCOME IN PU RSUANT TO NOTICE UNDER SECTION 133A WAS FILED BY THE ASSESSEE ON 15.10.200 8 DISCLOSING FOLLOWING INCOME: - A.Y. INCOME ( ` `` ` ) 2002-03 2 40 638/- 2003-04 17 83 423/- 2004-05 9 25 135/- 2005-06 7 09 592/- ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 8 2006-07 8 65 115/- 2007-08 16 63 833/- 2008-09 77 91 704/- AGAINST THESE INCOMES THE AO COMPUTED THE ADDITION AT ` 1 82 50 000/- ASSUMING A DAILY INCOME ` 50 000/- FROM SHRI RAM SOCIAL CLUB 50% SHARE OF WHICH WAS ADDED IN THE CASE OF MR. LAXMICHAND RO HIRA AND BALANCE IN THE HANDS OF THE ASSESSEE BUT IN A.Y. 2008-09 THE A DDITION WAS MADE 50% OF ` 19 43 050/- . WHEN THE MATTER WENT BEFORE THE CIT(A ) THE CIT(A) HAS REDUCED THE DAILY INCOME FROM ` 50 000/- TO ` 13 750/- IN A.Y. 2002-03 AND IN THE SUBSEQUENT ASSESSMENT YEAR ALSO AND ULTIMATE LY GAVE PARTIAL RELIEF IN EACH OF THE ASSESSMENT YEAR. WHEN THE MATTER TRA VELLED TO THE TRIBUNAL THE TRIBUNAL FURTHER DELETED THE ADDITIONS: - A.Y. ADDITION DELETED ( ` `` ` ) 2002-03 26 93 350/- 2003-04 24 35 050/- 2004-05 21 48 050/- 2005-06 18 29 200/- 2006-07 14 75 000/- 2007-08 10 81 250/- 2008-09 1 94 300/- 10. THUS IT IS NOT DENIED THAT ULTIMATELY THE ADDITION SUSTAINED IN THE HANDS OF THE ASSESSEE ARE BASED ON ESTIMATE. WE NOT ED FURTHER THAT IN EACH OF THE CASES THE AO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) DURING THE COURSE OF ASSESSMENT BY OBSERVING IN THE ASSESSMENT ORDER PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE IN ITIATED SEPARATELY. SUBSEQUENTLY NOTICE UNDER SECTION 271(1)(C) WAS ISS UED 23.12.2009 BY OBSERVING AS UNDER: - WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2002-03 IT APPEARS TO ME THAT YOU:- * HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH M E RETURN OF INCOME WHICH YOU WERE REQUIRED TO FURNISH BY A NOTICE GIVE N UNDER SECTION 139 (2)/148 OF THE INCOME TAX ACT 1961 NO. ...... DATED ................ OR HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH IT WITHIN THE TIME ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 9 ALLOWED AND THE MANNER REQUIRED BY THE SAID SECTION 139(1) OR BY SUCH NOTICE. * HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WI TH A NOTICE UNDER SECTION 22(4) / 23(2) OF THE INDIAN INCOME-TAX ACT 1922 OR UNDER SECTION 142(1) / 143(2) OF THE INCOME-TAX ACT 1961 . NO .................. DATED ................................... * HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR ......... FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME WITHIN 7 DAYS FROM RECEIPT OF THIS NOTICE AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE UNDER SECTION 271 OF THE INCOME - TAX ACT 1961 . IF YOU DO NOT WISH TO AVAIL YOURSEL F OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPR ESENTATIVE YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DAT E WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECT ION 271(1)(C). SD/- (PRASOON KABRA) ACIT CC 24 & 26 11. AFTER CONSIDERING THE REPLY OF THE ASSESSEE THE AO LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT BY OBSERVING AS UNDER: - 8. IN VIEW OF THE FACT AND CIRCUMSTANCES MENTION HERE-IN-ABOVE IT IS BEING CONCLUDED THAT ASSESSEE HAS KNOWINGLY FURN ISHED INACCURATE PARTICULARS AND CONCEALED ITS INCOME WITHIN THE MEA NING OF SEC.271(1)(C) OF THE I.T. ACT TO THE TUNE OF RS.50 18 750/- (ADDITION IS PARTLY ALLOWED BY THE LD.CIT(A) IN RESPECT OF CLUB INCOME) AND HENCE IT IS A FIT CASE WHERE PENALTY UNDER SECTION 271(1) (C ) IS REQUIRED TO BE IMPOSED. ACCORDINGLY THE UNDERSIGNED IS PROPOSED T O LEVY PENALTY UNDER SECTION 271(1) (C) IN THIS CASE WHICH IS WORK ED OUT AS UNDER: TAX SOUGHT TO BE EVADED RS.15 37 173/- MINIMUM PENALTY LEVIABLE U/S. 271(1)(C) OF THE I T ACT @ 100% OF THE TAX SOUGHT TO BE EVADED COMES TO RS.5 37 173/- MAXIMUM PENALTY LEVIABLE U/S. 271(1)(C) OF THE I T ACT @ 300% OF THE TAX SOUGHT TO BE EVADED COMES TO RS.46 11 519/- 9. TAKING A BALANCED VIEW ON A WELL SETTLED PRINCIP LE I LEVY MINIMUM PENALTY @100% WHICH WORKS OUT TO RS. 15 37 173/- U/ S.271(1)(C) OF THE INCOME TAX ACT 1961. 12. SIMILARLY PENALTY HAS BEEN LEVIED IN EACH OF THE AS SESSMENT YEARS. WHEN THE MATTER WENT BEFORE THE CIT(A) THE CIT(A) DELETED THE PENALTY IN ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 10 EACH OF THE ASSESSMENT YEARS ON THE BASIS THAT THE AO HAS NOT BROUGHT OUT ANY SPECIFIC CHARGE WHILE LEVYING PENALTY. 13. THE LEARNED D.R. BEFORE US VEHEMENTLY CONTENDED BY REFERRING TO VARIOUS CASE LAWS WHICH WE WILL DISCUSS WHY THE ORD ER OF THE CIT(A) SHOULD BE REVERSED. FIRSTLY HE RELIED ON THE ORDER OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SUSHIL KUMAR SHARAD KUMAR VS. CIT 232 ITR 588. IN THAT CASE WE NOTED THAT THE PENALTY HAS BEEN LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME. THE HON'BLE HIGH COURT CONFI RMED THE LEVY OF PENALTY AS THERE IS EVIDENCE OF HIGHER EXPENDITURE INCURRED BY THE ASSESSEE AND DURING THE PENALTY PROCEEDINGS THE ASSESSEE DID NOT LEAD ANY EVIDENCE TO PROVE THAT THE EXPENDITURE INCURRED BY HIM FOR H OUSEHOLD WERE LOW. THEREFORE UNDER THESE FACTS THE HON'BLE HIGH COURT CONFIRMED THE PENALTY. THIS DECISION IN OUR OPINION IS NOT APPLICABLE TO THE FACTS OF THE CASE BEFORE US. IN THE CASE OF THE ASSESSEE WE NOTED T HE AO HAD NOT LEVIED PENALTY FOR CONCEALMENT OF PARTICULARS OF INCOME. 14. IN THIS REGARD WE MAY REFER TO THE PROVISIONS OF SE CTION 271(1)(C). THIS SECTION EMPOWERS THE AO TO LEVY PENALTY UNDER THESE PROVISIONS IF THE AO IS SATISFIED ANY PERSON HAD CONCEALED PARTICULAR S OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. TH IS MEANS PENALTY CAN BE IMPOSED ON THE ASSESSEE UNDER TWO CIRCUMSTANCES; ONE THE AO FINDS THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCO ME OR THE OTHER CIRCUMSTANCE IS THAT THE AO FINDS THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE WORD UND ER SECTION 271(1)(C) BETWEEN CONCEALED THE PARTICULARS OF HIS INCOME AND FURNISHED INACCURATE PARTICULARS OF SUCH INCOME IS OR NOT AND. THIS DENOTES IF THE ASSESSEE HAS COMMITTED ANY OF THESE TWO DEFAULTS PENALTY UNDER S ECTION 271(1)(C) HAS TO BE IMPOSED BY THE AO. BOTH THESE DEFAULTS AS THE P ROVISION OF 271(1)(C) DENOTES ARE DIFFERENT FROM EACH OTHER ALTHOUGH THE CONSEQUENCE OF BOTH THE DEFAULTS MAY BE THAT THE ASSESSEE HAS CONCEALED INCOME. HOWEVER WE NOTED THAT THERE IS EXPLANATION 1 GIVEN UNDER SECTI ON 271(1)(C) WHICH IS APPLICABLE IN THE CASE OF CONCEALMENT OF PARTICULAR S OF INCOME. IF THE CONTENTIONS STIPULATED UNDER EXPLANATION 1 ARE SATI SFIED IT IS DEEMED THAT ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 11 PARTICULARS OF INCOME HAVE BEEN CONCEALED BY THE AS SESSEE. EXPLANATION 1 NO DOUBT IS REBUTTABLE AND THE ASSESSEE CAN ALWAYS ADDUCE THE EVIDENCE OR PUT THE EXPLANATION TO COME OUT OF THE APPLICABI LITY OF EXPLANATION 1. IN VIEW OF THIS DEEMING PROVISION THE ONUS IS ON THE A SSESSEE TO PROVE THAT HE HAS NOT CONCEALED THE PARTICULARS OF INCOME. SO FAR THE OTHER DEFAULT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME IS C ONCERNED THERE IS NO DEEMING PROVISION AND THE ONUS IN OUR VIEW LIES O N THE REVENUE TO PROVE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICUL ARS OF INCOME AND FOR THAT THE REVENUE IS BOUND TO BRING NECESSARY EVIDEN CE ON RECORD AND PUT THIS EVIDENCE BEFORE THE ASSESSEE SO THAT THE ASSES SEE CAN COUNTER THEM AND RULE OF NATURAL JUSTICE IS NOT VIOLATED. SINCE BOTH THE DEFAULTS ARE DIFFERENT THEREFORE THE LEGISLATURE IN OUR OPINI ON HAS USED THE WORD BETWEEN BOTH THE DEFAULTS OR INSTEAD OF AND. WE CANNOT TAKE THE VIEW THAT THE ASSESSEE HAS COMMITTED BOTH THE DEFAULTS T OGETHER ALTHOUGH THE NATURE OF CONSEQUENCE OF BOTH THE DEFAULTS IS ONE I.E. CONCEALMENT OF INCOME. THE ONLY COMMON ATTRIBUTE BETWEEN BOTH THE DEFAULTS IS THE PARTICULARS. 15. WE HAVE ALSO GONE THROUGH THE DECISION OF THE I B ENCH OF THIS TRIBUNAL IN THE CASE OF SHRI MAHESH M. GANDHI VS. A CIT ITA NO. 2976/MUM/2016. WE NOTED THAT IN THIS DECISION THE T RIBUNAL HAS CONFIRMED THE PENALTY AS NOTICE HAS NOT BEEN ISSUE D IN STANDARD PRINTED FORMAT RATHER THE SAME HAS BEEN SPECIFICALLY BEEN DRAFTED BY THE AO BEFORE SENDING NOTICE TO THE ASSESSEE AND THEREFORE THE TRIBUNAL WAS OF THE VIEW THAT BEFORE INITIATING THE PENALTY THE AO HAS APPLIED HIS MIND. THE TRIBUNAL WAS ALSO AWARE THAT IN THE CASE WHERE THE AO HAS FRAMED CHARGE UNDER ONE LIMB OF SECTION 271(1)(C) BUT LEVIED PENA LTY UNDER THE OTHER LIMB OF SECTION 271(1)(C). THIS FACT IS CLEAR FROM THE F INDINGS OF THE TRIBUNAL WHICH ARE REPRODUCED AS UNDER: - WE DO NOT FIND ANY INFIRMITY IN THE NOTICE DATED 2 0-02-2014 ISSUED BY THE A.O. U/S 271(1)(C) R.W.S. 274 OF THE ACT WHE REIN THE AO HAS CLEARLY FRAMED AN ALTERNATE CHARGES FOR LEVYING PEN ALTY U/S 271(1)(C) OF THE ACT AT THE STAGE OF ISSUE OF NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT. MORE-SO IT IS NOT A STANDARD PRINTED FORMAT WH ICH IS SENT TO THE ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 12 ASSESSEE RATHER THE SAME IS SPECIFICALLY DRAFTED BY THE AO BEFORE SENDING TO THE ASSESSEE WHICH SHOWED APPLICATION OF MIND BY THE AO. IT IS ALSO NOT THE CASE THAT THE AO HAS FRAMED CHAR GE UNDER ONE LIMB OF SECTION 271(1)(C) OF THE ACT AND LEVIED THE PENA LTY UNDER THE SECOND LIMB OF SECTION 271(1)(C) OF THE ACT. THE ASSESSMEN T ORDER DATED 20- 02-2014 ALSO CLEARLY SHOWED APPLICATION OF MIND BY THE AO BEFORE INITIATING PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. 16. IN THAT CASE WE NOTED THE TRIBUNAL ALSO FOUND TH AT THE AO BEFORE INITIATING PENALTY PROCEEDINGS DURING THE COURSE OF ASSESSMENT RECORDED HIS SATISFACTION IN DETAIL AND THAT WAS NOT THE CAS E WHERE NO SATISFACTION HAS BEEN RECORDED WITH REFERENCE TO THE CHARGE TO B E LEVIED ON THE ASSESSEE. EVEN WE NOTED THAT THE TRIBUNAL IN THAT D ECISION DID NOT APPRECIATE THE NOTICE ISSUED BY THE AO EVEN THOUGH IT WAS SPECIFICALLY BEEN DRAFTED BY THE AO. THE AO HAS NOT BROUGHT OUT ANY S PECIFIC CHARGE BUT CONFIRMED THE PENALTY LEVIED ON THE ASSESSEE. WE NO TED THAT IN THAT CASE THE TRIBUNAL MAINLY REFERRED TO THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565. IN THAT DECISION WE NOTED THE HON'BLE HIGH COURT UNDER PARA 50 HAS CLEARLY MENTIONED AS UNDER: - 50. A READING OF SECTION CLEARLY INDICATES THAT THE ASSESSMENT ORDER SHOULD CONTAIN A DIRECTION FOR INITIATION OF PENALT Y PROCEEDINGS. THE MEANING OF THE WORD DIRECTION IS OF IMPORTANCE. MER ELY SAYING THAT PENALTY PROCEEDINGS ARE BEING INITIATED WILL NOT SA TISFY THE REQUIREMENT. THE DIRECTION TO INITIATE PROCEEDINGS SHOULD BE CLEAR AND NOT BE AMBIGUOUS. IT IS WELL SETTLED LAW THAT FISCA L STATUTES ARE TO BE CONSTRUED STRICTLY AND MORE SO THE DEEMING PROVISIO NS BY WAY OF LEGAL FICTION ARE TO BE CONSTRUED MORE STRICTLY. THEY HAV E TO BE INTERPRETED ONLY FOR THE SAID ISSUE FOR WHICH IT HAS DEEMED AND THE MANNER IN WHICH THE DEEMING HAS BEEN CONTEMPLATED TO BE RESTR ICTED IN THE MANNER SOUGHT TO BE DEEMED. AS THE WORDS USED IN TH E LEGAL FICTION OR THE DEEMING PROVISIONS OF SECTION 271(1B) IS DIRECT ION IT IS IMPERATIVE THAT THE ASSESSMENT ORDER CONTAINS A DIRECTION. USE OF THE PHRASES LIKE (A) PENALTY PROCEEDINGS ARE BEING INITIATED SE PARATELY AND (B) PENALTY PROCEEDINGS UNDER SECTION 271(L)(C) ARE INI TIATED SEPARATELY DO NOT COMPLY WITH THE MEANING OF THE WORD DIRECTIO N AS CONTEMPLATED EVEN IN THE AMENDED PROVISIONS OF LAW. THE DIRECTIO N SHOULD BE CLEAR AND WITHOUT ANY AMBIGUITY. THE WORD 'DIRECTION' HAS BEEN INTERPRETED BY THE DECISION OF THE APEX COURT IN THE CASE OF RA JENDRANATH 120 ITR PG.14 WHERE IT HAS BEEN HELD THAT IN ANY EVENT WHAT EVER ELSE IT MAY AMOUNT TO ON ITS VERY TERMS THE OBSERVATION THAT T HE ITO IS FREE TO TAKE ACTION TO ASSESS THE EXCESS IN THE HAND OF TH E CO-OWNERS CANNOT ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 13 BE DESCRIBED AS A DIRECTION. A DIRECTION BY A STATU TORY AUTHORITY IS IN THE NATURE OF AN ORDER REQUIRING POSITIVE COMPLIANC E. WHEN IT IS LEFT TO THE OPTION AND DISCRETION OF THE ITO WHETHER OR NOT TAKE ACTION IT CANNOT BE DESCRIBED AS A DIRECTION. 51. THEREFORE IT IS SETTLED LAW THAT IN THE ABSENC E OF THE EXISTENCE OF THESE CONDITIONS IN THE ASSESSMENT ORDER PENALTY PR OCEEDINGS COULD NOT BE PROCEEDED WITH. THE PROCEEDINGS WHICH ARE IN ITIATED CONTRARY TO THE SAID LEGAL POSITION ARE LIABLE TO BE SET ASI DE. 17. IF THE FINDING GIVEN BY THE HON'BLE HIGH COURT WHI CH HAS BEEN REFERRED TO BY THE BENCH IN THAT CASE HEAVILY RELIE D BY THE LEARNED D.R. ARE APPLICABLE TO THE IMPUGNED CASE OF THE ASSESSEE. WE FIND THAT IN THE CASE OF THE IMPUGNED ASSESSEE THE AO WHILE INITIATING PENAL TY HAS SIMPLY OBSERVED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE IN ITIATED SEPARATELY. THE HON'BLE KARNATAKA HIGH COURT AS HAS BEEN RELIED UP ON BY THE I BENCH WHILE CONFIRMING THE PENALTY IN THE CASE OF MANJUNA THA COTTON AND GINNING FACTORY (SUPRA) HAS CLEARLY HELD THAT MEREL Y SAYING THE PENALTY PROCEEDINGS ARE INITIATED WILL NOT SATISFY THE REQU IREMENT WITH REGARD TO THE DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS. NO T ONLY THIS WE NOTED IN THE DECISION THE HON'BLE MEMBER HAS NOT APPRECIATED THE FINDINGS GIVEN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . SAMSON PERINCHERY (SUPRA) . IN THAT CASE THE QUESTION BEFORE THE HON 'BLE HIGH COURT WAS WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE TRIBUNAL WAS JUSTIFIED IN DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961? WHILE DECIDING THIS ISSUE THE HON'BLE HIGH COURT OBSERVED AS UNDER: - 3 THE IMPUGNED ORDER OF THE TRIBUNAL DELETED THE P ENALTY IMPOSED UPON THE RESPONDENT ASSESSEE. THIS BY HOLDING THAT THE INITIATION OF PENALTY UNDER SECTION 271 (1)(C) OF THE ACT BY ASSE SSING OFFICER WAS FOR FURNISHING INACCURATE PARTICULARS OF INCOME WHI LE THE ORDER IMPOSING PENALTY IS FOR CONCEALMENT OF INCOME. THE IMPUGNED ORDER HOLDS THAT THE CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THEREFORE THE ASSESSING OFFICER SHOULD BE CLEAR AS TO WHICH OF TH E TWO LIMBS UNDER WHICH PENALTY IS IMPOSABLE HAS BEEN CONTRAVENED OR INDICATE THAT BOTH HAVE BEEN CONTRAVENED WHILE INITIATING PENALTY PROCEEDINGS. IT CANNOT BE THAT THE INITIATION WOULD BE ONLY ON ONE LIMB I.E. FOR FURNISHING INACCURATE PARTICULARS OF INCOME WHILE I MPOSITION OF PENALTY ON THE OTHER LIMB I.E. CONCEALMENT OF INCOME. FURTH ER THE TRIBUNAL ALSO ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 14 NOTED THAT NOTICE ISSUED UNDER SECTION 274 OF THE A CT IS IN A STANDARD PROFORMA WITHOUT HAVING STRIKED OUT IRRELEVANT CLA USES THEREIN. THIS INDICATES NON-APPLICATION OF MIND ON THE PART OF TH E ASSESSING OFFICER WHILE ISSUING THE PENALTY NOTICE. 4 THE IMPUGNED ORDER RELIED UPON THE FOLLOWING EXTR ACT OF KARNATAKA HIGH COURT'S DECISION IN CIT V/S. MANJUNATH COTTON AND GINNING FACTORY 359 ITR 565 TO DELETE THE PENALTY: THE ASSESSING OFFICER IS EMPOWERED UNDER THE ACT T O 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 ISSUIN G NOTICE HAS TO COME TO THE CONCLUSION THAT WHETHER IS IT A CASE OF CONCEALMENT OF INCOME OR IS IT AS CASE OF FURNISHIN G OF INACCURATE PARTICULARS. THE APEX COURT IN THE CASE OF ASHOK PAI REPORTED IN [2007] 292 ITR 11 (SC) AT PAGE 19 HAS H ELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURATE PAR TICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THE GUJARAT HI GH COURT IN THE CASE OF MANU ENGINEERING REPORTED IN 122 ITR 30 6 AND THE DELHI HIGH COURT IN THE CASE OF VIRGO MARKETING P. LTD. REPORTED IN 171 TAXMN 156 HAS HELD THAT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSIT ION BEING UNCLEAR PENALTY IS NOT SUSTAINABLE. THEREFORE WHEN THE ASSESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT THEN THE NOTICE HAS TO BE APPROPRIATEL Y MARKED. SIMILAR IS THE CASE FOR FURNISHING INACCURATE PARTI CULARS OF INCOME. THE STANDARD PROFORMA WITHOUT STRIKING OF T HE RELEVANT CLAUSES WILL LEAD TO AN INFERENCE AS TO NONAPPLICAT ION OF MIND. 5. THE GRIEVANCE OF THE REVENUE BEFORE US IS THAT T HERE IS NO DIFFERENCE BETWEEN FURNISHING OF INACCURATE PARTICULARS OF INC OME AND CONCEALMENT OF INCOME. THUS DISTINCTION DRAWN BY T HE IMPUGNED ORDER IS BETWEEN TWEEDLEDUM AND TWEEDLEDEE. IN THE ABOVE VIEW THE DELETION OF THE PENALTY IS UNJUSTIFIED. 6. THE ABOVE SUBMISSION ON THE PART OF THE REVENUE IS IN THE FACE OF THE DECISION OF THE SUPREME COURT IN ASHOK PAI V/S. CIT 292 ITR 11 [RELIED UPON IN MANJUNATH COTTON & GINNING FACTORY (SUPRA)] WHEREIN IT IS OBSERVED THAT CONCEALMENT OF INCOME AND FURNI SHING OF INACCURATE PARTICULARS OF INCOME IN SECTION 271(1)(C) OF THE A CT CARRY DIFFERENT MEANINGS/ CONNOTATIONS. THEREFORE THE SATISFACTION OF THE ASSESSING OFFICER WITH REGARD TO ONLY ONE OF THE TWO BREACHES MENTIONED UNDER SECTION 271(1)(C) OF THE ACT FOR INITIATION OF PEN ALTY PROCEEDINGS WILL NOT WARRANT/ PERMIT PENALTY BEING IMPOSED FOR THE O THER BREACH. THIS IS MORE SO AS AN ASSESSEE WOULD RESPOND TO THE GRO UND ON WHICH THE PENALTY HAS BEEN INITIATED/NOTICE ISSUED. IT MUST THEREFORE FOLLOW THAT THE ORDER IMPOSING PENALTY HAS TO BE MADE ONLY ON THE GROUND OF ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 15 WHICH THE PENALTY PROCEEDINGS HAS BEEN INITIATED A ND IT CANNOT BE ON A FRESH GROUND OF WHICH THE ASSESSEE HAS NO NOTICE. 7 THEREFORE THE ISSUE HEREIN STANDS CONCLUDED IN F AVOUR OF THE RESPONDENT ASSESSEE BY THE DECISION OF THE KARNATAK A HIGH COURT IN THE CASE OF MANJUNATH COTTON AND GINNING FACTORY (S UPRA). NOTHING HAS BEEN SHOWN TO US IN THE PRESENT FACTS WHICH WOU LD WARRANT OUR TAKING A VIEW DIFFERENT FROM THE KARNATAKA HIGH COU RT IN THE CASE OF MANJUNATH COTTON AND GINNING FACTORY (SUPRA). ULTIMATELY IT WAS HELD THAT THE QUESTION AS FRAMED DO NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. THEREFORE THE FINDING GIVEN BY THE TRIBUNAL THAT PENALTY MUST BE INITIATED FOR SPECIFIC CHARGE HAS BEEN CONFIRMED. EVEN THE FINDING OF THE TRIBUNAL THAT THE NOTICE ISSUED UNDER SECTION 274 OF THE ACT IS IN A STANDARD PROFORMA WITHOUT HAVING STRIK ED OUT IRRELEVANT CLAUSES THEREIN REPRESENT NON-APPLICATION OF MIND O N THE PART OF THE AO WHILE ISSUING PENALTY NOTICE HAS NOT BEEN DISTURBED . 18. WE NOTED THAT HON'BLE C BENCH IN ITA NOS. 1597 & 1597/MUM/ 2014 IN THE CASE OF M/S. ORBIT ENTERPRISES VS. INC OME TAX OFFICER 15(2)(2) MUMBAI HAD A CHANCE TO DECIDE WHETHER PENALTY CAN B E LEVIED WHEN PENALTY HAS NOT BEEN INITIATED FOR A SPECIFIC CHARG E. THE COORDINATE BENCH VIDE ITS ORDER DATED 01.09.2017 IN THIS REGARD HELD AS UNDER: - 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. SEC. 271(1)(C) OF THE ACT POSTULATES THAT PENALTY PRESCR IBED THEREIN CAN BE LEVIED ON EXISTENCE OF ANY OF THE TWO SITUATIONS N AMELY FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISH ING INACCURATE PARTICULARS OF SUCH INCOME. IT HAS BEEN JUDICIALLY WELL UNDERSTOOD BY NOW THAT CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME REFERRED TO IN SE C. 271(1)(C) OF THE ACT DENOTE TWO DIFFERENT CONNOTATIONS. AS A READY REFE RENCE FOR THE AFORESAID PROPOSITION WE MAY LOOK UPON THE JUDGMEN TS OF THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF 161 T AXMAN 218 (SC) AND ALSO T. ASHOK PAI 292 ITR 11 (SC) TO APPRECIAT E THAT THE AFORESAID TWO EXPRESSIONS CONVEY DIFFERENT CONNOTAT IONS. HAVING UNDERSTOOD THAT THE TWO EXPRESSIONS HAVE DIFFERENT CONNOTATIONS THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MEHERJE E CASSINATH HOLDINGS PVT. LTD. (SUPRA) WHEREIN ONE OF US IS A PARTY HELD THAT IT WAS IMPERATIVE FOR THE ASSESSING OFFICER TO MAKE TH E ASSESSEE AWARE IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF TH E ACT AS TO WHICH OF THE TWO LIMBS ARE BEING PUT-UP AGAINST HIM FOR THE PURPOSES OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. OSTENSIBLY UNLE SS THE ASSESSEE IS MADE AWARE OF THE SPECIFIC CHARGE AGAINST HIM IT W OULD BE VIOLATIVE ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 16 OF THE PRINCIPLES OF NATURAL JUSTICE INASMUCH AS TH E ASSESSEE WOULD NOT BE IN A POSITION TO PUT UP HIS DEFENCE APPROPRI ATELY. IT IS IN THIS MANNER ONE HAS TO APPRECIATE THE POINT BEING CANVAS SED BY THE ASSESSEE BEFORE US WHICH IS BASED ON THE TONE AND TENOR OF THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 22 .12.2008 A COPY OF WHICH HAS BEEN PLACED ON RECORD. NOTABLY THE RELE VANT DISCUSSION MADE BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CAS E OF MEHERJEE CASSINATH HOLDINGS PVT. LTD. (SUPRA) IS AS UNDER :- 8. .............. IT IS ALSO A WELL ACCEPTED PROPO SITION THAT CONCEALMENT OF THE PARTICULARS OF INCOME AND FUR NISHING OF INACCURATE PARTICULARS OF INCOME REFERRED TO IN SE C. 271(1)(C) OF THE ACT DENOTE DIFFERENT CONNOTATIONS. IN FACT TH IS DISTINCTION HAS BEEN APPRECIATED EVEN AT THE LEVEL OF HON'BLE S UPREME COURT NOT ONLY IN THE CASE OF DILIP N. SHROFF (SUPR A) BUT ALSO IN THE CASE OF T.ASHOK PAI 292 ITR 11 (SC). THEREFOR E IF THE TWO EXPRESSIONS NAMELY CONCEALMENT OF THE PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME HAVE DIFFERENT CONNOTATIONS IT IS IMPERATIVE FOR THE AS SESSEE TO BE MADE AWARE AS TO WHICH OF THE TWO IS BEING PUT AGAI NST HIM FOR THE PURPOSE OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT SO THAT THE ASSESSEE CAN DEFEND ACCORDINGLY. IT IS IN THIS BACKGROUND THAT ONE HAS TO APPRECIATE THE PRELIMINARY PLEA OF ASSESSEE WHICH IS BASED ON THE MANNER IN WHICH THE NOTICE U/ S 274 R.W.S. 271(1)(C) OF THE ACT DATED 10.12.2010 HAS BE EN ISSUED TO THE ASSESSEE-COMPANY. A COPY OF THE SAID NOTICE HA S BEEN PLACED ON RECORD AND THE LEARNED REPRESENTATIVE CAN VASSED THAT THE SAME HAS BEEN ISSUED BY THE ASSESSING OFFICER I N A STANDARD PROFORMA WITHOUT STRIKING OUT THE IRRELEV ANT CLAUSE. IN OTHER WORDS THE NOTICE REFERS TO BOTH THE LIMBS OF SEC. 271(1)(C) OF THE ACT NAMELY CONCEALMENT OF THE PAR TICULARS OF INCOME AS WELL AS FURNISHING OF INACCURATE PARTICUL ARS OF INCOME. QUITE CLEARLY NON-STRIKING-OFF OF THE IRR ELEVANT LIMB IN THE SAID NOTICE DOES NOT CONVEY TO THE ASSESSEE AS TO WHICH OF THE TWO CHARGES IT HAS TO RESPOND. THE AFORESAID I NFIRMITY IN THE NOTICE HAS BEEN SOUGHT TO BE DEMONSTRATED AS A REFLECTION OF NON-APPLICATION OF MIND BY THE ASSESSING OFFICER A ND IN SUPPORT REFERENCE HAS BEEN MADE TO THE FOLLOWING S PECIFIC DISCUSSION IN THE ORDER OF HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA):- 83. IT IS OF SOME SIGNIFICANCE THAT IN THE STANDAR D PROFORMA USED BY THE ASSESSING OFFICER IN ISSUING A NOTICE D ESPITE THE FACT THAT THE SAME POSTULATES THAT INAPPROPRIATE WO RDS 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 ASSE SSEE HAD CONCEALED HIS INCOME OR HE HAD FURNISHED INACCURATE PARTICULARS. EVEN BEFORE US THE LEARNED ADDITIONA L SOLICITOR ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 17 GENERAL WHILE PLACING THE ORDER OF ASSESSMENT LAID EMPHASIS THAT HE HAD DEALT WITH BOTH THE SITUATIONS. 84. THE IMPUGNED ORDER THEREFORE SUFFERS FROM NON - APPLICATION OF MIND. IT WAS ALSO BOUND TO COMPLY W ITH THE PRINCIPLES OF NATURAL JUSTICE. (SEE MALABAR INDUSTR IAL CO. LTD. V. CIT [2000] 2 SCC 718] 9. FACTUALLY SPEAKING THE AFORESAID PLEA OF ASSESS EE IS BORNE OUT OF RECORD AND HAVING REGARD TO THE PARITY OF REASONING LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) THE NOTICE IN THE INSTANT CASE DOES SUFFER FROM THE VICE OF NON-APPLICATION OF MIND BY THE ASSESSIN G OFFICER. IN FACT A SIMILAR PROPOSITION WAS ALSO ENUNCIATED BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF M/S. SSAS EMER ALD MEADOWS (SUPRA) AND AGAINST SUCH A JUDGMENT THE SP ECIAL LEAVE PETITION FILED BY THE REVENUE HAS SINCE BEEN DISMISSED BY THE HON'BLE SUPREME COURT VIDE ORDER DATED 5.8.2 016 A COPY OF WHICH IS ALSO PLACED ON RECORD. 10. IN FACT AT THE TIME OF HEARING THE LD. CIT-DR HAS NOT DISPUTED THE FACTUAL MATRIX BUT SOUGHT TO POINT OU T THAT THERE IS DUE APPLICATION OF MIND BY THE ASSESSING OFFICER WH ICH CAN BE DEMONSTRATED FROM THE DISCUSSION IN THE ASSESSMENT ORDER WHEREIN AFTER DISCUSSING THE REASONS FOR THE DISALL OWANCE HE HAS RECORDED A SATISFACTION THAT PENALTY PROCEEDING S ARE INITIATED U/S 271(1)(C) OF THE ACT FOR FURNISHING O F INACCURATE PARTICULARS OF INCOME. IN OUR CONSIDERED OPINION THE ATTEMPT OF THE LD. CIT-DR TO DEMONSTRATE APPLICATION OF MIND B Y THE ASSESSING OFFICER IS NO DEFENCE INASMUCH AS THE HON 'BLE SUPREME COURT HAS APPROVED THE FACTUM OF NON-STRIKI NG OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE AS REFLECTIVE O F NON- APPLICATION OF MIND BY THE ASSESSING OFFICER. SINC E THE FACTUAL MATRIX IN THE PRESENT CASE CONFORMS TO THE PROPOSIT ION LAID DOWN BY THE HON'BLE SUPREME COURT WE PROCEED TO RE JECT THE ARGUMENTS ADVANCED BY THE LD. CIT-DR BASED ON THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESS MENT ORDER. FURTHER IT IS ALSO NOTICEABLE THAT SUCH PROPOSITIO N HAS BEEN CONSIDERED BY THE HON'BLE BOMBAY HIGH COURT ALSO IN THE CASE OF SHRI SAMSON PERINCHERY ITA NOS. 1154 953 1097 & 1126 OF 2014 DATED 5.1.2017 (SUPRA) AND THE DECISION OF THE TRIBUNAL HOLDING LEVY OF PENALTY IN SUCH CIRCUMSTANCES BEING BAD HAS BEEN APPROVED. 11. APART FROM THE AFORESAID THE LD. CIT-DR MADE A N ARGUMENT BASED ON THE DECISION OF THE HON'BLE BOMBA Y HIGH COURT IN THE CASE OF SMT. KAUSHALYA & OTHERS 216 I TR 660 (BOM.) TO CANVASS SUPPORT FOR HIS PLEA THAT NON-STR IKING OFF OF THE IRRELEVANT PORTION OF NOTICE WOULD NOT INVALIDA TE THE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. WE HAVE CAREFULLY ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 18 CONSIDERED THE SAID ARGUMENT SET-UP BY THE LD. CIT- DR AND FIND THAT A SIMILAR ISSUE HAD COME UP BEFORE OUR COORDIN ATE BENCH IN THE CASE OF DR. SARITA MILIND DAVARE (SUPRA). OUR COORDINATE BENCH AFTER CONSIDERING THE JUDGMENT OF THE HON'BL E BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALYA & ORS. (S UPRA) AS ALSO THE JUDGMENTS OF THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) AND DHARMENDRA TEXTILE PROC ESSORS 306 ITR 277 (SC) DEDUCED AS UNDER :- 12. A COMBINED READING OF THE DECISION RENDERED BY HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT. B KAUSHALYA A ND OTHERS (SUPRA) AND THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF DILIP N SHROFF (SUPRA) WOULD M AKE IT CLEAR THAT THERE SHOULD BE APPLICATION OF MIND ON THE PAR T OF THE AO AT THE TIME OF ISSUING NOTICE. IN THE CASE OF LAKHDIR LALJI (SUPRA) THE AO ISSUED NOTICE U/S 274 FOR CONCEALMENT OF PA RTICULARS OF INCOME BUT LEVIED PENALTY FOR FURNISHING INACCURAT E PARTICULARS OF INCOME. THE HONBLE GUJARAT HIGH COURT QUASHED T HE PENALTY SINCE THE BASIS FOR THE PENALTY PROCEEDINGS DISAPPE ARED WHEN IT WAS HELD THAT THERE WAS NO SUPPRESSION OF INCOME. T HE HONBLE KERALA HIGH COURT HAS STRUCK DOWN THE PENALTY IMPOS ED IN THE CASE OF N.N.SUBRAMANIA IYER VS. UNION OF INDIA (SU PRA) WHEN THERE IS NO INDICATION IN THE NOTICE FOR WHAT CONTR AVENTION THE PETITIONER WAS CALLED UPON TO SHOW CAUSE WHY A PENA LTY SHOULD NOT BE IMPOSED. IN THE INSTANT CASE THE AO DID NOT SPECIFY THE CHARGE FOR WHICH PENALTY PROCEEDINGS WERE INITIATED AND FURTHER HE HAS ISSUED A NOTICE MEANT FOR CALLING THE ASSESS EE TO FURNISH THE RETURN OF INCOME. HENCE IN THE INSTANT CASE T HE ASSESSING OFFICER DID NOT SPECIFY THE CHARGE FOR WHICH THE PE NALTY PROCEEDINGS WERE INITIATED AND ALSO ISSUED AN INCOR RECT NOTICE. BOTH THE ACTS OF THE AO IN OUR VIEW CLEARLY SHOW THAT THE AO DID NOT APPLY HIS MIND WHEN HE ISSUED NOTICE TO THE ASSESSEE AND HE WAS NOT SURE AS TO WHAT PURPOSE THE NOTICE W AS ISSUED. THE HONBLE BOMBAY HIGH COURT HAS DISCUSSED ABOUT N ON- APPLICATION OF MIND IN THE CASE OF KAUSHALYA (SUPR A) AND OBSERVED AS UNDER:- ....THE NOTICE CLEARLY DEMONSTRATED NON-APPLICATIO N OF MIND ON THE PART OF THE INSPECTING ASSISTANT COMMISSIONER. THE VAGUENESS AND AMBIGUITY IN THE NOTICE HAD ALSO PREJ UDICED THE RIGHT OF REASONABLE OPPORTUNITY OF THE ASSESSEE SIN CE HE DID NOT KNOW WHAT EXACT CHARGE HE HAD TO FACE. IN THIS BACK GROUND QUASHING OF THE PENALTY PROCEEDINGS FOR THE ASSESSM ENT YEAR 1967-68 SEEMS TO BE FULLY JUSTIFIED. IN THE INSTANT CASE ALSO WE ARE OF THE VIEW THAT T HE AO HAS ISSUED A NOTICE THAT TOO INCORRECT ONE IN A ROUTI NE MANNER. FURTHER THE NOTICE DID NOT SPECIFY THE CHARGE FOR W HICH THE PENALTY NOTICE WAS ISSUED. HENCE IN OUR VIEW THE AO HAS ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 19 FAILED TO APPLY HIS MIND AT THE TIME OF ISSUING PEN ALTY NOTICE TO THE ASSESSEE. 12. THE AFORESAID DISCUSSION CLEARLY BRINGS OUT AS TO THE REASONS WHY THE PARITY OF REASONING LAID DOWN BY TH E HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA ) IS TO PREVAIL. FOLLOWING THE DECISION OF OUR COORDINATE BENCH IN T HE CASE OF DR. SARITA MILIND DAVARE (SUPRA) WE HEREBY REJECT THE AFORESAID ARGUMENT OF THE LD. CIT-DR. 13. APART FROM THE AFORESAID DISCUSSION WE MAY ALS O REFER TO THE ONE MORE SEMINAL FEATURE OF THIS CASE WHICH WOU LD DEMONSTRATE THE IMPORTANCE OF NON-STRIKING OFF OF I RRELEVANT CLAUSE IN THE NOTICE BY THE ASSESSING OFFICER. AS NOTED EARLIER IN THE ASSESSMENT ORDER DATED 10.12.2010 THE ASSESS ING OFFICER RECORDS THAT THE PENALTY PROCEEDINGS U/S 27 1(1)(C) OF THE ACT ARE TO BE INITIATED FOR FURNISHING OF INACCURAT E PARTICULARS OF INCOME. HOWEVER IN THE NOTICE ISSUED U/S 274 R.W. S. 271(1)(C) OF THE ACT OF EVEN DATE BOTH THE LIMBS OF SEC. 271 (1)(C) OF THE ACT ARE REPRODUCED IN THE PROFORMA NOTICE AND THE IRREL EVANT CLAUSE HAS NOT BEEN STRUCK-OFF. QUITE CLEARLY THE OBSERV ATION OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND NON-S TRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE CLEARLY BRIN GS OUT THE DIFFIDENCE ON THE PART OF ASSESSING OFFICER AND THE RE IS NO CLEAR AND CRYSTALLISED CHARGE BEING CONVEYED TO THE ASSES SEE U/S 271(1)(C) WHICH HAS TO BE MET BY HIM. AS NOTED BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA ) THE QUASI- CRIMINAL PROCEEDINGS U/S 271(1)(C) OF THE ACT OUGHT TO COMPLY WITH THE PRINCIPLES OF NATURAL JUSTICE AND IN THE PRESENT CASE CONSIDERING THE OBSERVATIONS OF THE ASSESSING OFFIC ER IN THE ASSESSMENT ORDER ALONGSIDE HIS ACTION OF NON-STRIKI NG OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE SHOWS THAT THE CHAR GE BEING MADE AGAINST THE ASSESSEE QUA SEC. 271(1)(C) OF THE ACT IS NOT FIRM AND THEREFORE THE PROCEEDINGS SUFFER FROM NO N-COMPLIANCE WITH PRINCIPLES OF NATURAL JUSTICE INASMUCH AS THE ASSESSING OFFICER IS HIMSELF UNSURE AND ASSESSEE IS NOT MADE AWARE AS TO WHICH OF THE TWO LIMBS OF SEC. 271(1)(C) OF THE ACT HE HAS TO RESPOND. 14. THEREFORE IN VIEW OF THE AFORESAID DISCUSSION IN OUR VIEW THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 10.12.2010 IS UNTENABLE AS IT SUFFERS FROM THE VICE OF NON-APPLICATION OF MIND HAVING REG ARD TO THE RATIO OF THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) AS WELL AS THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHRI SAMSON PERINC HERY (SUPRA). THUS ON THIS COUNT ITSELF THE PENALTY IMP OSED U/S 271(1)(C) OF THE ACT IS LIABLE TO BE DELETED. WE HO LD SO. SINCE THE ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 20 PENALTY HAS BEEN DELETED ON THE PRELIMINARY POINT THE OTHER ARGUMENTS RAISED BY THE APPELLANT ARE NOT BEING DEA LT WITH. THEREFORE IN VIEW OF THE AFORESAID DISCUSSION IN OUR VIEW THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 274 R.W.S. 271( 1)(C) OF THE ACT DATED 22.12.2008 IS UNTENABLE AND SUFFERS FROM THE INFIRMITY OF NON- APPLICATION OF MIND BY THE ASSESSING OFFICER. ON T HIS COUNT ITSELF IN OUR VIEW THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT DESERVES TO BE DELETED. 13. AT THIS POINT WE MAY ALSO MAKE A REFERENCE TO THE JUDGMENT OF THE HON'BLE PATNA HIGH COURT RELIED BY THE LD. CIT- DR BEFORE US. THE ISSUE BEFORE THE HON'BLE PATNA HIGH COURT WAS RELAT ING TO LEVY OF PENALTY FOR SHORTFALL IN THE PAYMENT OF ADVANCE TAX PAID AS COMPARED WITH THE TAX FINALLY ASSESSED AS PAYABLE BUT IN TH E NOTICE ISSUED U/S 274 R.W.S. 273(B) OF THE ACT IT WAS INCORRECTLY MEN TIONED THAT ASSESSEE HAD FAILED TO FILE ITS ESTIMATE OF ADVANCE TAX. THE HON'BLE PATNA HIGH COURT HELD THAT MENTION OF SUCH INCORREC T CHARGE WOULD NOT RENDER THE PENALTY PROCEEDINGS VOID-AB-INITIO. THE AFORESAID PARITY OF REASONING HAS BEEN RELIED UPON BY THE LD. CIT-DR BEFORE US TO STATE THAT NON-STRIKING OFF OF THE IRRELEVANT PO RTION OF THE NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT DOES NOT RENDER THE PROCEEDINGS INVALID. IN OUR VIEW THE SAID DECISION DOES NOT HELP THE CA SE OF THE REVENUE QUA THE ISSUE BEFORE US. FIRSTLY THE HON'BLE PATN A HIGH COURT ITSELF NOTED THAT IT WAS A CASE OF MERE WRONG LABELLING O F THE SECTION OR SOME MISTAKE IN THE CHARGE FRAMED AGAINST THE ASSES SEE WHICH DOES NOT PREJUDICE THE ASSESSEE. SECONDLY NON-STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE U/S 274 R.W.S. 271(1)(C) OF TH E ACT HAS BEEN COMPLETELY DIFFERENTLY UNDERSTOOD BY THE VARIOUS HI GH COURTS INCLUDING THAT BY THE HON'BLE JURISDICTIONAL HIGH C OURT OF BOMBAY. IN THE CASE OF SHRI SAMSON PERINCHERY (SUPRA) THE HON BLE BOMBAY HIGH COURT NOTED THAT THE ORDER IMPOSING PENALTY U/S 271 (1)(C) OF THE ACT HAS TO BE MADE ONLY ON THE GROUND ON WHICH THE PENA LTY PROCEEDINGS HAVE BEEN INITIATED. IN THE CASE OF SHRI SAMSON PE RINCHERY (SUPRA) THE REVENUE HAD PUT UP AN ARGUMENT TO THE EFFECT TH AT THERE IS NO DIFFERENCE BETWEEN FURNISHING OF INACCURATE PARTICU LARS OF INCOME AND CONCEALMENT OF INCOME. THE AFORESAID ARGUMENT HAS BEEN SPECIFICALLY REJECTED BY THE HON'BLE HIGH COURT BY REFERRING TO THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF T. ASHOK PAI 292 ITR 11 (SC). IT WAS FURTHER NOTED THAT THE JUDGMENT IN THE CASE OF T. ASHOK PAI (SUPRA) HAS BEEN RELIED UPON BY THE HON'BLE KARNATA KA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY & ORS. 359 ITR 565 (KARN.). THE HON'BLE HIGH COURT APPROVED THE P ROPOSITION THAT ONCE THE TWO LIMBS CONTAINED IN THE NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT NAMELY CONCEALMENT OF INCOME AND FURNISHIN G OF INACCURATE PARTICULARS OF INCOME ARE UNDERSTOOD TO BE CARRYING DIFFERENT MEANINGS/CONNOTATIONS NON-STRIKING OFF OF THE IRRE LEVANT CLAUSE OR STRIKING OFF ONE OF THE LIMBS AND IMPOSING PENALTY ON THE OTHER LIMB IS NOT AS PER LAW. THIRDLY IT MAY BE NOTED THAT THE ISSUE BEFORE THE ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 21 HON'BLE HIGH COURT WAS INCORRECT MENTIONING OF CHAR GE IN THE SHOW CAUSE NOTICE BUT THE CASE BEFORE US IS OF NON-MENT IONING OF THE CHARGE AT ALL. THEREFORE FOR ALL THE ABOVE REASONS NON- STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE ISSUED U/S 274 R.W. S. 271(1)(C) OF THE ACT CANNOT BE SAID TO BE A MERE WRONG LABELLING OF THE SECTION OR SOME MISTAKE OF THE NATURE THAT WAS BEFORE THE HON'BLE P ATNA HIGH COURT IN THE CASE OF MITHILA MOTORS (P.) LIMITED (SUPRA). T HEREFORE THE JUDGMENT OF THE HON'BLE PATNA HIGH COURT DOES NOT H ELP THE CASE OF THE REVENUE BEFORE US. 14. THE OTHER PLEA OF THE LD. CIT-DR BEFORE US WAS THAT THERE WAS NO AMBIGUITY INASMUCH AS THE ASSESSING OFFICER HAD MADE AWARE THE ASSESSEE ABOUT THE CHARGE BEING MADE AGAINST HIM N AMELY CONCEALMENT OF INCOME BY REFERRING TO THE ASSESSME NT ORDER AND ALSO THE REPLY OF THE ASSESSEE FILED AT THE TIME OF PENA LTY PROCEEDINGS. IN OUR CONSIDERED OPINION IF ONE WERE TO EXAMINE THE ENTIRE CONSPECTUS OF FACT-SITUATION STARTING FROM THE ASSESSMENT ORDE R UPTO THE PASSING OF PENALTY ORDER THE ERROR IN THE ARGUMENT SET-UP BY THE LD. CIT-DR WOULD BE CLEAR. IN THE ASSESSMENT ORDER DATED 22.1 2.2008 THE ASSESSING OFFICER RECORDS THAT THE PENALTY PROCEEDI NGS U/S 271(1)(C) OF THE ACT ARE INITIATED FOR CONCEALMENT OF INCOME WHILE IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT OF EVEN DATE BOTH THE LIMBS OF SEC. 271(1)(C) OF THE ACT ARE LEFT INTACT IN THE STANDARD PRINTED NOTICE AS THE IRRELEVANT CLAUSE HAS NOT BEEN STRUC K-OFF. THIS CONTRADICTION IN THE ASSESSMENT ORDER VIS-A-VIS THE PENALTY NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT ON THE S AME DATE CLEARLY BRINGS OUT A CONFUSION ON THE PART OF THE ASSESSING OFFICER AND APPARENTLY IT IS A SITUATION WHERE ASSESSEE IS NOT AWARE ABOUT THE CLEAR AND CRYSTALLISED CHARGE BEING MADE AGAINST HI M THUS VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. THE PENALTY PRO CEEDINGS BEING QUASI- CRIMINAL IN NATURE AS NOTED BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) THE SAME ARE NECESSARIL Y REQUIRED TO BE IN COMPLIANCE WITH THE PRINCIPLES OF NATURAL JUSTICE. IN THIS VIEW OF THE MATTER IN OUR VIEW THE LD. CIT-DR IS NOT CORRECT IN CONTENDING THAT NON-STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NO TICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT IS NOT MATERIAL AND TH AT THE ASSESSEE HAD UNDERSTOOD THAT THE PROCEEDINGS WERE INITIATED FOR CONCEALMENT OF INCOME BASED ON THE OBSERVATIONS IN THE ASSESSMENT ORDER ITSELF. BEFORE PARTING WE MAY ALSO REFER TO A RECENT JUDGM ENT OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF S. CHANDRASHEKA R 396 ITR 538 (KARN.) WHEREIN A NOTICE ISSUED U/S 274 R.W.S. 271( 1)(C) OF THE ACT IN PRINTED FORM WITHOUT SPECIFYING THE GROUNDS OF INIT IATION OF PENALTY PROCEEDINGS WAS HELD TO BE INVALID AND UNTENABLE IN LAW. AS PER THE HON'BLE HIGH COURT IN THE ABSENCE OF ANY SPECIFIC GROUND IN THE NOTICE SO ISSUED THERE IS A BREACH OF PRINCIPLES OF NATUR AL JUSTICE AND ACCORDINGLY THE ORDER IMPOSING PENALTY CANNOT BE S USTAINED. 19. THE SAID DECISION OF THE C BENCH AS WELL AS THE J UDGEMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SAMSON PER INCHERY ( SUPRA ) ARE ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 22 EQUALLY APPLICABLE IN THE CASE OF THE ASSESSEE AS IN THE CASE OF THE ASSESSEE WE NOTED THAT THE AO WHILE INITIATING PENA LTY PROCEEDINGS DURING THE COURSE OF ASSESSMENT DOES NOT SPECIFY ANY PARTI CULAR GROUND FOR INITIATING PENALTY PROCEEDINGS. EVEN WHILE ISSUING NOTICE ALSO HE DID NOT SPECIFY FOR WHICH CHARGE THE ASSESSEE IS TO BE PENA LISED AS BOTH THE CHARGES CONCEALMENT OF PARTICULARS OF INCOME OR FU RNISHING OF INACCURATE PARTICULARS OF INCOME ARE DIFFERENT ALTHOUGH THE CO NSEQUENCE OF BOTH THE CHARGES MAY BE CONCEALED INCOME. EVEN THE HON'BLE S UPREME COURT IN THE CASES OF DILLIP N. SHROF VS. JCIT 291 ITR 519 AND T . ASHOK PAI 292 ITR 11 HAS ALSO APPRECIATED THAT THESE TWO EXPRESSIONS CON VEY TWO DIFFERENT CONNOTATIONS. WHEN THE HON'BLE SUPREME COURT HAS CA TEGORICALLY STATED IN THESE DECISIONS THAT BOTH THE CONNOTATIONS HAS DIFF ERENT MEANINGS. PERHAPS THE I BENCH IN THE CASE OF MAHESH M. GAND HI VS. ACIT WHILE CONFIRMING THE PENALTY ON WHICH THE LEARNED D.R. H AS VEHEMENTLY RELIED HAS NOT APPRECIATED THESE DECISIONS OF THE HON'BLE SUPREME COURT. EVEN WE NOTED THAT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) THE HON'BLE KARNATAKA HIGH COURT HAS ALSO R EFEREED TO BOTH THESE DECISIONS OF THE HON'BLE SUPREME COURT UNDER PARA 6 1 AS WELL AS THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS. MANU ENGINEERS (SUPRA) AND THAT OF THE HON'BLE DELHI HIG H COURT IN THE CASE OF VS. VIRGO MARKETING PVT. LTD. 171 TAXMAN 156 HAS CL EARLY HELD THAT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND IF THE POSITION IS UNCLEAR THE PENALTY CANNOT BE SUSTAINED . IN VIEW OF THE DECISIONS OF VARIOUS HIGH COURTS AND OF THE HON'BLE SUPREME COURT IN OUR VIEW THE DECISION OF THE I BENCH IN THE CASE OF M AHESH M. GANDHI IN ITA NO. 2976/MUM/2016 DOES NOT HAVE ANY LEG TO APPLY IN THE CASE OF THE ASSESSEE. IT IS ALSO NOT A CASE WHERE BOTH THE MUMB AI BENCHES HAVE TAKEN DIFFERENT VIEW SO THAT THE MATTER MAY BE REFERRED T O SPECIAL BENCH BUT IT IS A CASE WHERE THE ISSUE INVOLVED IS DULY COVERED IN OUR OPINION BY THE DECISIONS OF THE HON'BLE SUPREME COURT HON'BLE JUR ISDICTIONAL HIGH COURT HON'BLE KARNATAKA HIGH COURT AND HON'BLE GUJ ARAT HIGH COURT. THEREFORE THE ORDER PASSED BY THE I BENCH IN THE CASE OF MAHESH M. GANDHI (SUPRA) WILL NOT HAVE ANY BINDING PRECEDENCE ON US. WE THEREFORE ITA NO. 5694 TO 5699/MUM/2015 SHRI DHANVINDER BINDRA 23 CONFIRM THE ORDER OF THE CIT(A) DELETING THE PENALT Y IMPOSED ON THE ASSESSEE IN EACH OF THE CASE. 20. IN THE RESULT THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST NOVEMBER 2017. SD/ - SD/ - (R.L. NEGI) (P.K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT MUMBAI DATED: 1 ST NOVEMBER 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -51 MUMBAI 4. THE PR. CIT CENTRAL-2 MUMBAI 5. THE DR D BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.