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TMI Blog2017 (12) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... se of SSA s Emerald Meadows . He also submits that the AO imposed penalty on defective notice issued u/s. 274 r.w.s 271(1)(c) of the Act on 21-11-2011, copy of the same is on record and in view of the decision supra the imposition of penalty on defective notice is not maintainable. 3. The ld.AR of the assessee further submits that the statutory notice dt. 21-11-2011 issued by the AO [JCIT, Cir-8, Kolkata ] u/s. 274 r.w.s 271 of the Act is defective. He further argued that the issue in hand as raised by the assessee is squarely covered in favour of assessee by the decision of the Hon ble Supreme Court in the case of SSA s Emerald Meadows. In support of his contention, he placed reliance on the decision of the Hon ble Karnataka High Court in the case of CIT vs SSA S Emerald Meadows supra in ITA No. 380 of 2015 dated 23.11.2015 which was approved by the Hon ble Supreme Court by dismissal of Special Leave Petition (SLP) filed by the Revenue in CC No. 11485/2016 dated 5.8.2016. In view of above, he prayed to allow the appeal of assessee. 4. On the other hand, the ld.DR relied on the order of the AO in imposing the impugned penalty u/s. 271(1)(c) of the Act. He also argued tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axmann.com 51 looked into the issue very closely and opined that after perusing the ratio of the judgement rendered in Manjunatha Coton and Ginning Factory we find that the assessees appeal was allowed by the Honble High Court after considering the multiple factors and not solely on the basis of defect in notice u/s 274. Therefore we are of the opinion that the penalty could not be deleted merely on the basis of defect pointed by the Ld AR in the notice and therefore the legal grounds raised are rejected. 6. Therefore, it is submitted that penalty proceedings for levy of penalty u/s.271(1)( c), were correctly initiated and the case may be heard on merits. 5. In view of above, Ld. DR prayed to dismiss the grounds raised in appeal of assessee by confirming the penalty imposed by the AO u/s. 271(1)(c) of the Act and confirmed by the CIT-A. 6. We have heard the rival submissions and considered the written submissions dt. 08-11-2017 and the case laws relied upon by the Ld.DR. We find the same set of written submissions were filed before the Coordinate Bench of this Tribunal in the case of Jeetmal Choraria in ITA 956/KOL/16 for AY 2010-11, wherein the Coordinate Bench ela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al justice of the assessee being heard before levying penalty. Rules of natural justice cannot be imprisoned in any straight-jacket formula. For sustaining a complaint of failure of the Principles of natural justice on the ground of absence of opportunity, it has to be established that prejudice is caused to the concerned person by the procedure followed. The issuance of notice 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. Mere mistake in the language used or mere non-striking of the inaccurate portion cannot by itself invalidate the notice. The ITAT Mumbai Bench in the case of Dhanraj Mills Pvt.Ltd. (supra) followed the decision rendered by the Jurisdictional Hon ble Bombay High court in the case of Kaushalya (supra) and chose not to follow decision of Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory (supra). Reliance was also placed by the ITAT Mumbai in this decision on the decision of Hon ble Patna High court in the case of CIT v. Mithila Motor's (P.) Ltd. [1984] 149 ITR 751 (Patna) wherein it was held that under section 274 of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et-aside by its order dated 9th April, 2009. Aggrieved by the said order, the revenue filed appeal before High Court. The Hon ble High Court framed the following question of law in the said appeal viz., 1. Whether the notice issued under Section 271(1)(c) in the printed form without specifically mentioning whether the proceedings are initiated on the ground of concealment of income or on account of furnishing of inaccurate particulars is valid and legal? 2. Whether the proceedings initiated by the Assessing Authority was legal and valid? The Hon ble Karnataka High Court held in the negative and against the revenue on both the questions. Therefore the decision rendered by the ITAT Mumbai in the case of Earthmoving Equipment Service Corporation (supra) is of no assistance to the plea of the revenue before us. 11. In the case of M/S.Maharaj Garage Co. Vs. CIT dated 22.8.2017 referred to in the written note given by the learned DR, which is an unreported decision and a copy of the same was not furnished, the same proposition as was laid down by the Hon ble Bombay High Court in the case of Smt.Kaushalya (supra) appears to have been reiterated, as is evident from the extracts fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws on the issue, one in favour of the Assessee rendered by the Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning (supra) and other of the Hon ble Bombay High Court in the case of Smt.Kaushalya. It is settled legal position that where two views are available on an issue, the view favourable to the Assessee has to be followed. We therefore prefer to follow the view expressed by the Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning (supra). 15. We have already observed that the show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. The plea of the ld. Counsel for the assessee which is based on the decisions referred to in the earlier part of this order has to be accepted. We therefore hold that imposition of penalty in the present case cannot be sustained and the same is directed to be cancelled. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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