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TMI Blog2018 (3) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... hri D. Bhadra, FCA, ld.AR ORDER Shri S.S.Viswanethra Ravi, JM: This appeal by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals), 4, Kolkata dt. 31-08-2016 for the A.Y 2006-07, wherein he directed the AO to delete the penalty of ₹ 29,06,100/- imposed u/s. 271(1)( c) of the Act by the AO. 2. The ld.DR submits that the arguments and written submissions filed before the Tribunal on 27-11-2017 in the case of Jeetmal Choraria in ITA No. 956/Kol/2016 for the A.Y 2010-11 may be adopted in this case and relied on the order of the AO. 3. In view of above, he prayed to allow the grounds raised in appeal of revenue and confirm the penalty imposed by the AO u/s. 271(1)(c) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unciated by the Hon ble Supreme Court in the case of Vegetable Products ltd reported in 88 ITR 192 (SC). We are in agreement with the reasoning in its order dt:01-12- 2017 of Coordinate Bench in the case of Jeetmal Choraria and the same is reproduced for ready reference: 7. The learned DR submitted that the Hon ble Calcutta High Court in the case of Dr.Syamal Baran Mondal Vs. CIT (2011) 244 CTR 631 (Cal) has taken a view that Sec.271 does not mandate that the recording of satisfaction about concealment of income must be in specific terms and words and that satisfaction of AO must reflect from the order either with expressed words recorded by the AO or by his overt act and action. In our view this decision is on the question of reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 Ginnin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Assessing Authority was not sure as to whether she had proceeded on the basis that the assessee had either concealed its income or has furnished inaccurate details. The notice is not in compliance with the requirement of the particular section and therefore it is a vague notice, which is attributable to a patent non application of mind on the part of the Assessing authority. Further, it held that the Assessing Officer had made additions under Section 69 of the Act being undisclosed investment. In the appeal, the said finding was set-aside. But addition was sustained on a new ground, that is under valuation of closing stock. Since the Assessing Authority had initiated penalty proceedings based on the additions made under Section 69 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Smt.Kaushalya (supra) appears to have been reiterated, as is evident from the extracts furnished in the written note furnished by the learned DR before us. 12. In the case of Trishul Enterprises ITA No.384 385/Mum/2014, the Mumbai Bench of ITAT followed the decision of the Hon ble Bombay High Court in the case of Smt.Kaushalya (supra). 13. In the case of Mahesh M.Gandhi (supra) the Mumbai ITAT the ITAT held that the decision of the Hon ble Karnataka High Court in the case Manjunatha Cotton Ginning (supra) will not be applicable to the facts of that case because the AO in the assessment order while initiating penalty proceedings has held that the Assessee had concealed particulars of income and merely because i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court and Patna High Court are bound to follow the aforesaid view. The Tribunal Benchs at Bangalore have to follow the decision of the Hon ble Karnataka High Court. As far as benches of Tribunal in other jurisdictions are concerned, there are two views 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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