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TMI Blog2018 (3) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... red thereon would apply with equal force to Asst Year 2005-06 also in view of identical facts except with variance in figures. 3. The Assessee is a Non-Banking Finance Company (NBFC) carrying on the business of financing and trading in shares and securities and was registered as such by the Reserve Bank of India. The assessee filed its return of income u/s 139(1) of the Act on 28.10.2004 declaring total income of Rs. 53,650/- for the Asst Year 2004-05. The ld AO observed that the assessee had advanced Rs. 95,00,000/- to one M/s ISG Traders Ltd and derived interest income for the period 1.4.2003 to 31.3.2004 amounting to Rs. 19,00,000/-and since the same was not declared in the return, the case was reopened u/s 147 of the Act. The ld AO passed an order u/s 143(3) / 147 of the Act on 31.12.2010 wherein the interest income of Rs. 19,00,000/- was added. The ld AO initiated penalty proceedings u/s 271 (1)(c) of the Act. 4. The explanation given by the assessee for the aforesaid addition was not accepted by the ld AO in the penalty proceedings and the ld AO imposed penalty u/s 271(1)(c ) of the Act in the sum of Rs. 9,97,500/-. The assessee stated that the nonrecognition of interest in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e particulars of income. The ld AR further brought to our notice that as against the decision of the Hon'ble Karnataka High Court the revenue preferred an appeal in SLP in CC No.11485 of 2016 and the Hon'ble Supreme Court by its order dated 05.08.2016 dismissed the SLP preferred by the department. The ld AR also brought to our notice the decision of the Hon'ble Bombay High Court in the case of CIT vs Shri Samson Perinchery in ITA No.1154 of 2014 dated 05.01.2017 wherein the Hon'ble Bombay High Court following the decision of the Hon'ble Karnataka High Court in the case of CIT vs Manjunatha Cotton and Ginning factory (supra) came to the conclusion that imposition of penalty on defective show cause notice without specifying the charge against the assessee cannot be sustained. Our attention was also drawn to the decision of ITAT in the case of Suvaprasanna Bhattacharya vs ACIT in ITA No.1303/Kol/2010 dated 06.11.2015 wherein identical proposition has been followed by the Tribunal. 6. The ld. DR submitted that it is not mandatory to specify the charge in the show cause notice u/s 274 of the Act. In this regard he placed reliance on certain judicial pronouncements. 7. We have consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Income-tax Act, 1961, all that is required is that the assessee should be given an opportunity to show cause. No statutory notice has been prescribed in this behalf. Hence, it is sufficient if the assessee was aware of the charges he had to meet and was given an opportunity of being heard. A mistake in the notice would not invalidate penalty proceedings. 10. In the case of Ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me 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 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Hon'ble Karnataka High Court in the case of Manjunatha Cotton & Ginning (supra). " 8. 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 AR 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. 9. The ld AR placed on record the decision of this tribunal in assessee's own case for the Asst Years 2004-05 and 2005-06 wherein the quantum addition has been deleted by this tribunal in ITA Nos. 426 & 427/Kol/2015 dated 26.12.2017, wherein the quantum addition has been deleted by this tribunal by placing reliance on the decision of Hon'ble Delhi High Court in the case of CIT vs Vasisth Chay Vyapar reported in 330 ITR 440 (D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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