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TMI Blog2018 (4) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act by the AO. 2. The ld.DR submits that the arguments canvassed and written submissions filed before the Bench 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 also. In support of his contention, he relied on the order of the AO and opposed the order of the CIT-A in cancelling the impugned penalty imposed u/s. 271(1)(c) of the Act. 3. In view of above, he prayed to allow the grounds raised by the revenue by confirming the penalty imposed by the AO u/s. 271(1)(c) of the Act. 4. On the other hand, the ld.AR submits that the issue raised in the appeal is covered in favour of assessee by the decision of the Hon ble Supreme Court in the case of SSA s Emerald Meadows. He also submits that the AO imposed penalty on defective notice dt. 30- 09-2014 issued u/s. 274 r.w.s 271(1)(c) of the Act, copy of the same is on record and in view of the decision supra the imposition of penalty on defective notice is not maintainable. 5. The ld.AR of the assessee further submits that the statutory notice dt. 30-09-2014 issued by the AO [DCIT,Circle-2, Jalpaiguri] u/s. 274 r.w.s 271 of the Act is defective on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR relied on three decisions of Mumbai ITAT viz., (i) Dhanraj Mills Pvt. Ltd. Vs. ACIT ITA No.3830 3833/Mum/2009 dated 21.3.2017; (ii) Earthmoving Equipment Service Corporation Vs. DCIT 22(2), Mumbai, (2017) 84 taxmann.com 51 (iii) Mahesh M.Gandhi Vs. ACIT Vs. ACIT ITA No.2976/Mum/2016 dated 27.2.2017. Reliance was placed on two decisions of the Hon ble Bombay High Court viz., (i) CIT Vs. Kaushalya 216 ITR 660(Bom) and (ii) M/S.Maharaj Garage Co. Vs. CIT dated 22.8.2017. This decision was referred to in the written note given by the learned DR. This is an unreported decision and a copy of the same was not furnished. However a gist of the ratio laid down in the decision has been given in the written note filed before us. 9. In the case of CIT Vs. Kaushalya (supra), the Hon ble Bombay High Court held that section 274 or any other provision in the Act or the Rules, does not either mandate the giving of notice or its issuance in a particular form. Penalty proceedings are quasi-criminal in nature. Section 274 contains the principle of natural justice of the assessee being heard before levying penalty. Rules of natural justice cannot be imprisoned in any straight-jacket formula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee 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 the Act, which was struck down by the Appellate Authority, the initiated penal proceedings, nolonger exists. If the Appellate Authority had initiated penal proceedings on the basis of the addition sustained under a new ground it has a legal sanctum. This was not so in this case and therefore, on both the grounds the impugned order passed by the Appellate Authority as well as the Assessing Authority was set-aside by its order dated 9th April, 2009. Aggrieved by the said order, the revenue filed appeal before High Court. The Hon ble High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s.274 of the Act. The Hon ble Court did not lay down a proposition that the defect in the show cause notice will stand cured if the intention of the charge u/s.271(1) (c ) is discernible from a reading of the Assessment order in which the penalty was initiated. 14. From the aforesaid discussion it can be seen that the line of reasoning of the Hon ble Bombay High Court and the Hon ble Patna High Court is that 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 Tribunal Benches at Mumbai and Patna being subordinate to the Hon ble Bombay 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 (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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