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TMI Blog2018 (7) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income Tax Act, 1961; in short the Act . 2. It emerges at the outset that assessee s instant appeal suffers from 193 days delay in fling. It has placed on record its condonation petition dated 04. 06. 2018 pleading therein that its office staff had inadvertently mixed the instant case file with similar other records. All these solemn averments duly supported by assessee s practicing CA s affidavit dated 27. 06. 2018 have gone unrebutted from the Revenue side. It is therefore clear that assessee s delay in filing of instant appeal is neither intentional nor deliberate. The same is accordingly condoned. 3. We come to above sole issue of correctness of impugned penalty amounting to ₹ 2, 04, 180/- imposed by both the lower authorities pertaining to alleged undisclosure of interest income amounting to ₹ 6, 60, 776/- on assessee s part. There is no dispute that Assessing Officer had made the said addition in assessment order dated 12. 11. 2014 passed u/s 143(3) of the Act which attained finality. The Assessing Officer thereafter treated it as a case of concealment of income since the amount is concerned saw light of the day only during the course of scrutiny. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ext of specific charge in the mandatory show cause notice u/s. 274 of the Act. Therefore reference to this decision, in our view is not of any help to the plea of the Revenue before us. 8. The learned 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 procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Authority. Before issuing the notice the inappropriate words and paragraphs were neither struck off nor deleted. 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 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 impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wise this decision does not follow the ratio laid down by the Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning (supra) in as much as the ratio laid down in the said case was only with reference to show cause 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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