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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 ..... fore 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 Rs. 2, 04, 180/- imposed by both the lower authorities pertaining to alleged undisclosure of interest income amounting to Rs. 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. The assessee appears to have pleaded that the impugned penalty show cause notice did not specify the relevant charge as to whether it failed in furnishing of inaccurate particulars of income or concealment of income. The CIT(A) holds both the above limbs are attracted in the instant taxpayer's act and conduct. This what leaves the assessee aggrieved. 4. We have given our thoughtful consideration to rival contentions against and in support of impugned penalty. Learned counsel representing asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. 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. 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 assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, 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 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 parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid 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 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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