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TMI Blog2018 (11) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in the case of SSA s Emerald Meadows. He also submits that the AO imposed penalty on defective notice issued u/s. 271(1)(c) of the Act on 15-12-2010, copy of the same is on record at page No.1 of Paper Book and in view of the decision of the Hon ble Supreme Court (supra), the imposition of penalty on defective is not maintainable. 3. The ld.AR, further submits that the statutory notice dt. 15-12-2010 issued by the JCIT, Range-2, Hooghly u/s. r.w.s 271(1)(c) of the Act is defective and by placing reliance on the decision of the Hon ble Karnataka High Court in the case of CIT vs SSA s Emerald Meadows supra in ITA No. 380 of 2015 dated 23.11.2015 which was affirmed by the Hon ble Supreme Court by dismissal of Special Leave Petition (SLP) filed by the Revenue in CC No. 11485/2016 dated 5.8.2016. 4. On the other hand, the ld.DR relied on the order of the CIT-A in confirming the impugned penalty imposed u/s. 271(1)(c) of the Act. In support of his contention, he adopted a detailed written submission dt:17-11-2017 filed in similar cases, which is reproduced herein below for ready reference:- 1. The Honble ITAT, 'D' bench, Kolkata, in the course of hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ratio of the judgement rendered in Manjunatha Coton and Ginning Factory we find that the assessees appeal was allowed by the Honble High Court after considering the multiple factors and not solely on the basis of defect in notice u/s 274. Therefore we are of the opinion that the penalty could not be deleted merely on the basis of defect pointed by the Ld AR in the notice and therefore the legal grounds raised are rejected. 6. The Mumbai bench of !TAT in a recent decision in the case of Mahesh M Gandhi vs ACIT [TS-5465-ITAT-2017(MUMBAI)-Ol also dealt with this aspect. The taxpayer had not offered Director's fees and income from short term capital gains to tax in the return of income. During the course of assessment proceedings when these incomes were picked up by the tax officer, the taxpayer admitted earning of the incomes and filed a revised computation of income. Based on this finding, the tax officer mentioned in the assessment order that penalty proceedings under section 271(1)(c) of the Act will be initiated for furnishing of inaccurate particulars of income. Subsequently the tax officer issued a notice under section 274 read with section 271(1)(c) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions were filed before the Coordinate Bench of this Tribunal in the case of Jeetmal Choraria in ITA 956/KOL/16 for AY 2010-11, wherein the Coordinate Bench elaborately discussed the facts in the decisions as relied upon by the Ld.DR and principle laid down by the respective Hon ble High Courts at Bombay and Patna and preferred to follow the ratio laid down by the Hon ble High Court of Karnataka in the case of Manjunatha Cotton and Ginning supra by taking support of the established principle enunciated by the Hon ble Supreme Court in the case of Vegetable Products ltd reported in 88 I TR 192 (SC). We are in agreement with the reasoning of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision 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 Earthmoving Equipment Service Corporation (supra), the ITAT Mumbai did not follow the decision rendered in the case of Manjunatha Cotton Ginning Factory (supra) for the reason that penalty in that case was deleted for so many reasons and not solely on the basis of defect in show cause notice u/s.274 of the Act. This is not factually correct. One of the parties before the group of Assessees before the Karnataka High Court in the case of Manjunatha Cotton Ginning (supra) was an Assessee by name M/s.Veerabhadrappa Sangappa Co., in ITA NO.5020 OF 2009 which was an appeal by the revenue. The Tribunal held that on perusal of the notice issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 in the show cause notice u/s.274 of the Act, there is no mention whether the proceedings are for furnishing inaccurate particulars or concealing particulars of income, that will not vitiate the penalty proceedings. In the present case there is no whispher in the order of assessment on this aspect. We have pointed out this aspect in the earlier part of this order. Hence, this deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier 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. 7. We find that the notice dt. 15-12-2010 issued u/s 271(1)(c) of the Act, copy of the same is on record, does not specify the charge of offence committed by the assessee viz whether had concealed the particulars of income or had furnished inaccurate particulars of income. Hence the said notice is to be held as defective. 8. Further, We find that the Revenue had preferred a SLP before the Hon ble Supreme Court against this judgment which was dismissed in CC No. 11485/2016 dated 5.8.2016 by observing as under:- UPON hearing the counsel, the Court made the following ORDER Delay condoned. We do not find any merit in this petition. The special leave petition is , accordingly dismissed. Pending application, if any, stands disposed of. 9. Respectfully following the aforesaid judicial precedents, we cancel the penalty levied of ₹ 6,18,001/- by the AO u/Sec.271(1)( c) of the Act and confirmed by the CIT(A). Accordingly, the grounds raised by the assessee in the appeal for the A.Y ..... X X X X Extracts X X X X X X X X Extracts X X X X
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