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TMI Blog2019 (2) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... not sustainable and hence, we delete the same. - decided against revenue - I.T.A. No. 1020/Kol/2018 - - - Dated:- 8-2-2019 - Shri A. T. Varkey, JM And Dr. A. L. Saini, AM For the Appellant : Shri Manish Tiwari For the Respondent : Shri Shankar Halder, Sr. DR ORDER PER SHRI A.T.VARKEY, JM This is an appeal preferred by the Assessee against penalty u/s 271(1)(c) confirmed by the Ld. CIT(A) 14, Kolkata dated 23.03.2018 for Assessment Year 2013-14. 2. At the outset, the learned counsel for the assessee drew our attention to the fact that the AO had levied penalty u/s 271(1)(c) without giving a valid notice by specifying the fault for which the assessee was being proceeded with u/s 271(1)(c) of the Act. He drew our attention to the penalty notice dated 25.01.2016 wherein we note that the AO has not stricken down either af the faults i.e. (1) have concealed the particulars of income or (2) furnished inaccurate particulars of such income. And since both the faults are reflected in the show-cause notice, the assessee was in the dark as to what fault assessee is being proceeded against with. So the assessee has not been served with a valid notice as per law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. In our view this decision is on the question of recording satisfaction and not in the context 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 refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 issued under Section 271(1)(c) of the Act, it is clear that it is a standard proforma used by 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulars 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 whisper in the order of assessment on this aspect. We have pointed out this aspect in the earlier part of this order. Hence, this decision will not be of any assistance to the plea of the revenue before us. Even otherwise 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 devi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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