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TMI Blog2019 (2) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... Manoj Kumar Jain, FCA For the Revenue : Shri C.J. Singh, JCIT-DR ORDER PER S.S.GODARA, JUDICIAL MEMBER:- These two assessee s appeals for assessment year 2014-15 arise against the Commissioner of Income Tax (Appeals)-14, Kolkata s separate orders dated 25.06.2018 15.06.2018 passed in case No.10489, 10037/CIT(A)-14/Wd- 46(1)/2016-17, affirming the Assessing Officer s action imposing penalty of ₹1 lac ₹6,63,297 (assessment year-wise) involving proceedings 271(1)(c) of the Income Tax Act, 1961; in short the Act . Heard both the parties. Case file(s) perused. 2. It transpires at the outset that both the assessee s instant appeal(s) suffer from identical delay of 107 days in filing. His condonation petition / affidavit dated 21.12.2018 pleads that same is neither intentional nor deliberate but on account of ill health. He has placed on record medical certificate to this effect as well. The Revenue is fair enough in not disputing correctness of the said solemn averments. We therefore condone the impugned identical delay of 107 days in filing of both these appeals. These two cases are now taken up for adjudication on merits. 3. It emerge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has filed the present appeal before the Tribunal. 5. The Id. Counsel for the assessee submitted before us that the show cause notice issued u/s 274 of the Act before imposing penalty does not contain the specific charge the show cause notice u/s 274 of the Act was filed before us and perusal of the same reveals that AO has not struck out the irrelevant portion in the show cause notice and therefore the show cause notice does not specify the charge against the assessee namely as to whether the charge is of concealment of particulars of income or furnishing of inaccurate particulars of income. The same is reproduced for the purpose of ready reference: Have concealed the particulars of your income or furnished inaccurate particulars of such income. 6. The Id. Counsel for the assessee drew our attention to the decision of the Hon'ble Karnataka High Court in the case of CIT vs. SSA's Emerald Meadows in ITA No.380 of 2015 dated 23.11.2015 wherein the Hon'ble Karnataka High Court following its own decision in the case of CIT vs Manjunatha Cotton and Ginning factory (2013) 359 ITR 565 took a view that imposing of penalty u/s 271(1)(c) of the Act is bad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lS.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 quasicriminal 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 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 use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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, no longer 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 particulars is valid and legal? 2. Whether the proceedings initiated by the Assessing Authority was legal and valid? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 in the case of Manjunatha Cotton Ginning (supra). 15. We have already ..... X X X X Extracts X X X X X X X X Extracts X X X X
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