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TMI Blog2019 (7) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... ,66,481/- was made u/s 115JB of the Income Tax Act. Consequently the penalty proceedings u/s 271(1)(c) of the Act were also initiated which resulted into imposition of penalty to the tune of Rs. 20,81,32,327/- (which represents 100% of tax sought to be evaded) u/s. 271(1)(c) of the Act for furnishing inaccurate particulars of income/ concealment of particulars of income,. 3. The assessee, on aggrieved, challenged the penalty order passed by the Assessing Officer before the Ld. CIT(A), who ultimately affirmed the penalty order, however, directed the Assessing Officer to recompute the penalty on the tax sought to be evaded and charge interest and surcharge interest, accordingly as per the Act. The assessee preferred the instant appeal against the impugned order on the following grounds: Grounds of Appeal (Amended/Modified) Rs. 208132327/ (Inadvertently mentioned as Rs. 197791730/- in CIT appellate order) a) The Learned (Ld.) Commissioner of Income Tax ( Appeals) has erred in law, facts and circumstances of the case by wrongly confirming the penalty u/s 271(1) (c ) of the Income Tax Act 1961. b) The confirmation of penalty order by the Ld. Commissioner of Income Tax (Appeals) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the date of 4. Having heard the parties at length and perused the documents available on record. At the outset, it was stated by Ld. AR in the instant cases, the AO while initiating penalty proceedings recorded a satisfaction qua furnishing of inaccurate particulars of income/concealment of particulars of its income, and while issuing a notice u/s 274 of the Act, mentioned both limbs i.e. concealment of income/furnishing of inaccurate particulars of income and finally without specifying the limb, imposed the penalty for concealment of income/furnishing inaccurate particulars of income, which goes to show that while initiating the penalty, issuing the notice u/s 274 of the Act and levying the penalty, the AO was not sure under which limb the penalty was attracted and imposable. In the similar facts and circumstances, while analyzing various decisions rendered by Hon'ble Karnataka High Court in 'Manjunatha Cotton and Ginning Factory' 359 ITR 565 (Kar), 'CIT Vs Manu Engineering Works (1980) 122 ITR 306 (Guj), and 'Padma Ram Bharali Vs CIT', the co-ordinate bench at Amritsar in (third Member's cases) 'HPCL Mittal Energy Ltd Vs Addl CIT' & 'HPCL Mittal Pipeline Ltd., Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he limb of the penalty imposable and finally imposed penalty for furnishing of inaccurate particulars of income/concealment of income. 7. Hon'ble Apex Court in case of Commissioner of Income Tax, Bangalore Versus M/s. SSA's Emerald Meadows, (2016) 73 taxmann.com 248(SC) dismissed the Special Leave Petition filed by the Revenue against the judgment {(2016) 73 taxmann.com 248}, rendered by Hon'ble High Court of Karnataka , whereby identical issue was decided in favour of the assessee. Operative part of the decision made in the case of M/s. SSA's Emerald Meadows (supra), by Hon'ble High Court of Karnataka is reproduced below :- "2. This appeal has been filed raising the following substantial questions of law: (1) Whether, omission if assessing officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case? (2 Whether, on the facts and in the circumstances of the case, the Tribunal was justifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice has to be appropriately marked. The Hon'ble High Court held that the standard proforma of notice under section 274 of the Act without striking of the irrelevant clauses would lead to an inference of non-application of mind by the Assessing Officer. The Hon'ble Supreme Court in the case of Dilip N. Shroff vs. JCIT, 291 ITR 519(SC) has also noticed that where the Assessing Officer issues notice under section 274 of the Act in the standard proforma and the inappropriate words are not deleted, the same would postulate that the Assessing Officer was not sure as to whether he was to proceed on the basis that the assessee had concealed the particulars of his income or furnished inaccurate particulars of income. According to the Hon'ble Supreme Court, in such a situation, levy of penalty suffers from non-application of mind. 9. The co-ordinate bench at Amritsar in (third Member's cases) 'HPCL Mittal Energy Ltd Vs Addl CIT' & 'HPCL Mittal Pipeline Ltd., Vs Addl CIT' (supra) decided the issue wherein both the limbs of penalty have been used by mentioning oblique on concealment of income and furnishing the particular of income. In the instant case as well, the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of justice under our system. This is a fundamental principle which every Presiding Officer of a Judicial Forum ought to know, for consistency in interpretation of law alone can lead to public confidence in our judicial system. This Court has laid down time and again precedent law must be followed by all concerned; deviation from the same should be only on a procedure known to law. A subordinate court is bounded by the enunciation of law made by the superior courts. A coordinate Bench of a Court cannot pronounce judgment contrary to declaration of law made by another Bench. It can only refer it to a larger Bench if it disagrees with the earlier pronouncement. This Court in the case of Tribhuvandas Purshottamdas Thakar v. Ratilal Motilal Patel, [1968] 1 SCR 455 while dealing with a case in which a Judge of the High Court had failed to follow the earlier judgment of a larger Bench of the same court observed thus: "The judgment of the Full Bench of the Gujarat High Court was binding upon Raju, J. If the learned Judge was of the view that the decision of Bhagwati, J., in Pinjare Karimbhai's case and of Macleod, C.J., in Haridas `s case did not lay down the correct Law or rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les of judicial discipline, rules of precedents and to maintain consistency in the decisions, are inclined to follow the aforesaid decisions. 9. Coming to the instant case, bare perusal of the assessment order dated 28-03-2014, whereby the penalty proceedings have been imitated and notice dated 28-03-2014 issued u/s 274 of the Act, apparently goes to prove that the Assessing Officer initiated the penalty proceedings in the assessment order and issued the notice u/s 274/271(1)(c) of the Act without specifying whether the assessee has concealed '' the particulars of income" or the assessee has furnished " the inaccurate particulars of income", so as to provide adequate opportunity to the assessee to explain the show cause notice. Rather notice in this case has been issued in a stereotyped manner without applying any mind which is bad in law, hence is not a valid notice sufficient to impose penalty u/s 271(1)(c) of the Act. Further the assessing officer while imposing the penalty also, used both the limbs by mentioning oblique such as " concealment of particulars of income/furnishing the particular of income", therefore it goes to prove that even the mind of the AO, while re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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