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TMI Blog2020 (10) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... lled 'the Act'), the AO has not made it clear as to whether the assessee is guilty of concealment of income or of furnishing inaccurate particulars of income. 2. In the course of hearing of the MP, learned DR of the Revenue placed reliance on the following judicial pronouncements:- (a) CIT Vs. Sri Durga Enterprises as reported in 231 taxman 886 (Karnataka), copy available on pages 35 to 38 of the Paper Book filed by the Revenue in the course of hearing of the MP. (b) Jaysons Infrastructure (I) (P) Ltd., Vs. ITO as reportd in TS-5873-ITAT-2017 (Bang.), copy available on pages 39 to 44 of the Paper Book filed by the Revenue in the course of hearing of the MP. (c) Sundaram Finance Ltd., Vs. ACIT 403 ITR 407 (Madras), copy available on pages 45 to 50 of the Paper Book filed by the Revenue in the course of hearing of the MP. (d) ACIT Vs. Sourastra Kutch Stock Exchange 262 ITR 166 (Guj), copy available on pages 51 to 53 of the Paper Book filed by the Revenue in the course of hearing of the MP. 3. As against this, learned DR of the Revenue submitted that there is no apparent mistake in this impugned Tribunal order because as this, the Tribunal has decided the issue by following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed by the AO in the present case. In this regard, learned DR of the Revenue has placed reliance on the above noted four judgments and now we examine the applicability of these judgments in the present case. The first judgment on which reliance has been placed by learned DR of the Revenue is the judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Sri Durga Enterprises (supra). We find that in this case, the issue involved was regarding validity of the notice issued by the AO under section 148 of the Act and not about validity of the notice issued by the AO under section 274 r.w.s. 271 of the Act and therefore, in our considered opinion, this judgment is not applicable in the present case. 6. The second judgment on which reliance is placed by the learned DR of the Revenue is the Tribunal order rendered in the case of Jaysons Infrastructure India Pvt. Ltd., Vs. ITO (supra). Para 7 of this Tribunal order is relevant and hence, the same is reproduced hereinbelow for ready reference: "7. We have heard the contentions of the Ld. DR and perused the; orders of the lower authorities. In our view, u/s.271(1)(c) of the Act, the AO is required to satisfy that an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore AO. The assessee has not taken any objection before the AO in the 'penalty proceedings and for the first time,'the said objection has been taken before CIT(A). In our view, the purpose of issuing the :notice is to inform the assessee about the charges under which the assessee is liable fOr imposition of penalty. Once the charges are clearly known to the assessee which are duly !mentioned in the assessment order as well as in the notice, there is no error in the notice issued by the AO for imposition of penalty. In view thereof also, we do not find any merit in the appeal. As a result, penalty proceedings are confirmed." 8. From the above para reproduced from the Tribunal order, it is seen that in that case, the Tribunal has not considered the applicability of the judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Manjunatha Cotton and Ginning factory (supra) while deciding the issue in that case as per para 7 reproduced above. Although, in para 4 of the same Tribunal order, it was noted by the Tribunal that the assessee placed reliance on the judgment on Hon'ble jurisdictional High Court rendered in the case of CIT Vs. Manjunatha Cotton and Ginn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not be sufficient for the authorities either to initiate penalty proceedings or impose penalty, unless it is discernible from the assessment order that, it is on account of such unearthing or enquiry concluded by the authorities it has resulted in payment of such tax or such tax liability came to be admitted and if not it would have escaped from tax net and as opined by the Assessing Officer in the assessment order. (l) Only when no explanation is offered or the explanation offered is found to be false or when the assessee fails to prove that the explanation offered is not bona fide, an order imposing penalty could be passed. (m) If the explanation offered, even though not substantiated by the assessee, but is found to be bona fide and all facts relating to the same and material to the computation of his total income have been disclosed by him, no penalty could be imposed. (n) The direction referred to in Explanation 1(B) to section 271 of the Act should be clear and without any ambiguity. (o) If the Assessing Officer has not recorded any satisfaction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which the survey took place as the last date for closing the account was still not over. The very fact that the assessee agreed to pay tax and did not challenge the assessment order, it is clear the con-duct of the assessee cannot be construed as mala fide. Therefore, the Tribunal was justified in setting aside the orders passed by the appellate authority as well as the assessing authority. In so far as the imposition of penalty is concerned, it is not in accordance with law. No fault could be found with the Tribunal for deleting the penalty. Thus, we answer the substantial question of law in favour of the assessee and against the Revenue." 9. From the above para reproduced from the judgment of Hon'ble Karnataka High Court, it is seen that in clause No.p of the conclusion of Hon'ble Karnataka High Court as reproduced above, this is the finding of Hon'ble Karnataka High Court that notice under section 274 of the Act should specifically state the grounds mentioned in section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. In clause No.r, this is also observed by Hon'ble Karnataka High Court that the assessee should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at they have concealed particulars of income and furnished inaccurate particulars of income. Hence, it is seen that in that case, the facts are different because in that case, this is the finding of fact recorded by Hon'ble Madras High Court that relevant columns of the notice have been marked by the AO whereas in the present case, the facts are different and therefore, this judgment of Hon'ble Madras High Court is not applicable in the facts of the present case. Moreover, even if this judgment of Hon'ble Madras High Court is considered to be applicable then also, we are duty bound to follow the judgment of Hon'ble jurisdictional High Court in preference to the judgment of any other High Court and therefore, for this reason also, it cannot be said that there is any apparent mistake in the impugned Tribunal order because in the impugned Tribunal order, the Tribunal has decided the issue by following the judgment of Hon'ble jurisdictional High Court. 11. Next judgment on which reliance has been placed by learned DR of the Revenue is the judgment of Hon'ble Gujarat High Court rendered in the case of ACIT Vs.Sourastra Kutch Stock Exchange (supra). As per clause f of para 33 of this ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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