TMI Blog2017 (12) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that levy of penalty in this case is not justified and the impugned penalty order is illegal. Therefore, we have no other option but to delete the same. Thus, the penalty is hereby directed to deleted. Since, penalty is deleted on jurisdictional ground, we are not deciding other issues raised by assessee. As a result, the grounds of appeal raised by the assessee are allowed. - ITA No. 5006/DEL/2013 - - - Dated:- 21-11-2017 - SHRI B. P. JAIN, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Assessee : Shri Ashwani Tanena, Adv Shri Acrhit Rehan, Adv For The Revenue : Shri S.K. Jain, Sr. DR ORDER PER B.P. JAIN, ACCOUNTANT MEMBER, This appeal filed by the assessee is directed against the order dated 08.07.2013 passed by the CIT(A)-IV, New Delhi in appeal No.03/12-13 for the AY 1997-98 passed u/s 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short]. 2. The assessee has raised the following grounds of appeal: 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty of ₹ 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 15,20,000/-. 3. During the course of hearing, Ld. Counsel of assessee vehemently challenged the validity of jurisdiction of the AO to levy the penalty on the ground that in the jurisdictional notice issued u/s 274 by the AO there was no clarity with respect to specific charge as to whether there was concealment of income or furnishing of inaccurate particulars of income by the assessee. It was also shown by the Ld. Counsel that even in the assessment order, no proper satisfaction has been recorded by the AO for initiation of the penalty proceedings. Similarly, in the penalty order also AO was not clear at all as to the fact whether penalty was being levied on the concealment of income or furnishing of inaccurate particulars of income by the assessee. 4. In view of these preliminary submissions of the Ld. Counsel on the jurisdiction, we confronted him with copy of recent judgment of Nagpur Bench of Hon ble Bombay High Court in the case of Maharaj Garage Co. (Income Tax Reference No. 21/2008 dated 22.08.2017) wherein issue of jurisdiction has been claimed to be decided against the said assessee. Ld. Counsel was directed to show as to why this judgment was not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s SSA's Emerald Meadows in SLP No. 11485/2016, date or order 05.08.2016, Supreme Court of India (CLC Page no. 1) CIT vs. M/s SSA's Emerald Meadows in ITA No. 380/2015, High Court of Karnataka, dated 23.11.2015 (CLC Page no. 2-5) Pr. CIT vs. Smt. Baisetty Revathi in I.T.T.A. No. 684 of 2016 dated 13.07.2017 (Andhra High Court) (CLC Page no. 6-11) CIT vs. Manjunatha Cotton Ginning Factory in 359 ITR 565 (Kar) (CLC Page no. 12-38) Safina Hotels Pvt. Ltd. vs. CIT, (2016) 237 Taxman 702 (Kar)(HC) (CLC Page no. 39-68) Shri Samson Perinchery vs. ACIT in ITA No. 4625/Mum/2013 dated 11.10.2013 (CLC Page no. 69-76) CIT vs. Shri Samson Perinchery in ITA No. 1154 of 2014 (Bombay) dated 05.01.2017 (CLC Page no. 77-80) Meherjee Cassinath Holdings (P) Ltd. vs. ACIT in ITA No. 2555/Mum/2012 dated 28.04.2017 II) In this case, no satisfaction has been recorded by the Ld. AO before initiation of penalty as evident from the assessment order. Therefore, the assumption of jurisdiction is bad in law for this reason also in view of following judgments of jurisdictional Court: CIT v. Madhu Shree Gupta 317 ITR 107 (Del) (CLC Pg no. 81-99) D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded shall have precedence over the judgment where the issue involved is not specifically discussed on this point. d) In this case, the question of law as mentioned in Para 5 of the order of Hon'ble High Court do not involve the issue involved in the case before us. Therefore, this judgment cannot be applied on the facts of the case before us. e) Issue involved in the facts of the case before us has not been determined in this judgment. f) Without prejudice to the above, in any case if two view are available then view in favour of assessee should be taken as has been held in the fo1lowing judgments: CIT vs. Vegetable Products Ltd. in 88 ITR 192 (SC) (CLC Page no. 120-124) DCIT vs. Ananda Marakala in 150 ITD 323 (Bang) 30. Thus there are two views on the issue, one in favour of the assessee expressed by the Hon'ble Allahabad High Court and the other against the assessee expressed by the Hon'ble Gujarat Calcutta High Courts. Admittedly, there is no decision rendered by the jurisdictional High Court on this issue. In the given circumstances, following the decision of the Hon'ble Supreme Court in the case of Vegetable Products Ltd. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court in the case of CIT Anr. vs. SSA s Emerald Meadows in SLP No. 11485/2016 dated 05.08.2016, is squarely applicable wherein Hon ble Supreme Court has affirmed the view taken by Hon ble High Court of Karnataka in its order dated 23.11.2015 which in turn relied upon the another judgment of Hon'ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton Ginning Factory in 359 ITR 565 wherein it was held that jurisdictional notice issued by AO u/s 274 read with section 271(1)(c) of the Act was bad in law as it did not specify that in which limb of section 271(1)(c) of the Act, the penalty proceedings have been initiated i.e. whether for concealment of income or furnishing of inaccurate particulars of income. Thus, the mandate of the law as declared by Hon ble Supreme Court is very clear and we are bound by it. 9. It is further brought to our notice that Hon ble Bombay High Court in the case of CIT vs. Shri Samson Perinchery in ITA No. 1154 dated 05.01.2017 has followed the view taken by Hon ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton Ginning Factory (supra) and dismissed the argument of the revenue that there is no difference between fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for furnishing inaccurate particulars of income by the assessee. In view of the above facts, the proceedings initiated by the Ld. AO u/s 271(1)(c) are void ab initio, contrary to facts of the case, bad in law, and as such proceedings initiated may kindly be dropped on these facts itself. 10. Thus, from the perusal of above, it is clear that in the case before us the AO made a serious lapse in not fixing the charge clearly while assuming jurisdiction to levy penalty and whether at the stage of leaving the penalty. 11. On the other hand, it is brought to our notice by the opposite party that judgment of Hon ble Bombay High Court (Nagpur Bench) in the case of Maharaj Garage Co. (supra) has not considered the judgment of Hon ble Supreme Court in the case of CIT vs. SSA s Emerald Meadows (supra). Further as discussed above, Hon ble Bombay High Court has itself in the case of CIT vs. Shri Samson Perinchery (supra) has followed the view taken by Hon ble Supreme Court in the case of CIT vs. M/s SSA s Emerald Meadows and CIT vs. Ashok Pai (supra). It is further brought to our notice that perusal of judgment shows that in the four questions of law determined by the Hon ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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