TMI Blog2018 (1) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... e same is directed to be cancelled. - Decided in favour of assessee. - ITA No.891/Kol/2015 - - - Dated:- 17-1-2018 - Shri N.V.Vasudevan, Judicial Member And Dr. A. L. Saini, Accountant Member For The Appellant : Shri D. Chakraborty, FCA For The Respondent : Shri S. Dasgupta, Addl. CIT-DR ORDER PER Dr. A.L. Saini, Accountant Member:- This caption appeal filed by the Assessee, pertaining to assessment year 2006-07, is directed against the order passed by the Commissioner of Income Tax (Appeals)-7, dated 08.05.2015, which in turn arises out of a penalty order passed by the Assessing Officer under section 271 (1) (C )of the Income Tax Act, 1961 (hereinafter referred to as the Act ), vide his order dated 30.10.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad in law and invalid for the reason that the show cause notice u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income. The ld. Counsel further brought to our notice that as against the decision of the Hon ble Karnataka High Court the revenue preferred an appeal in SLP in CC No.11485 of 2016 and the Hon ble Supreme Court by its order dated 05.08.2016 dismissed the SLP preferred by the department. The ld. Counsel also brought to our notice the decision of the Hon ble Bombay High Court in the case of CIT vs Shri Samson Perinchery in ITA No.1154 of 2014 dated 05.01.2017 wherein the Hon ble Bombay High Court following the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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 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. 7. 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 quasi-criminal in nature. Section 274 contains the principle of natural j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice would not invalidate penalty proceedings. 8. In the case of Earthmoving Equipment Service Corporation (supra), the ITAT Mumbai did not follow the decision rendered in the case of Manjunatha Cotton Ginning Factory (supra) for the reason that penalty in that case was deleted for so many reasons and 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.VeerabhadrappaSangappa 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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? The Hon ble Karnataka High Court held in the negative and against the revenue on both the questions. Therefore the decision rendered by the ITAT Mumbai in the case of Earthmoving Equipment Service Corporation (supra) is of no assistance to the plea of the revenue before us. 9. In the case of M/S.Maharaj Garage Co. Vs. CIT dated 22.8.2017 referred to in the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... natha 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. 12. 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 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 u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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