TMI Blog2019 (6) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... (A)-14, Kolkata for AY 2009-10 wherein he confirmed the penalty imposed by the AO u/s 271(1)(c) of the Income Tax Act, 1961 (in short Act ). 2. The ld.AR submits that the issue raised in the appeal is covered by the decision of the Hon ble Supreme Court in the case of SSA s Emerald Meadows. He also submits that the AO imposed penalty on defective notice issued u/s. 274 r.w.s 271(1)(c) of the Act on 10-08-2016, copy of the same is on record of Paper Book and in view of the decision of the Hon ble Supreme Court supra the imposition of penalty on defective is not maintainable. 3. The ld.AR, further submits that the statutory notice dt. 10-08-2016 issued by the ITO, Ward-46(2), Kolkata u/s. 274 r.w.s 271 of the Act is defective and by placing reliance on the decision of the Hon ble Karnataka High Court in the case of CIT vs SSA s Emerald Meadows supra in ITA No. 380 of 2015 dated 23.11.2015 which was affirmed by the Hon ble Supreme Court by dismissal of Special Leave Petition (SLP) filed by the Revenue in CC No. 11485/2016 dated 5.8.2016. 4. On the other hand, the ld.DR relied on the order of the CIT-A in confirming the impugned penalty imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired by Section 274 of the said Act was given to the assessee before imposing the penalty by the Income Tax Officer. 5. Honble Mumbai E Bench in the case of Earthmoving Equipment Service Corporation vs DCIT 22(2), Mumbai (2017) 84 taxmann.com 51 looked into the issue very closely and opined that after perusing the ratio of the judgement rendered in Manjunatha Coton and Ginning Factory we find that the assessees appeal was allowed by the Honble High Court after considering the multiple factors and not solely on the basis of defect in notice u/s 274. Therefore we are of the opinion that the penalty could not be deleted merely on the basis of defect pointed by the Ld AR in the notice and therefore the legal grounds raised are rejected. 6. The Mumbai bench of !TAT in a recent decision in the case of Mahesh M Gandhi vs ACIT [TS-5465-ITAT2017(MUMBAI)-Ol also dealt with this aspect. The taxpayer had not offered Director's fees and income from short term capital gains to tax in the return of income. During the course of assessment proceedings when these incomes were picked up by the tax officer, the taxpayer admitted earning of the incomes and filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d initiation of penalty proceedings and the case may be heard on merits. 5. In view of above, he prayed to dismiss the appeal of assessee by confirming the order of CIT(A). 6. We have heard the rival submissions and considered the written submissions dt:17-11-2017 and the case laws relied upon by the Ld.DR. We find the same set of written submissions were filed before the Coordinate Bench of this Tribunal in the case of Jeetmal Choraria in ITA 956/KOL/16 for AY 2010-11, wherein the Coordinate Bench elaborately discussed the facts in the decisions as relied upon by the Ld.DR and principle laid down by the respective Hon ble High Courts at Bombay and Patna and preferred to follow the ratio laid down by the Hon ble High Court of Karnataka in the case of Manjunatha Cotton and Ginning supra by taking support of the established principle enunciated by the Hon ble Supreme Court in the case of Vegetable Products ltd reported in 88 ITR 192 (SC). We are in agreement with the reasoning of the in its order dt:01-12-2017 of Coordinate Bench in the case of Jeetmal Choraria and the same is reproduced for ready reference: 7. The learned DR submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf invalidate the notice. The ITAT Mumbai Bench in the case of Dhanraj Mills Pvt.Ltd. (supra) followed the decision rendered by the Jurisdictional Hon ble Bombay High court in the case of Kaushalya (supra) and chose not to follow decision of Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory (supra). Reliance was also placed by the ITAT Mumbai in this decision on the decision of Hon ble Patna High court in the case of CIT v. Mithila Motor's (P.) Ltd. [1984] 149 ITR 751 (Patna) wherein it was held that under section 274 of the Income-tax Act, 1961, all that is required is that the assessee should be given an opportunity to show cause. No statutory notice has been prescribed in this behalf. Hence, it is sufficient if the assessee was aware of the charges he had to meet and was given an opportunity of being heard. A mistake in the notice would not invalidate penalty proceedings. 10. 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst 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. 11. In the case of M/S.Maharaj Garage Co. Vs. CIT dated 22.8.2017 referred to in the written note given by the learned DR, which is an unreported decision and a copy of the same was not furnished, the same proposition as was laid down by the Hon ble Bombay High Court in the case of Smt.Kaushalya (supra) appears to have been reiterated, as is evident from the extracts furnished in the written note furnished by the learned DR before us. 12. In the case of Trishul Enterprises ITA No.384 385/Mum/2014, the Mumbai Bench of ITAT followed the decision of the Hon ble Bombay High Court in the case of Smt.Kaushalya (supra). 13. In the case of Mahesh M.Gandhi (supra) the Mumbai ITAT the ITAT held that the decision of the Hon ble Karnataka High Court in the case Manjunatha Cotton Ginning (supra) will not be applicable to the facts of that case because the AO in the assessment order while initiating penalty proceedings has held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. The plea of the ld. Counsel for the assessee which is based on the decisions referred to in the earlier part of this order has to be accepted. We therefore hold that imposition of penalty in the present case cannot be sustained and the same is directed to be cancelled. 7. We find that the notice dt. 10-08-2016 issued u/s 274 r.w.s 271 of the Act, copy of the same is on record, does not specify the charge of offence committed by the assessee viz whether had concealed the particulars of income or had furnished inaccurate particulars of income. Hence the said notice is to be held as defective. 8. Further, We find that the Revenue had preferred a SLP before the Hon ble Supreme Court against this judgment which was dismissed in CC No. 11485/2016 dated 5.8.2016 by observing as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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