TMI Blog2019 (7) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... the satisfaction in Assessment Order, issuing the notice dated 28-03-2014 u/s 274 and while imposing the penalty as well, was indecisive and unclear under which limb, the penalty proceedings have to be initiated and under which limb the assessee had to reply in order to defend its case and under which limb the penalty warranted and supposed to be levied, therefore we are of the view that under these facts and circumstance, the penalty is not leviable as held by the various Courts including the Apex Court, hence, we have no hesitation to delete the penalty levied by the AO and affirmed by the CIT (A). - Decided in favour of assessee. - ITA No.339(Asr)/2016 - - - Dated:- 22-7-2019 - Sh. Vikram Singh Yadav, Accountant Member And Sh. N.K. Choudhry, Judicial Member For the Appellant : Sh. Dalip K. Kaul (Ld. CA) For the Respondent : Sh. M.P. Singh (Ld. CIT-DR) ORDER PER N.K.CHOUDHRY, JM: This is an appeal filed by the Assessee/Appellant against the order dated 31/03/2016 impugned herein, passed by the Ld. CIT(A)-Jammu u/s. 250(6) of Income Tax Act, 1961 (hereinafter called as the Act ), where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case by confirming the penalty u/s 271(1) (c) of the Income Tax Act 1961 when the Ld. Assessing Officer himself was not clear whether the penalty is to be levied for furnishing inaccurate particulars of income or for the concealment of particulars of income. Further, the Ld. Commissioner of Income Tax (Appeals) has erred in law, facts and circumstances of the case by confirming the penalty u/s 271(1) (c) of the Income Tax Act 1961 as the Ld. Assessing Officer has issued a penalty order which is illegal and void abinitio since he has not spelt out under which limb of section 271(l)(c), the penalty proceedings have been initiated (Assessment Order), Issued the Notice of penalty and finally the penalty order confirming the penalty. d) The Ld. Commissioner of Income Tax (Appeals) has erred in law, facts and circumstances of the case by confirming the penalty levied by the Ld. Assessing Officer, as the Appellant/Assesse has neither made any wilful concealment nor furnished inaccurate particulars of income, however has committed some bonafide omission, which does not hold for levy for penalty u/s 271(1) (c) of the Income Tax Act 1961 and the said bonaf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al (third member's cases). 4.1 On the contrary, the Ld. CIT(DR) submitted that every case is unique in nature distinct one and must be decided in accordance with its peculiar facts and circumstances and the authorities below were right in initiating penalty proceedings as well as imposing the penalty and therefore, the order under challenge does not suffer from any perversity, illegality or impropriety. 5. Though the Assessee and the Revenue Department extensively argued the matter at length on merits as well on legal aspects and the assessee also filed many judgments (which are part of the record) on merit as well on legal aspect, however as the assessee has raised the legal ground specifically and stressed upon the adjudication of the same therefore, we feel it appropriate to decide the legal ground first, before going into the merit of the case. 6. At the outset, it is observed that the Assessing Officer in the assessment order while initiating the penalty proceedings against the assessee u/s. 271(1)(c) of the Income Tax Act noted as under: Penalty proceedings under section 271(1)(c) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amendment, the assessing officer has initiated the penalty by properly recording the satisfaction for the same? (3) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued, under Section 274 without taking into consideration the assessment order when the assessing officer has specified that the assessee has concealed particulars of income? 3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short 'the Act') to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied the decision of the Division Bench of this Court rendered In the case of COMMISSIONER or INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565 . 4. In our view, sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the instant issue, relevant part of the decision of the tribunal in Third Member's cases(supra) is crucial and therefore reproduced herein below for the sake of brevity and ready reference :- In view of the foregoing discussion, I am satisfied that the penalty was wrongly imposed and confirmed in all the four appeals under consideration. I agree with the Ld. JM in striking down all the penalty orders. The question posed is, therefore, answered in affirmative to the effect that where the satisfaction of the AO while initiating penalty proceedings u/s 271(1)(c) I.T. Act, 1961 is with regard to the alleged concealment of income by the assessee, whereas the imposition of penalty is for concealment/furnishing inaccurate particulars of income , the levy of penalty is not sustainable. 10. Though we are in agreement with the Ld. D R that every case is distinct one and unique in nature and must be decided in accordance with peculiar facts and circumstances of the case, however it is well settled law that litigation must come to an end and consistency is imperative to be observed. Question qua taking a contrary view to judgments of co-ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s open to him to recommend to the Chief Justice that the question be considered by a larger Bench. Judicial decorum, propriety and discipline required that he should not ignore it Our system of administration of justice aims at certainty in the law and that can be achieved only if Judges do not ignore decisions by Courts of coordinate authority or of superior authority. Gajendragadkar, C.J. observed in Lala Shri Bhagwan and Anr, v. Shri Ram Chand and Anr. It is hardly necessary to emphasis that considerations of judicial propriety and decorum require that if a learned single Judge hearing a matter is inclined to take the view that the earlier decisions of the High Court, whether of a Division Bench or of a single Judge, need to be re- considered, lie should not embark upon that enquiry sitting as a single Judge, but should refer the matter to a Division Bench, or, in a proper case, place the relevant papers before the Chief Justice to enable him to constitute a larger Bench to examine the question. That is the proper and traditional way to deal with such matters and it is founded on healthy principles of judicial decorum and propriety. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular of income , therefore it goes to prove that even the mind of the AO, while recording the satisfaction in Assessment Order, issuing the notice dated 28-03-2014 u/s 274 of the Act and while imposing the penalty as well, was indecisive and unclear under which limb, the penalty proceedings have to be initiated and under which limb the assessee had to reply in order to defend its case and under which limb the penalty warranted and supposed to be levied, therefore we are of the view that under these facts and circumstance, the penalty is not leviable as held by the various Courts including the Apex Court, hence, we have no hesitation to delete the penalty levied by the AO and affirmed by the Ld. CIT (A). 10. Now coming to the merits of the case, as we have already decided the appeal on legal ground and allowed the appeal of the assessee by quashing the penalty order, hence do not feel it appropriate to dwell into the merits of the case as the same shall amounts to futile academic exercise only. 11. In the result, the appeal filed by the assessee stands allowed. Order pronounced in open court on 22.07.2019. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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