SHRI KULWANT SINGH BHATIA,INDORE vs. THE ADDL. CIT, RANGE-3, INDORE

Shri Kulwant Singh Bhatia v. Addl. CIT-Range 3(1) Indore/I.T.A. No. 414 to 419/Ind/2012/A.Y.: 02-03 to 07-08 Page 1 of 23

आयकर अपीलीय अिधकरण, इंदौर �यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE �ी सी.एम.गग�, �याियक सद�य तथा �ी ओ.पी.मीना, लेखा सद�य के सम� BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER आ /. सं . अ . I.T.A No.414 to 419/Ind/2012 �नधा�रण वष�/Assessment Year : 2002-03 to 2007-08 Shri Kulwant Singh Bhatia, v. Addl. CIT Range 3(1), 178 Vishnupuri Annexe, Indore Indore �था . सं . ले . /PAN: AEKPB 7313K अपीलाथ�/Appellant ��यथ�/Respondent

अपीलाथ� क� ओर से/Appellant by Shri Anil Garg, CA ��यथ� क� ओर से/Respondent by Shri Mohd. Javed, Sr. D.R. सुनवाई क� तारीख/Date of hearing 08-08-2017 उ�ोषणा क� तारीख/Date of 11-08-2017 pronouncement आदेश /O R D E R

O. P. MEENA AM. 1. These six appeals filed by the Assessee is directed against the separate orders of ld. Commissioner of Income tax (Appeals)- I, Indore, [in short referred to as the CIT (A)] each dated 30.04.2012. These appeals pertains to Assessment Years 2002- 03 to 2007-08, arisen from the penalty order passed under section 271(1) (c) of Income Tax Act, 1961 (herein after referred to

Shri Kulwant Singh Bhatia v. Addl. CIT-Range 3(1) Indore/I.T.A. No. 414 to 419/Ind/2012/A.Y.: 02-03 to 07-08 Page 2 of 23

as “the Act”) by the Addl. CIT Range- 3(1), Indore dtd. 29-06-

2010 (hereinafter referred as the AO). These six appeals involve a

common issue, arising out of the same set of facts and were

heard together. As a matter of convenience, therefore, all the six

appeals are being disposed of by way of this consolidated order. 2. While material facts of all these cases are the same,

inasmuch as all the six appeals before us relates to the assessee

Shri Kulwant Singh Bhatia who belongs to Bhatia Group of

Indore, in which search and seizure operation carried out on 25

September 2007 at various business premises and residential

premises. This group is engaged in the coal trading. We are

taking up the appeal for the assessment year 2002-03, there

findings of which would mutatis mutandis apply for other

assessment years as well. The following grounds of appeal have

been taken I.T.A. No.414/Ind/2016 for the assessment year

2002-03:

Shri Kulwant Singh Bhatia v. Addl. CIT-Range 3(1) Indore/I.T.A. No. 414 to 419/Ind/2012/A.Y.: 02-03 to 07-08 Page 3 of 23

3a) That, the learned CIT (A) grossly erred in confirming the imposition of penalty, which is solely based on the additional income declared by the appellant in his return of income furnished under section 153A. 3b) That, without prejudice to the above, the learned CIT (A) grossly erred in confirming the penalty which has been imposed by the learned AO without first reaching to any objective satisfaction as contemplated under the provisions of sub-section (1) of section 271 of the Act.

appeal, the assessee has also filed an additional ground of appeal

against the levy of penalty under section 271(1)(c) as under:

submitted that the additional ground of appeal be admitted as it

is being purely question of law, goes to the root of the matter and

no further inquiry is required for deciding the same as all facts

Shri Kulwant Singh Bhatia v. Addl. CIT-Range 3(1) Indore/I.T.A. No. 414 to 419/Ind/2012/A.Y.: 02-03 to 07-08 Page 4 of 23

are already on record and issue arise out of impugned order. The

ld. A.R. also placed reliance on following decisions: National

Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) [1999]

157 CTR 249 (SC), and National News Print & Paper Mills Ltd.

223 ITR 688 (MP). 4. On the other hand, the Ld. Sr. D.R. opposed the admission

of additional ground. 5. We have considered the facts and material on record. The

additional ground being legal one, hence, admitted. Reliance is

placed on the decision of Apex Court in the case of National

Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) : [1999]

157 CTR 249 (SC) wherein it was held as under:

The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal (vide, e.g., CIT v. Anand Prasad [1981] 128 ITR 388 (Delhi), CIT v. Karamchand Premchand P. Ltd. [1969] 74 ITR 254 (Guj) and CIT v. Cellulose Products of India Ltd. [1985] 151 ITR 499 (Guj) [FB]). Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. The reframed question, therefore, is answered in the affirmative, i.e., the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of

Shri Kulwant Singh Bhatia v. Addl. CIT-Range 3(1) Indore/I.T.A. No. 414 to 419/Ind/2012/A.Y.: 02-03 to 07-08 Page 5 of 23

the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits.

In view of the wide powers that the Tribunal is vested with as referred to and spelt out by Apex Court in National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383, the Tribunal cannot be precluded from considering the questions of law arising in an assessment proceeding not raised earlier, and restricted to issues arising out of appeal before the Commissioner. [Para 16] Thus, the Tribunal was justified in law in recording a finding on an issue which was not raised by the assessee either before the Assessing Officer or before the Commissioner (Appeals) but was raised for the first time before the Tribunal and that too in an appeal filed by the Department. 7. In view of above facts and circumstances, the additional

ground can be admitted where facts are already on record and

there is pure question of law and no further enquiry or

investigation on facts is required. In view of these facts and

circumstances, the additional ground is allowed is to be admitted

and the same is therefore, being disposed-of on merits in the

succeeding paras.

Shri Kulwant Singh Bhatia v. Addl. CIT-Range 3(1) Indore/I.T.A. No. 414 to 419/Ind/2012/A.Y.: 02-03 to 07-08 Page 6 of 23

2007, wherein the assessee admitted additional income of Rs.

1,25,48,154. Consequently, a notice u/s 153A was issued and

served upon an assessee for the assessment year under appeal.

In response to notice under section 153A for above assessment

years, the assessee has shown additional income of Rs. 2,05,21,

580/- in the returns of income filed under section 153A of the

Act for the assessment year 2002-03 to 2007-08 as against the

surrender made during search at Rs. 1,25,48, 154 under section

132(4) of the Act. Brief facts related to Assessment year 2002-03

are that the assessee has filed his return of income declaring

total income at Rs.12,48,650/- including additional income of

Rs.9,28,400/-.The assessment was completed u/s. 153A on

December 18, 2009 by accepting returned income under section

153A for A.Y. 2002-03. During the course of assessment

proceedings, the AO noted that the assessee has shown

additional income due to search hence, penalty proceeding under

section 271(1) (c) were initiated for all the assessment years.

Further, the AO noted that the assessee has offered an additional

income of Rs.9,28,400/- in the return of income filed u/s 153A.

Since the said income was not declared in the return filed u/s

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139, hence the AO initiated penalty proceedings u/s 271(1) (c) of

the Act. The submissions filed by the assessee has been

reproduced by the AO in the penalty order. The AO held that after

insertion of Explanation 5A of Section 271(1)(c) with effect from

01.06.2007, the legal position is very clear and penalty for

concealed income held to be levied. Since, the assessee has

declared undisclosed income only after the date of search.

Therefore, the fact that such income was offered u/s 132(4)

during search proceedings does not take the assessee’s case out

of the clutches of the above deeming provisions. In view of these

facts, the AO levied a penalty of Rs. 2,48,090/- being minimum

penalty @100% of the concealed income of Rs.9,28,400/-. In the

additional ground, the assessee has challenged the validity of

notice under section 271(1)(c). 9. Being aggrieved the assessee has filed an appeal before the

CIT (A). The assessee aggrieved with order of the AO filed appeal

before Ld. CIT (A) who has also confirmed the said penalty.

According to Ld. CIT (A) the provisions of section 271(1)(c)

together with Explanation 5A brings the assessee liable for

penalty in respect of additional income disclosed after search as

the same was based on incriminating material. Accordingly, the

Shri Kulwant Singh Bhatia v. Addl. CIT-Range 3(1) Indore/I.T.A. No. 414 to 419/Ind/2012/A.Y.: 02-03 to 07-08 Page 8 of 23

penalties imposed by the AO for the assessment years 2002-03 to

2007-09 were sustained. In addition, penalty of Rs.2,48,090/- for

the year under consideration was confirmed. 10. Being aggrieved, the assessee has filed this appeal before

the Tribunal. The ld. Counsel for the assessee submitted that the

additional ground of appeal taken under Rule 11 of Income Tax

Appellate Tribunal Rules 1963 is against the imposing penalty by

issuing vague and cryptic show-cause notice for imposition of

penalty without making the assessee aware of specific charge,

hence, penalty deserve to be cancelled. The ld. Counsel for the

assessee submitted income shown in these return were offered

u/s. 132(4) as well as returns filed under section 153A. These

incomes have been accepted in the assessment orders as such

without any variation and objection. The learned counsel

submitted that the blanket penalty proceedings were initiated in

all the cases under section 271(1) (c). The ld. Counsel for the

assessee took us through Paper Book Page No. 13 to 18 which

are the copies of show-cause notices under section 274 which are

vague and cryptic notice inasmuch as in the said notice, non

applicable clause was not struck off by the AO . The penalty

notices under section 274 read with section 271(1) (c) were

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issued in the typed format without the striking off either of the

two charges i.e. which is reproduced as under: “* have

concealed the particulars of your income or …...or

“furnished inaccurate particulars of income”. The ld. Counsel

for the assessee contended that show-cause notice under section

274 is not mere empty formality but it has a definite purpose to

make the assessee aware of the exact charges against him and

the case, which is required to meet out. A clear notice not only a

statutory requirement but even for the purpose of principle of

audi alteram partem which requires that no one should be

condemned unheard, a notice in clear term specifying the clear

charges against an assessee is required to be given by an

Assessing Officer before imposing a penalty. It was submitted

that by not striking off the inapplicable clause, the Ld. AO has

left the matter open for a complete guess work on the part of the

appellant for presuming charges leveled against him and in such

situation, it cannot be said that an effective opportunity of being

heard was given to the appellant as contemplated under section

274 of the Act. Thus, the penalty proceedings were initiated

without specifying any particulars or specific charge against the

assessee in either the assessment order or even the penalty

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notice. It is important to point out that no charge either of

“concealment of income” or “furnishing of inaccurate particulars”

was made in the assessment orders in all these cases. The

learned counsel referred the assessment order and submitted

that the perusal of the assessment order would show that it was

simply stated that penalty proceedings are initiated u/s. 271(1)(c)

and under section 271AAA . On this proposition the ld. Counsel

for the assessee relied in the case of CIT v. Manjunatha Cotton

Ginning Factory [2013] 359 ITR 565 (Kar)/263 CTR 153/ 93 DTR

111(Karn)[2012] 82 CCH 282 Kar HC, Asst. CIT v. M. P. State

Tourism Development Corporation [2015] 26 ITJ 225 (Trib-

Indore), Safina Hotels (P) Ltd. v. CIT [2016] 137 DTR 089 (Kar

HC) , Uma Shankar Agarwal v. DCIT [2016] 46 CCH 0057 (Kol-

Trib), Shabbir Allaudin Latiwala v. DCIT [2011] 29 CCH

0713(Rajkot-Trib) , Dilip N Shroff v. JCIT [2007] 291 TTR 519

(SC), Rishi Kumar Agarwal v. DCIT [2017] 6 TMI 396(Kol-Trib)

,Anand Satish Kumar Bhutada v. IKTO [2017] 5 TMI 482 (Pune-

Trib) , Siddhi Home Makers v. ITO 5 TMI 121 (ITAT-Mum) [2017]

and CIT v. SSA`s Emerald Meadows [2016] 8 TMI 1145(SC) in

support of his claim. It was submitted in the case of CIT v.

Manjunatha Cotton Ginning Factory [2013] 359 ITR 565

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(Kar)/263 CTR 153/ 93 DTR 111(Karn) it was observed in para

59 that the practice of the Department sending a printed form

where all the ground mentioned in Section 271 are mentioned

would not satisfy the requirement of law when the consequences

of the assessee not rebutting the initiated presumption is serious

in nature and he had to pay penalty from 100% to 300% of the

tax liability. As the said provisions have to be held to be strictly

construed, notices issued under section 274 should satisfy the

grounds, which he has to meet specifically. Otherwise, principle

of natural justice is offended if the show cause notice is vague.

Based on such proceedings, no penalty could be imposed on the

assessee. The ld. Counsel for the assessee further submitted that

following the this decision, the Hon`ble Karnataka High Court in

CIT v. SSA`S Emerald Meadows [2016] 73 taxmann.com 248 (SC)

[2016] 8 TMI 1145(SC) has dismissed the appeal of the Revenue,

which was filed against the ratio of reiterated by the Hon`ble

Karnataka High Court by which Hon`ble High Court quashed the

penalty on the ground of improper notice. The learned counsel

also submitted that even in the matter of search case where

penalty is levied under Explanation 5A to section 271(1)(c),

following decision of CIT v. Manjunatha Cotton Ginning Factory

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[2013] 359 ITR 565 (Karnataka), it has been held that the show

cause notice u/s. 274 was defective as it does not spell out the

grounds on which the penalty is sought to be imposed and

consequently, penalty imposed was cancelled. The ld. Counsel for

the assessee submitted that in the case of Asst. CIT v. M. P.

State Tourism Development Corporation [2015] 26 ITJ 225 (Trib-

Indore), this bench has held that the satisfaction of the AO about

concealment of particulars of income of “furnishing of inaccurate

particulars” of such income is essential before levying any

penalty under section 271(1)(c). The ld. Counsel for the assessee

also stated that in Dilip N Shroff v. JCIT [2007] 291 TTR 519 (SC)

at para 83 and 84 it was observed that standard preforma used

by the AO in issuing a notice without deleting inappropriate

words tantamount to non application of mind and thereby it is

not in accordance with principle of natural justice. With regard

to observation of the CIT (A), that Explanation 5A to section

271(1) (c) are applicable, it was submitted that question of

applicability would only arise when penalty proceedings are

properly initiated by issuing valid and proper show cause notice

under section 274. Therefore, this contention of the Ld. CIT (A)

becomes redundant and out of context. So far as reference to

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section 271(1B) is concerned the learned counsel submitted that

the same is not relevant in the context of the basic issue that the

penalty notices issued were defective as they did not spell out the

ground on which penalty sought to be imposed and therefore, not

validly issued. It was submitted that the issue of amendment of

section 271(1B) with retrospective effect was raised before the

Hon`ble Karnataka High Court in the case of CIT v. SSA`S

Emerald Meadows [2016] 73 taxmann.com 248 (SC) as evident

from the second substantial question of law raised by the

Department, which the Hon`ble High Court declined to admit.

Therefore, it was submitted that the Ld. CIT (A) grossly erred in

confirming the penalty levied under section 271(1) (c) in these

cases, which may kindly be deleted.

the lower authorities. The Ld. DR referring para 59 of the order of

CIT v. Manjunatha Cotton & Ginning Factory (supra) submitted

that in some cases case both offences in clause (c) are attracted.

The Ld. DR referred decision of Mak Data P. Ltd. vs. CIT [2013]

358 ITR 593(SC) and contended that the AO has to satisfy

whether penalty proceedings be initiated or not during the course

of assessment proceedings and the AO is not required to record

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his satisfaction in a particular manner or reduce in writing. The

Ld. DR further submitted that in the case of Nemichand Jain v.

ITO 2(1) Indore [I.T.A. No. 331/Ind/2015) dtd. 08.06.2016, the

SMC bench this Tribunal held that it is suffice where the AO has

mentioned that penalty proceedings are initiated separately. The

Ld. DR submitted that in the circumstances co Mahesh Gandhi

v. ACIT [I.T.A. No. 2976/Mum/2016 dtd. 27-02-2017, Mumbai

Bench where typed show-cause notice under section 271(1) (c) is

issued mentioning both limbs after recording satisfaction in

assessment order. Therefore, it was urged upon us to uphold the

order of Ld. CIT (A).

record, and gone through the assessment order and penalty order

and case laws relied by the parties. A perusal of the penalty order

reveals that the AO has rejected the contentions of the assessee

on the basis that the undisclosed income is declared as result of

search was not recorded in books of accounts before the date of

search. We find that the penalty notices under section 274 read

with section 271(1)(c)and u/s. 271AAA were issued in the typed

format without the striking off either of the two charges i.e. *

have concealed the particulars of your income or ……..or

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“furnished inaccurate particulars of income ”. Thus, the

penalty proceedings were initiated without specifying any

particular or specific charge against the assessee in either the

assessment order or even the penalty notice. It is important to

point out that no charge either of “concealment of income” or

“furnishing of inaccurate particulars” was made in the

assessment orders in all these cases. Further perusal of the

assessment order reveals that it is simply stated that penalty

proceedings are initiated u/s. 271(1)(c) and section 271AA. Thus,

we find that the charge against which the penalty is to be levied

was not specific. It is now a settled proposition that when the

charge itself is not a specific and is vague, penalty cannot be

levied. The Hon`ble Supreme Court in the case of T. Ashok Pai v.

CIT (2007) 292 ITR 11 (SC) has laid down that it is a settled

proposition that concealment of income and furnishing

inaccurate particulars of income carry different connotation. It is

settled proposition that where the charge for levying penalty is

not specific, the notice issued under section 271(1)(c) is bad in

law as it does not specify by which limb of section 271(1)(c) of the

Act under which it has been initiated. When the notice does not

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specify the charge for levy of penalty, it has been held that the

penalty cannot be levied.

Ginning Factory [2013] 359 ITR 565 (Kar)/263 CTR 153/ 93 DTR

111(Karn)[2012] 82 CCH 282 Kar HC, wherein, it was observed in

para 59 as under:

“the practice of the Department sending a printed form where all the ground mentioned in Section 271 are mentioned would not satisfy the requirement of law when the consequences of the assessee not rebutting the initiated presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be held to be strictly construed, notices issued under section 274 should satisfy the grounds, which he has to meet specifically. Otherwise, principle of natural justice is offended if the show cause is vague. On the basis of such proceedings, no penalty could be imposed on the assessee.”

Karnataka High Court in the case of CIT v. SSA`S Emerald

Meadows [I.T.A. No. 380/2015 dated 23rd November 2015]

wherein the Hon`ble High Court has dismissed the appeal of the

Revenue by observing that the Tribunal had allowed the appeal of

the assessee holding that the notice issued by the Assessing

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Officer under section 274 read with section 271(1)(c) of Income

Tax Act,1961 was 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. The Tribunal , while

allowing the appeal of the assessee, had relied on the decision of

the Division Bench of this Court rendered in the case of CIT V.

Manjunatha Cotton Ginning Factory [2013] 359 ITR 565. It was

further pointed out that SLP filed by the Department against this

decision was dismissed by Hon`ble Supreme Court on 05-08-

2016 reported as CIT v. SSA`S Emerald Meadows [2016] 73

taxmann.com 248 (SC). The learned counsel also submitted that

even in the matter of search case where penalty is levied under

Explanation 5A to section 271(1)(c), following decision of CIT v.

Manjunatha Cotton Ginning Factory [2013] 359 ITR 565

(Karnataka), it has been held that the show cause notice under

section 274 was defective as it does not spell out the grounds on

which the penalty is sought to be imposed and consequently,

penalty imposed was cancelled. The case law in the case of

Mahabir Prasad Agarwal v. ACIT Kolkata Tribunal in [I.T.A. No.

738 & 739/Kol/2013 dated 15-10-2016] also support the case of

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the assessee as the facts are identical with the facts of the

present appeals as in these appeals the show cause notices

issued before imposing penalty did not specified whether as to

the assessee is guilty of having furnished inaccurate particulars

of income or of having concealed particulars of such income. We

may also draw support from the recent decision of coordinated

bench Mumbai Tribunal in the case of Meharjee Cassinath

Holdings Pvt. Ltd. v. ACIT Circle 4(2) in I.T.A. No. 2555/

Mum/2012 order dtd. 28.04.2017 has also held that the notice

issued u/s. 274 by the AO is untenable as it suffers from the vice

of non-application of mind. In this case though the AO recorded

in the assessment order that penalty proceeding under section

271(1)(c) are to be initiated for furnishing of inaccurate

particulars of income, however, in the notice u/s. 274 both the

limbs of section 271(1)(c) were reproduced in the preforma notice

and the relevant clauses were not struck off. Whereas in the case

of the assessee no specific charges were levied in the assessment

order as well as penalty show cause notice.

Tourism Development Corporation (supra) which held that

satisfaction of the AO about concealment is must before levying

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penalty under section 271(1)(c). In this regard, our view is also

supported by the decision of Hon`ble Supreme Court in case of

CIT v. Suresh Chandra Mittal [2000] 251 ITR 9(SC), wherein the

Supreme Court has upheld the decision of the Hon`ble Madhya

Pradesh High Court CIT in the case of Suresh Chandra Mittal

[20OO] 241 ITR 124 (MP), wherein in similar circumstances; it

was held that the initial burden lies on the revenue to establish

that the assessee had concealed the income or had furnished

inaccurate particulars of such income. Thereafter, in so far as the

manner in which the statutory notice was required to be issued,

the Hon'ble Court concluded as: Notice u/s 274 of the Act

should be 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. 16. The Hon'ble Supreme Court in Dilip N. Shroff v. JCIT,

[2007] 291 ITR 519 (SC), has observed that while issuing the

notice under section 274 r/w section 271, in the standard

format, the Assessing Officer should delete the

inappropriate words or paragraphs, otherwise, it may

indicate that the Assessing Officer himself was not sure as

to whether he had proceeded on the basis that the assessee

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had concealed his income or had furnished inaccurate

particulars of income. We find that the AO has not struck

down the relevant word/sentence in the cyclostyled performa of

penalty show cause notice; therefore, the AO was not sure that

on what ground he is levying the penalty. The case laws Safina

Hotels (P) Ltd. v. CIT [2016] 137 DTR 089 (Kar HC), Uma

Shankar Agarwal v. DCIT [2016] 46 CCH 0057 (Kol-Trib), Shabbir

Allaudin Latiwala v. DCIT [2011] 29 CCH 0713(Rajkot-Trib) ,

Dilip N Shroff v. JCIT [2007] 291 TTR 519 (SC), Rishi Kumar

Agarwal v. DCIT [2017] 6 TMI 396(Kol-Trib) ,Anand Satish Kumar

Bhutada v. ITO [2017] 5 TMI 482 (Pune-Trib), Siddhi Home

Makers v. ITO 5 TMI 121 (ITAT-Mum) [2017] also supports the

contention of the assessee.

593(SC) relied by Revenue says that the AO has to satisfy

whether penalty proceedings are to be initiated or not during the

course of assessment proceedings, but in the instant case, the

AO stated he is satisfied the it is fit case for initiation of the

penalty proceedings under section 271(1)(c) and 271AA , meaning

thereby that the AO was not sure under which section he is

initiating penalty proceedings. Further, in show-cause notice the

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AO has not specified specific charges, hence, said decision is

distinguishable on facts and law. In the case of Nemichand Jain

(Supra) show-cause notice for penalty proceedings has

specifically stated that the penalty proceedings under section

271(1)(c) are separately initiated. However, in the case in hand,

there was no such mention. The decision of Mahesh Gandhi

(Supra) relied by the Ld. DR is also inapplicable as in that case

the assessee has filed revised computation of income on directors

fee and capital gain on HDFC mutual fund during the course of

assessment proceedings and the AO has specifically recorded

findings in para 5 of the assessment order is details about

“concealment of income”. Hence, facts of the said case are

entirely different.

judicial precedents as discussed above, we are of the considered

opinion that penalty levied under section 271(1)(c) is not

sustainable in law, as no specific charge was levied in penalty

show cause notices, hence, it is cancelled. Accordingly, all six

appeals of assessee are allowed. 19. As the learned representatives of both sides have fairly

agreed, that whatever we decide for the assessment year 2002-03

Shri Kulwant Singh Bhatia v. Addl. CIT-Range 3(1) Indore/I.T.A. No. 414 to 419/Ind/2012/A.Y.: 02-03 to 07-08 Page 22 of 23

in I.T.A. No. 414/Ind/2012 will equally apply for assessment year

2003-04 to 2007-08 as mentioned in above format of appeal of

this order, as well. All the material facts, but for differences in

quantum, are the same. There is no dispute on this aspect at all,

and the same consequences must, therefore, follow. Accordingly,

the penalties levied under section 271(1)(c) in all six appeals of

the assessee as mentioned above stands cancelled and our

observations for the assessment year 2002-03 above will

apply mutatis mutandis for all assessment years under appeals as

well. Accordingly, levy of penalty for the assessment years 2002-

03 to 2007-08 is cancelled and additional ground for all above

years is allowed. 20. Since we have allowed the appeal on additional ground as

discussed above, were therefore, refrain from deciding the other

grounds of appeal on merits as same become infructuous 21. In the result, all the ix appeals as mentioned above are

allowed. 22. The order pronounced in open court on 11.08.2017.

Sd/- Sd/-

( C.M. GARG) (O.P. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Shri Kulwant Singh Bhatia v. Addl. CIT-Range 3(1) Indore/I.T.A. No. 414 to 419/Ind/2012/A.Y.: 02-03 to 07-08 Page 23 of 23 �दनांक /Dated :11th August 2017 Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order

Assistant Registrar, Indore