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Shri Harish Chander Kapoor, Prop. M/s. Lucky Enterprises, Gurgaon. Vs. The Income Tax Officer, Ward 2 (1), Gurgaon.
October, 14th 2019
         IN THE INCOME TAX APPELLATE TRIBUNAL
                DELHI BENCHES "C": DELHI

     BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
                        AND
     SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER

                   ITA.No.4442/Del./2016
                 Assessment Year 2012-2013

Shri Harish Chander
Kapoor, Prop. M/s. Lucky          The Income Tax Officer,
Enterprises, Gurgaon.
PIN 122001 PAN AICPK4192K    vs., Ward ­ 2 (1),
C/o. Shri Kapil Goel,
Advocate, F-26/124,               Gurgaon.
Sector-7, Rohini, Delhi.
        (Appellant)                      (Respondent)

                For Assessee : Shri Kapil Goel, Advocate.
                For Revenue : Ms. Rakhi Vimal, Sr. D.R.

              Date of Hearing : 09.10.2019
       Date of Pronouncement : 11.10.2019

                            ORDER

PER BHAVNESH SAINI, J.M.

           This appeal by Assessee has been directed against

the Order of the Ld. CIT(A)-1, Gurgaon, Dated 14.06.2016

for the A.Y. 2012-2013.


2.          We have heard the Learned Representatives of

both the parties.
                                2
                                     ITA.No.4442/Del./2016 Shri Harish
                                             Chander Kapoor, Gurgaon.


3.          Learned Counsel for the Assessee submitted that

prior to levy of the penalty under section 271(1)(c) of the I.T.

Act, A.O. issued show cause notice dated 02.03.2015 in

which A.O. has mentioned as under :


       "Have concealed the particulars of your income or

       furnished inaccurate particulars of such income."


3.1.        He has further submitted that A.O. issued

another show cause notice under section 271(1)(c) of the I.T.

Act, 1961, Dated 14.08.2015 for levy of the penalty in which

A.O. has mentioned as under :


       "During the course of assessment proceeding for the

       Asst. Year 2012-13 penalty proceedings u/s 271(l)(c) of

       the Income-tax Act, 1961 were initiated vide this office

       notice dated 02.03.2015 against you but no reply

       appears to have been received from you. You are hereby

       afforded another opportunity to show cause as to why

       the above penalty be not imposed upon you for the said

       default."
                                3
                                          ITA.No.4442/Del./2016 Shri Harish
                                                  Chander Kapoor, Gurgaon.


3.2.       He has submitted that A.O. similarly in the

assessment order has mentioned that he has satisfied that

assessee     has   concealed        his       particulars/furnished

inaccurate   particulars   of   income.        He     has,    therefore,

submitted that A.O. has not mentioned in the above show

cause notices as to under which limb of Section 271(1)(c) of

the I.T. Act, penalty proceedings under section 271(1)(c) of

the I.T. Act have been initiated i.e., whether for concealment

of particulars of income or furnishing of inaccurate

particulars of income. Therefore, penalty is liable to be

cancelled. He has submitted that issue is covered by the

Orders of ITAT, Delhi C-Bench in the case of Shri Gulshan

Kumar Jhurani, New Delhi vs., ACIT, Circle-37(1), New

Delhi, Dated 04.10.2019 in ITA.No.704/Del./2015 and

Hemla Embroidery Mills Private Ltd., Faridabad vs., DCIT,

Circle-1, Faridabad, Dated 04.10.2019 in ITA.No.4747/Del/

2016 in which the Tribunal following the decision of Hon'ble

Delhi High Court as well as Hon'ble Supreme Court, have

cancelled the penalty on identical facts.
                              4
                                   ITA.No.4442/Del./2016 Shri Harish
                                           Chander Kapoor, Gurgaon.







4.        The Ld. D.R. on the other hand relied upon the

Orders of the authorities below and submitted that this

point have not been raised by assessee and essentially it is

an issue of fact, therefore, this ground cannot be considered

in favour of the assessee and relied upon Order of ITAT,

Delhi G-Bench in the case of Mr. Vijay Aggarwal, Meerut vs.,

DCIT, Central Circle-1, Faridabad, Dated 09.08.2019 in

ITA.Nos.5434 & 5435/Del./2016 for the A.Ys. 2008-2009

and 2009-2010.


5.        We   have   considered   rival    submissions        and

perused the material on record. The contents of the notice

issued before levy of the penalty are reproduced above

which clearly show that A.O. has not mentioned as to for

which limb of Section 271(1)(c) of the I.T. Act penalty

proceedings    have   been   initiated     i.e.,   whether      for

concealment of particulars of income or furnishing of

inaccurate particulars of income. The ITAT, Delhi C-Bench

in the case of Shri Gulshan Kumar Jhurani, New Delhi vs.,

ACIT, Circle-37(1), New Delhi (supra), considering the

Judgment of Hon'ble Delhi High Court in the case of Pr. CIT
                               5
                                     ITA.No.4442/Del./2016 Shri Harish
                                             Chander Kapoor, Gurgaon.


vs., M/s. Sahara India Life Insurance Company Ltd., 2019

(8) TMI 409 (Del.) and Hon'ble Supreme Court in the case of

M/s. SSA Emerald Meadows reported in 73 taxmann.com

248 (SC) set aside the Orders of the authorities below in

same circumstances and cancelled the penalty. The Order is

reproduced as under :


       "IN THE INCOME TAX APPELLATE TRIBUNAL
              DELHI BENCHES "C": DELHI

    BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
                       AND
   SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER

                  ITA.No.704/Del./2015
                Assessment Year 2010-2011

Shri Gulshan Kumar                 The ACIT,
Jhurani, B-226A, Greater           Circle ­ 37 (1),
Kailash Part-1, New Delhi.    vs., New Delhi.
PIN ­ 110 048.                     PIN ­ 110 001.
PAN ACHPJ2336H
        (Appellant)                         (Respondent)

               For Assessee : Shri Ashwani Kumar, C.A.
                For Revenue : Shri S.S. Rana, CIT-D.R.

            Date of Hearing : 03.10.2019
      Date of Pronouncement : 04.10.2019

                             ORDER

PER BHAVNESH SAINI, J.M.
                          6
                                ITA.No.4442/Del./2016 Shri Harish
                                        Chander Kapoor, Gurgaon.


          This appeal by Assessee has been directed

against the Order of the Ld. CIT(A)-XX, New Delhi,

Dated 19.11.2014 for the A.Y. 2010-2011, challenging

the levy of penalty under section 271(1)(c) of the I.T. Act,

1961.


2.         We have heard the Learned Representatives

of both the parties and perused the material on record.


3.         The assessee in the present appeal has

challenged the levy of penalty under section 271(1)(c) of

the I.T. Act. The assessee also raised additional ground

of appeal stating therein that levy of the penalty is

unjustified because A.O. has not specified whether

penalty have been levied for concealment of particulars

of income or furnishing inaccurate particulars of income.

Since it is a legal issue, therefore, same is admitted for

disposal of the appeal.


4.         Learned Counsel for the Assessee referred to

show cause notice Dated 28.03.2013 which was issued
                            7
                                  ITA.No.4442/Del./2016 Shri Harish
                                          Chander Kapoor, Gurgaon.


 for levy of penalty in which the A.O. has mentioned as

 under:


       "Have concealed the particulars of your income or

       furnished inaccurate particulars of such income."


4.1.          He has, therefore, submitted that the issue is

covered by the Judgment of the Hon'ble Delhi High court

in the case of Pr. CIT vs. M/s. Sahara India Life

Insurance Company Ltd., 2019 (8) TMI 409 (Del.) vide

Judgment Dated 02.08.2019 in paras 21 and 22 held as

under :


       "21.        The   Respondent    had     challenged      the

       upholding of the penalty imposed under Section 271(1)

       (c) of the Act, which was accepted by the ITAT. It

       followed the decision of the Karnataka High Court in

       CIT v. Manjunatha Cotton & Ginning Factory 359

       ITR 565 (Kar) and observed that the notice issued by

       the AO would be bad in law if it did not specify which

       limb of Section 271(1) (c) the penalty proceedings had

       been initiated under i.e. whether for concealment of
                            8
                                  ITA.No.4442/Del./2016 Shri Harish
                                          Chander Kapoor, Gurgaon.


      particulars of income or for furnishing of inaccurate

      particulars of income. The Karnataka High Court had

      followed the above judgment in the subsequent order

      in Commissioner of Income Tax v. SSA's Emerald

      Meadows (2016) 73 Taxman.com 241 (Kar), the appeal

      against which was dismissed by the Supreme Court of

      India in SLP No.11485 of 2016 by order dated 5th

      August, 2016.






      22.   On this issue again this Court is unable to find

      any error having been committed by the ITAT. No

      substantial question of law arises."

5.          The Ld. D.R. on the other hand, relied upon

the Orders of the authorities below and relied upon

Judgment of Hon'ble Madras High Court in the case of

Sundaram Finance Ltd., vs. CIT [2018] 93 taxmann.com

250 (Mad.) and Judgment of Hon'ble Supreme Court in

the case of Sundaram Finance Ltd., vs. CIT [2018] 99

taxmann.com 152 (SC).
                               9
                                     ITA.No.4442/Del./2016 Shri Harish
                                             Chander Kapoor, Gurgaon.


6.          We have considered the rival submissions. In

this case, the A.O. issued show cause notice for levy of

penalty in which A.O. has mentioned both the limbs of

section 271(1)(c) of the Act that assessee has concealed

the    particulars of income or furnished inaccurate

particulars of such income. The issue of the notice is

bad in law as it did not specify under which limb of

Section 271(1)(c) of the I.T. Act, penalty proceedings

have    been      initiated    whether    for   concealment        of

particulars of      income      or furnishing      of   inaccurate

particulars of income. The issue is, therefore, covered by

Judgment of Hon'ble Karnataka High Court in the case

of    CIT   vs.    M/s.       SSAs   Emerald       Meadows        73

taxmann.com 241 (Kar.) and confirmed by the Hon'ble

Supreme Court reported in 73 taxmann.com 248 (SC).

Further, the Hon'ble Delhi High court in the case of Pr.

CIT vs. M/s. Sahara India Life Insurance Company Ltd.,

(supra) decided the same issue in favour of the

assessee. Following the same, we are of the view that

since notice is bad in law, therefore, the entire penalty
                                10
                                      ITA.No.4442/Del./2016 Shri Harish
                                              Chander Kapoor, Gurgaon.


       proceedings are vitiated and as such no penalty is

       leviable against the assessee. We, accordingly, set

       aside the Orders of the authorities below and cancel the

       penalty.


       7.         In the result, appeal of assessee allowed."


5.1.        Same view have been taken by ITAT, Delhi C-

Bench in the case of Hemla Embroidery Mills Private Ltd.,

Faridabad vs., DCIT, Circle-1, Faridabad (supra). In the

present case, assessee has raised a specific ground of

appeal that A.O. has miserably failed to point-out exactly

under which limb of Section, the impugned penalty

proceedings have been initiated and for want of which, the

present penalty have become invalid. Therefore, we are of

the view that the contention of the Ld. D.R. has no merit

and is accordingly rejected. Following the above decisions,

we are of the view that since the impugned show cause

notices issued by the A.O. are bad in law, therefore, entire

penalty proceedings are vitiated and as such, no penalty is

leviable against the assessee. We, accordingly, set aside the

Orders of the authorities below and cancel the penalty.
                              11
                                    ITA.No.4442/Del./2016 Shri Harish
                                            Chander Kapoor, Gurgaon.


6.         In the result, appeal of Assessee allowed.


           Order pronounced in the open Court.


 Sd/-                                  Sd/-
(PRASHANT MAHARISHI)                  (BHAVNESH SAINI)
ACCOUNTANT MEMBER                    JUDICIAL MEMBER

Delhi, Dated 11th October, 2019

VBP/-

Copy to
1.   The appellant
2.   The respondent
3.   CIT(A) concerned
4.   CIT concerned
5.   D.R. ITAT "C" Bench
6.   Guard File

                       // BY Order //



            Asst. Registrar : ITAT Delhi Benches :
                             Delhi.

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