Income Tax (Central), Bengaluru v. Golden Peace Hotels And Resortspvt. Ltd

1 IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 13 OF 2019 THE PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL), BENGALURU Versus GOLDEN PEACE HOTELS AND RESORTSPVT. LTD. ... Appellant ... Respondent Ms. Amira Abdul Razaq, Standing Counsel for the Appellant.Mr. Parag S. Rao, Advocate for the Respondent. Coram:- M. S. SONAK & SMT. M. S. JAWALKAR, JJ.Date:- 3rd February, 2020 Oral Order ( Per M. S. Sonak, J) Heard Ms Razaq, learned Advocate for the Appellant andMr. Rao, learned Advocate for the Respondent. 2. Ms. Razaq, learned Advocate for the Appellant urgesadmission of this appeal on the following substantial question of law:- i) Whether on the facts and in the circumstances of the case,the Tribunal is right in law and fact, in deleting the penaltylevied u/s. 271(1)(c) of the Income Tax Act, 1961? 3. Ms Razaq, learned Advocate submits that in this case therevised returns filed by the Respondents indicated that the disclosures 2 were made only by piecemeal. Relying upon Mak Data (P.) Ltd v/s.Commissioner of Income Tax1, she submitsthat such disclosure does notrelieve the assessee of the requirement of paying penalty. She submitsthat the assessment order in the present case makes reference toconcealment and/or inaccurate particulars. In this view of the matter, shesubmits that the substantial question of law as aforesaid will arise and theview taken by the Commissioner (Appeals) as well as the ITAT inrelation to deletion of penalty, warrants interference. 4. Mr Rao, learned Advocate for the assessee points out thatthere is absolutely no finding as regards concealment or furnishing ofinaccurate particulars. He further points out that in the notice issued tothe assessee on 30/09/2016, the Deputy Commissioner had not evenbothered to strike down the relevant portion of the printed form in orderto indicate whether the satisfaction is based upon the concealment ofparticulars or furnishing of inaccurate particulars. He relies onCommissioner of Income Tax-11 v/s. Shri Samson Perinchery[2] and3 toPrincipal Commissioner of Income Tax v/s. New Era Sova Minesubmit that on the basis of such a defective notice, award of penalty cannever be sustained. 5. We have carefully examined the record as well as duly 1[(2013) 38 Taxman.com 448 (SC) 2[(017) 392 ITR 4] 3[2019 SCC OnLine Bom 1032] considered the rival contentions. Both the Commissioner (Appeals) aswell as the ITAT have categorically held that in the present case, there isno record of satisfaction by the AssessingOfficer that there was anyconcealment of income or that any inaccurate particulars were furnishedby the assessee. This being a sine qua non for initiation of penaltyproceedings, in the absence of such satisfaction, the two authorities havequite correctly ordered the dropping of penalty proceedings against theassessee. 6. Besides, we note that the Division Bench of this Court inSamson (supra) as well as in New Era Sova Mine (supra) has held thatthe notice which is issued to the assessee must indicate whether theAssessing Officer is satisfied that the case of the assessee involvesconcealment of particulars of income or furnishing of inaccurateparticulars of income or both, with clarity. If the notice is issued in theprinted form, then, the necessary portions which are not applicable arerequired to be struck off, so as to indicate with clarity the nature of thesatisfaction recorded. In both Samson Perinchery and New Era SovaMine (supra), the notices issued had not struck off the portion whichwere inapplicable. From this, the Division Bench concluded that therewas no proper record of satisfaction or proper application of mind inmatter of initiation of penalty proceedings. 4 4 7. In the present case, as well if the notice dated 30/09/16 (atpage 32) is perused, it is apparent that the inapplicable portions havenot been struck off. This coupled with the fact adverted to in paragraph(5) of this order, leaves no ground for interference with the impugnedorder. The impugned order is quite consistent with the law laid down inthe case of Samson Perinchery and New Era Sova Mine (supra) andtherefore, warrants no interference. 8. The contention based upon MAK Data (P.) Ltd.(supra) alsodoes not appeal to us in the peculiar facts of the present case. The noticein the present case is itself defective and further, there is no finding orsatisfaction recorded in relation to concealment or furnishing ofinaccurate particulars. 9. In Tax Appeal No.24 of 2019, based upon the identicalfacts, we decline to admit the appeal, in which, the same substantialquestion of law was urged. Therefore, following our order in Tax AppealNo.24 of 2019 as well, we are not inclined to admit this appeal. 10. For the aforesaid reasons, we hold that no substantialquestion of law arises in this appeal. Consequently, this appeal isdismissed. SMT. M. S. JAWALKAR, J. M. S. SONAK, J. at*