TaxTMI 
TaxTMI 
2018 (1) TMI 673
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....ey and credit entries. The assessee explained the receipts in the bank account as towards share application money and the withdrawals were explained as investments or refund of share application money. The AO came to the conclusion that the assessee was mainly engaged in providing accommodation entries and deserve income in the form of commission from the beneficiaries of the accommodation entries. The AO estimated the income in the form of commission amount earned by the assessee at 0.20% of the cheques issued from the bank account in each of the aforesaid three assessment years and brought to tax commission income of the assessee not disclosed by the assessee which resulted in an addition of Rs. 2,30,350/- in A.Y.2006-07 a sum of Rs. 1,45,113/-, in A.Y.2007-08 a sum of Rs. 2,04,798/- in A.Y.2008-09. In respect of the addition made as above the AO initiated penalty proceedings u/s 271(1)(c) of the Act. 4. Apart from the above another addition of Rs. 2,02,000/- was made in A.Y.2007- 08 on account of unexplained cash deposits in the bank account. In A.Y.2008-09 an addition of Rs. 1,57,400/- was made on account of unexplained cash deposits in the bank account. Penalty proceedings u/....
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....the Tribunal. 8. The ld. DR submitted that it is not mandatory to specify the charge in the show cause notice u/s 274 of the Act. In this regard he placed reliance on certain judicial pronouncements. 9. We have considered the submission of the ld. DR, who also filed a written note on this aspect. Similar submissions made by the ld. DR in the case of Shri Jeetmal Choraria vs ACIT in ITA No.956/Kol/2016 order dated 01.12.2017 and this tribunal dealt with similar arguments of the ld. DR in the following paragraphs : "7. The learned DR submitted that the Hon'ble Calcutta High Court in the case of Dr.Syamal Baran Mondal Vs. CIT (2011) 244 CTR 631 (Cal) has taken a view that Sec.271 does not mandate that the recording of satisfaction about concealment of income must be in specific terms and words and that satisfaction of AO must reflect from the order either with expressed words recorded by the AO or by his overt act and action. In our view this decision is on the question of recording satisfaction and not in the context of specific charge in the mandatory show cause notice u/s.274 of the Act. Therefore reference to this decision, in our view is not of any help to the plea of the Rev....
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....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 not solely on the basis of defect in show cause notice u/s.274 of the Act. This is not factually correct. One of the parties before the group of Assessees before the Karnataka High Court in the case of Manjunatha Cotton & Ginning (supra) was an Assessee by name M/s.Veerabhadrappa Sangappa & Co., in ITA NO.5020 OF 2009 which was an appeal by the revenue. The Tribunal held that on perusal of the notice issued under Section 271(1)(c) of the Act, it is clear that it is a standard proforma used by the Assessing Authority. Before issuing the notice the inappropriate words and paragraphs were neither struck off nor deleted. The Assessing Authority was not sure as to whether she had proceed....
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....o.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 that the Assessee had concealed particulars of income and merely because in the show cause notice u/s.274 of the Act, there is no mention whether the proceedings are for furnishing inaccurate particulars or concealing particulars of income, that will not vitiate the penalty proceedings. In the present case there is no whisper in the order of assessment on this aspect. We have pointed out this aspect in the earlier part of this order. Hence, this decision will not be of any assistance to the plea of the revenue before us. Even otherwise this decision does not follow the ratio laid down by the Hon'ble Karnataka High Court in the case of Manjunatha Cotton & Ginning (supra) in as much as the ratio laid down in the said case was only with refe....