TaxTMI 
TaxTMI 
2018 (3) TMI 1400
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.... u/s 143(3) was passed on 22.01.2014 which was found to contain errors as under :- On perusal of the Assessment records, it was noticed that the assessee company debited an amount of Rs. 2,22,763/- in P/L account as long term loss on mutual fund. As it was exempted income/loss u/s 10(38) of I.T.Act, it was not required to be taken in consideration in computation of taxable income. Moreover, Long Term Capital Loss was not eligible to be adjusted against business income as per provisions of section 71 of the I.T.Act. As the amount was not added back to the income of the assessee company, it resulted in underassessment of income of Rs;.2,22,763/- which was prejudicial to the interest of revenue." 4. In reply to the show cause notice as above, the Assessee sent a reply admitting that the aforesaid claim of the Assessee was not in accordance with law and that it was made inadvertently. The Principal CIT revised the order of assessment of the AO dated 22.1.2014 by his order dated 18.11.2015 passed u/s.263 of the Act as follows: "Regarding the capital loss of Rs. 2,22,763/- the assessee has itself submitted that it was inadvertently adjusted against business income. Considering thi....
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....nst the assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income. The ld. Counsel further brought to our notice that as against the decision of the Hon'ble Karnataka High Court the revenue preferred an appeal in SLP in CC No.11485 of 2016 and the Hon'ble Supreme Court by its order dated 05.08.2016 dismissed the SLP preferred by the department. The ld. Counsel also brought to our notice the decision of the Hon'ble Bombay High Court in the case of CIT vs Shri Samson Perinchery in ITA No.1154 of 2014 dated 05.01.2017 wherein the Hon'ble Bombay High Court following the decision of the Hon'ble Karnataka High Court in the case of CIT vs Manjunatha Cotton and Ginning factory (supra) came to the conclusion that imposition of penalty on defective show cause notice without specifying the charge against the assessee cannot be sustained. Our attention was also drawn to the decision of ITAT in the case of Suvaprasanna Bhattacharya vs ACIT in ITA No.1303/Kol/2010 dated 06.11.2015 wherein identical proposition has been followed by the Tribunal. 9. The learned DR made submissions which were similar to the submissions that were made by....
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....forming the assessee about the proposal to levy penalty in order to enable him to explain as to why it should not be done. Mere mistake in the language used or mere non-striking of the inaccurate portion cannot by itself invalidate the notice. The ITAT Mumbai Bench in the case of Dhanraj Mills Pvt.Ltd. followed the decision rendered by the Jurisdictional Hon'ble Bombay High court in the case of Kaushalya (supra) and chose not to follow decision of Hon'ble Karnataka High Court in the case of Manjunatha Cotton & Ginning Factory (supra). Reliance was also placed by the ITAT Mumbai in this decision on the decision of Hon'ble Patna High court in the case of CIT v. Mithila Motor's (P.) Ltd. [1984] 149 ITR 751 (Patna) wherein it was held that under section 274 of the Income-tax Act, 1961, all that is required is that the assessee should be given an opportunity to show cause. 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 (sup....
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....ticulars is valid and legal? 2. Whether the proceedings initiated by the Assessing Authority was legal and valid? Therefore the decision rendered by the ITAT Mumbai in the case of Earthmoving Equipment Service Corporation (supra) is of no assistance to the plea of the revenue before us. 11. In the case of M/S.Maharaj Garage & Co. Vs. CIT dated 22.8.2017 referred to in the written note given by the learned DR, which is an unreported decision and a copy of the same was not furnished, the same proposition as was laid down in the case of Smt.Kaushalya appears to have been reiterated, as is evident from the extracts furnished in the written note furnished by the learned DR before us. 12. In the case of Trishul Enterprises ITA No.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 th....