Point of Law: Section 11 of Code of Civil Procedure, 1908, which reads as res judicata.

JUDGMENT :

K.Somashekar J.

1. This appeal is directed against the order passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru in ITA No.1844/Bang/2013, dated 29.07.2016 (for short “ITAT”) with a prayer to allow the appeal by setting aside the said order and to confirm the order passed by the Deputy Commissioner of Income Tax, Central Circle-1(3) Bengaluru (for short “DCIT”) for the Assessment Year 2006-07 and to pass such other suitable order as deemed fit, in the facts and circumstance of the case.

2. Heard the learned standing counsel Shri Y.V. Raviraj for the appellant/revenue and the learned counsel Shri Mayank Jain for the respondent/assessee. Perused the order dated 29.07.2016 passed by the ITAT in ITA Nos.1812 & 1844/Bang/2013 for the Assessment Year 2006-07.

3. The factual matrix of this appeal are as under:

The appeal is preferred by the assessee / respondent against the separate orders dated 24.09.2013 of the CIT (Appeals)-VI, Bengaluru for the Assessment Year 2006-07 confirming the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 (for short “the Act, 1961”).

4. It is relevant to refer to the impugned order dated 29.07.2016, which is challenged under this appeal. Undisputedly the Assessing Officer has not identified in the notice as to whether penalty proceedings are being initiated for concealment of income or furnishing inaccurate particulars of income. These are the contentions made and the same were considered by the aforesaid Tribunal keeping in view the various citations which were facilitated, and also extracted in the impugned order.

“The order of the learned lower authorities u/s. 271(1)(c) is liable to be cancelled for the reason that the notice u/s. 274 does not strike off the portion relating to levy of penalty for delay in filing Return of Income and also does not indicate whether it is a case of "Concealment of income" or "furnishing of inaccurate particulars of income" and also for the further reason that even the satisfaction recorded by Learned AO does not indicate whether it is a case of concealment of income or furnishing of inaccurate particulars of income.

It is prayed that this Hon'ble ITAT may be pleased to cancel the penalty levied u/s. 271(1)(c) in the interests of equity and justice."

5. On account of the defective notice issued for initiation of penalty proceedings, the penalty order passed by the Assessing Officer is not sustainable in the eyes of law and thereafter set aside the order of the CIT (Appeals) as well as the Assessing Officer and delete the penalty on account of wrong initiation of penalty proceedings. Since the penalty proceedings are quashed, no justification to deal with the appeals on merits, as it becomes academic and allowed the appeals of the assessee by order dated 29.07.2016, which is under challenge in this appeal.

6. It is relevant to refer the proceedings in ITA No.084/DCIT, CC 1(3)/CIT(A)-VI/B’lore/2010-2011, dated 24th September 2013 that the appeal is preferred against the penalty under Section 271(1)(c) of the Act, 1961 levied by the Assessing Officer for Concealment of Income as detailed in the aforesaid order for a sum of Rs.6,50,00,000/-. The grounds of appeal raised are with regard to the levy of the penalty. Shri B.P.Sachin Kumar, C.A. appeared on behalf of the appellant/revenue. Written submissions Lwere filed and the appellant’s counsel requested that the case may be finalized on the basis of the written statement. Accordingly, the Assessing Officer noted on the basis of seized documents that there was difference in investment made by the Managing Partner, Shri G. Janardhan Reddy in respect of the land at Lillipur Hamlet, Hyderabad by Rs.18.75 crore. The same is also revealed in the orders relating to the Assessment Year 2006-07 in respect of M/s. Ennoble Construction, Ballari.

7. It is stated that the order passed by the Competent Authority has clearly brought on record that it is a case for levy of penalty under Section 271(1)(c) fo