TMI Blog2021 (7) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... two appeals filed by the assessee pertaining to Assessment Year (A.Y.) 2013-14 and (A.Y.) 2011-12, are directed against the separate orders passed by the ld. Commissioner of Income Tax (Appeals), which in turn arise out of separate assessment order and penalty order passed by the ld.Assessing Officer under section 143(3) of the Income Tax Act and under section 271(1)(c) of the Income Tax Act, respectively. 2. Since these two appeals pertain to same assessee, therefore we have clubbed these two appeals and heard together, and a consolidated order is being passed for the sake of convenience and brevity. 3. Now, first, we shall take assessee s appeal in ITA No.380/SRT/2017, for the A.Y. 2013-14, wherein the grounds of appeal raised by the assessee are as follows: 1. On the facts and in the circumstances of the case the learned Commissioner of Income Tax(Appeals) has erred in not admitting the additional ground of appeal raised by the appellant company during the course of appellate proceedings for adjudication. The action of the learned Commissioner of Income Tax(Appeals) is not in accordance with the provisions of the Act and law. 2. On the facts and in the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings before your honours, we would like to humbly request to permit us to raise the following additional ground before your honour as under. 1. On appreciation of the facts and circumstances of the case and without prejudice to other grounds of appeal, the notional income by way of DEPB credits, DFRC receipts or other export incentives credited in the Profit and Loss Account be not considered as income liable for tax during the year in accordance with the decision of the Hon'ble Supreme Court in the case of CIT vs. Excel Industries Ltd. reported in 38 Taxman.com 100 (SC). 2. On appreciation of the facts and circumstances of the case and without prejudice to other grounds of appeal, the exclusion of DEPB credits, DFRC receipts or other export incentives for the purpose of calculating the profits eligible for deduction u/s 80IB of the Act shall be restricted to the net benefit after netting out the cost of obtaining the said benefit as specified and observed by the hon'ble Supreme Court in the case of Topman Exports vs. CIT (342ITR 49) The Revenue objects admissibility of the assessee's alternative/ additional ground. The assessee quotes law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icial to the Law. The appellant has neither concealed its income nor submitted any inaccurate particulars of income and the action of the Learned Commissioner of Income Tax (Appeals) is contrary to the facts of the case and law and deserves to be deleted. 02. On appreciation of the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Learned Assessing Officer imposing penalty U/s 271(1)(c) to the tune of Rs. 6,35,330/-. 10. Brief facts qua the issue are that assessee has filed its return of income for F.Y.2010-11, relevant to A.Y.2011-12 on 29.09.2011, declaring an income of ₹ 13,71,28,410/-. Subsequently, the case was selected for scrutiny and assessing officer has framed assessment u/s 143(3) of the I.T. Act, on 04.02.2014 assessing the income as ₹ 14,39,59,714/- after making the disallowance of deduction u/s 80IB in respect of its Dadra Unit and exclusion of following other incomes from the profits eligible for deduction u/s 80IB of the Act: (a). Foreign exchange gain ₹ 1,38,851/- (b).Scrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. The ld.Counsel for the assessee invited our attention on page no.1 of the paper book, wherein the penalty notice under section 271(1)(c) of the Act is placed. In the said penalty notice, no any charge has been specified by the ld.Assessing Officer. The relevant portion of penalty order is reproduced below: have concealed the particulars of the your income or . Furnished inaccurate particulars of such income. We note that there is no any definite charge/ accusation on the assessee, whether initiation of penalty proceeding is on account of concealment of income or on account of furnishing inaccurate particulars of income . We note that jurisdictional High Court of Bombay in the case of Mohd. Farhan A. Shaikh, 434 ITR 1 [Bom (FB)] held that penalty notice under section 271(1) (c ) of the Act must clearly specify charges against assessee. The notice in printed form without delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kaushalya noted that the assessment orders already contained the reasons why penalty should be initiated. So, the assessee, stresses Kaushalya, fully knew in detail the exact charge of the Revenue against him . For Kaushalya, the statutory notice suffered from neither non-application of mind nor any prejudice. According to it, the so-called ambiguous wording in the notice [has not] impaired or prejudiced the right of the assessee to a reasonable opportunity of being heard . It went onto observe that for sustaining the plea of natural justice on the ground of absence of opportunity, it has to be established that prejudice is caused to the concerned person by the procedure followed . Smt. Kaushalya case (supra) closes the discussion by observing that the notice issuing is an administrative device for informing the assessee about the proposal to levy penalty in order to enable him to explain as to why it should not be done . 185 No doubt, there can exist a case where vagueness and ambiguity in the notice can demonstrate non-application of mind by the authority and/or ultimate prejudice to the right of opportunity of hearing contemplated under section 274. So asserts Smt. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law which is conceived not only in individual interest but also in the public interest . 190. Here, section 271(1)(c) is one such provision. With calamitous, albeit commercial, consequences, the provision is mandatory and brooks no trifling with or dilution. For a further precedential prop, we may refer to Rajesh Kumar v. CIT [2007] 27 SCC 181, in which the Apex Court has quoted with approval its earlier judgment in State of Orissa v. Dr. Binapani Dei AIR 1967 SC 1269. According to it, when by reason of action on the part of a statutory authority, civil or evil consequences ensue, principles of natural justice must be followed. In such an event, although no express provision is laid down on this behalf, compliance with principles of natural justice would be implicit. If a statue contravenes the principles of natural justice, it may also be held ultra vires Article 14 of the Constitution. 191. As a result, we hold that Dilip N. Shroff Case (supra) treats omnibus showcause notices as betraying non-application of mind and disapproves of the practice, to be particular, of issuing notices in printed form without deleting or striking off the inapplicable parts of that gene ..... X X X X Extracts X X X X X X X X Extracts X X X X
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