TMI Blog2021 (10) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... g v. Dy. Commissioner of Income Tax [ 2021 (7) TMI 381 - ITAT MUMBAI ] the Co-ordinate Bench has deleted the similar issue of penalty based on defective notices issued by the AO. - Decided in favour of assessee. - ITA No. 4198 to 4201/MUM/2019 - - - Dated:- 5-10-2021 - Shri S. Rifaur Rahman (Accountant Member) And Shri Ravish Sood (Judicial Member) For the Assessee : Mr. K. Shivaram, AR For the Revenue : Mr. Sanjay J. Sethi, DR ORDER PER S. RIFAUR RAHMAN, A.M. The captioned appeals have been filed by the assessee challenging the order of even date 25th April 2019, passed by the learned Commissioner of Mr. Mohan Manoj Dhupelia Income Tax (Appeals)-54, Mumbai, for the assessment years 2005-06, 2010-11, 2011-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 271(1)(c) r/w Explanation 1(A) of the Act of on addition of notional interest income Mr. Mohan Manoj Dhupelia accruing on alleged deposit of ₹2,34,64,398/- with LGT Bank Liechtenstein in the name of Ambrunova Trust. 5. Before us, the learned Counsel for the assessee submitted that there is no concealment of income in terms of Explanation 1(A) to section 271(1) (c) of the Act as the assessee had offered bona fide explanation and such explanation has not been found to be false. He further submitted that no penalty for concealment of income can be made on the addition made on estimated and notional basis and based on conjuncture and surmises to the income of the assessee which do not tantamount to the concealment of income. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bombay High Court in Mohd. Farhan A. Shaikh Vs. Dy. CIT, [2021] 125 taxmann.com 253 (Bom.) has considered this very issue. 8. Before us, it is brought to our notice that in the case of M/s.Bhavya Shashank Shanbhag v. Dy. Commissioner of Income Tax in ITA No. 4630, 4631/M/2019, the Co-ordinate Bench has deleted the similar issue of penalty based on defective notices issued by the AO. The relevant findings of the Coordinate Bench is reproduced below : 3. We have heard rival submissions and perused the materials available on record. We find that assessee for both the assessment years vide ground No.1(e) had raised the preliminary technical ground that in the show-cause notice issued by the ld. AO u/s.274 r.w.s. 271(1)(c) of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly. And ambiguity, if any, must be resolved in the affected assessee's favour. 183. Therefore, we answer the first question to the effect that Goa Dourado Promotions and other cases have adopted an approach more in consonance with the statutory scheme. That means we must hold that Kaushalya does not lay down the correct proposition of law. Question No. 2: Has Kaushalya failed to discuss the aspect of 'prejudice'? 184. Indeed, Smt. Kaushalya case (supra) did discuss the aspect of prejudice. As we have already noted, 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cceptance. Question No. 3: What is the effect of the Supreme Court's decision in Dilip N. Shroff Case (supra) on the issue of nonapplication of mind when the irrelevant portions of the printed notices are not struck off ? 187 In Dilip N. Shroff case (supra), for the Supreme Court, it is of some significance that in the standard Pro-forma used by the assessing officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done . Then, Dilip N. Shroff case (supra), on facts, has felt that the assessing officer himself was not sure whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inaccurate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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