TMI Blog2021 (12) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... t would not be permissible for us to disregard this aspect and take a different view of the matter. Accordingly substantial question of law no. III is answered by holding that since the show cause notice dated 12.02.2008 does not indicate whether there was concealment of particulars of income or furnishing of incorrect particulars of such income, the same would vitiate the penalty proceedings. Since it has been found that the show cause notice dated 12.02.2008 that was issued to the Assessee was vague and the penalty proceedings initiated on that basis were vitiated, it would not be necessary to answer substantial questions of law as framed at serial nos. I and II. This is for the reason that the said substantial questions pertain to the merits of the adjudication of the proceedings under Section 271(1)(c) - Once it is found that the show cause notice dated 12.02.2008 issued to the Assessee was not in accordance with law, the orders passed thereon would automatic cease to operate. - Decided in favour of assessee. - INCOME TAX APPEAL NO.5 OF 2016 - - - Dated:- 22-12-2021 - A.S.CHANDURKAR and G.A.SANAP, JJ. Shri K.P.Dewani, Advocate for appellant. Shri S.N.Bhattad, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mohd. Farhan A. Shaikh vs. Deputy Commissioner of Income Tax, Central Circle 1, Belgaum 2021 (434) ITR 1 (Bombay), it was submitted that such defect in the show cause notice of not mentioning the basis for imposition of penalty resulted in vitiating the penalty proceedings. It was his submission that under Section 271(1)(c) of the said Act penalty was contemplated either for concealment of income or for furnishing incorrect particulars of the same or both. It was necessary for the Authority issuing the show cause notice to specifically indicate as to whether there was any concealment of particulars or furnishing of incorrect details on the part of the Assessee or both. In that regard the learned counsel referred to the decisions in Income Tax Appeal No.796 of 2016 with connected appeal (The Pr. Commissioner of Income Tax-17 Vs. Hafeez S. Contractor ) decided on 11.12.2018, Commissioner of Income Tax vs. Samson Pernchery (2017) 98 CCH 0039 (Mum.), Principal Commissioner of Income Tax (Central) vs. Goa Coastal Resorts and Recreation Pvt. Ltd. (2019) 106 CCH 0183 (Mum.) and in Tax Appeal Nos.70/2018 with connected appeals (The Principal Commissioner of Income Tax, Panji vs New E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in MAK Data Private Limited vs. Commissioner of Income Tax-II (2014) 1 SCC 674, Commissioner of Income Tax, Delhi vs Atul Mohan Bindal (2009) 9 SCC 589 and Union of India and others vs. Dharmendra Textile Processors and Others (2008) 13 SCC 369 to substantiate his contentions. According to him, since the decision in Dilip Shroff (supra) had been held as not laying down the correct law in Dharmendra Textile Processors and others (supra) no reliance could be placed on the decision in Dilip Shroff (supra). It was thus submitted that since it was found that the Assessee had concealed income on account of which penalty proceedings had been initiated, there was no reason to interfere with the order passed by the Tribunal. 6. We have heard the learned counsel for the parties at length and we have given due consideration to their respective submissions. At the outset, we may refer the judgment of this Court in Ventura Textiles Ltd. (supra) that was relied upon by the learned counsel for the Assessee while urging that even if the question as regards validity of the show cause notice was not raised before the Tribunal, the same could be raised in the present appeal under Section 260A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff the irrelevant matter-vitiate the penalty proceedings? 9. After considering various decisions of the Hon ble Supreme Court and of this Court including the decision in Dilip Shroff (supra) the Full Bench answered the aforesaid question as under: 181. It does. The primary burden lies on the Revenue. In the assessment proceedings, it forms an opinion, prima facie or otherwise, to launch penalty proceedings against the assessee. But that translates into action only through the statutory notice under Section 271(1)(c), read with Section 274 of the IT Act. True, the assessment proceedings form the basis for the penalty proceedings, but they are not composite proceedings to draw strength from each other. Nor can each cure the other s defect. A penalty proceeding is a corollary; nevertheless, it must stand on its own. These proceedings culminate under a different statutory scheme that remains distinct from the assessment proceedings. Therefore, the assessee must be informed of the grounds of the penalty proceedings only through statutory notice. An omnibus notice suffers from the vice of vagueness. 182. More particularly, a penal provision, even with civil consequences, mu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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