TMI Blog2022 (1) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... c) - Decided in favour of assessee. - ITA No. 7002/Mum/2019 - - - Dated:- 4-1-2022 - Shri Vikas Awasthy, Judicial Member And Shri Amarjit Singh, Accountant Member For the Appellant : Shri Rahul Hakani, AR For the Respondent : Shri Pankaj Kumar Sr. AR CIT ORDER PER AMARJIT SINGH, AM: The appeal is directed against the order of learned CIT(A) in confirming the order of penalty of ₹3,30,000/- levied under section 271(1)(c) of the Act. 2. During the course of appellate proceedings before us, the assessee has also raised revised ground of appeal stating that the notice under section 274 read with section 271(1)(c) dated 18th March 2015 is bad in law and it does not specify whether the penalty is levied for concealment of income or furnishing of inaccurate particular of income. The relevant ground read as under: 1. The learned CIT(A) erred in confirming order of penalty of ₹3,30,000/- levied under section 271(1)(c) on addition of deemed dividend U/s 2(22)(e) without appreciating that the Notice under section 274 read with section 271(1)(c) dated 18.03.2015 is bad in law as it does not specify whether the penalty is levied for concealment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities. 7. Heard both the sides and perused the materials available on record. The case of the assessee was reopened on the basis of information received that assessee had obtained loan from Growmore Investment and Developers Private Limited in which the assessee was having shareholding of 11.50%. Therefore, the Assessing Officer has added the amount of advance taken from the said company of ₹10 lacks to the total income of the assessee as deemed dividend under section 2(2)(e) of the Act. The Assessing Officer has levied the penalty of ₹3,30,000/- for concealment of particulars of income. With the assistance of learned representative, we have gone through the notice under section 274 read with section 271(1)(c) dated 18th March 2015, the relevant part of the notice is reproduced as under:- Whereas in the course of proceedings before me for the Assessment year 2009-10 appears that you have concealed the particulars of your income or furnished inaccurate particulars of such income. You are hereby requested to appear before me on 31.03.2015 at 11.30 AM and show cause why an order imposing a penalty on you should not be made under section 271(1)(c) of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted by the assessee by stating as to whether the assessee has concealed his particulars of income or had furnished inaccurate particulars of income. 3.1. We find that this issue is no longer res-integra in view of the Full Bench decision of the Hon ble Jurisdictional High Court in the case of Mohd. Farhan A Shaikh vs. DCIT reported in 434 ITR 1 (Bom). The relevant portion of the said order is reproduced hereunder:- 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 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 proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n penalty proceedings has not met our acceptance. Question No. 3: What is the effect of the Supreme Court's decision in Dilip N. Shroff Case (supra) on the issue of non-application 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 particulars. 188. We may, in this context, respectfully observe that a contravention of a mandatory condition or requirement for a communication to be valid communication is fatal, with no further proof. That said, even if the notice contains no caveat that the inapplicable portion be deleted, it is in the interest of fairness and justice that the notice must be precise. It should give no room for amb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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