9911796707
TMI Blog2022 (3) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... and in law, the CIT(A) ought not to have confirmed the levy of the impugned penalty under section 271(1)(c). The appellants further, contend that there is total non-application of mind by the Assessing Officer inasmuch as he has initiated and levied the impugned penalty for both the limbs of section 271(l)(c) that is, for concealment of particulars of income and furnishing inaccurate particulars thereof; thus, the levy of the impugned penalty is without application of mind. The appellants further, contend that there is total non- application of mind by the Assessing Officer inasmuch as he has referred to Explanation 1(B) to section 271(1) for the purpose of levying the impugned penalty for concealment of particulars of income and furnishing inaccurate particulars of income though Explanation 1(B) to section 271(1) is only applicable to concealment of particulars of income; thus, the levy of the impugned penalty is without application of mind. The appellants crave leave to add to, alter or amend the aforestated ground of appeal." 2. Fact in brief is that return of income declaring income of Rs. 1,75,70,820/- was filed on 04.12.1999. The case was subject to scrutiny assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of jurisdictional High Court of Bombay in the case of Mohd. Farhan A. Shaikh Vs. DCIT (2021) 434 ITR 1 (Bom) wherein it is held that if there is a defect in not striking off the irrelevant matter the penalty cannot be levied. On the other hand the ld. Counsel has placed reliance on the decision of the lower authorities. 5. Heard both the side and the perused the material on record. Without retreating the facts as elaborated above the assessing officer vide order u/s 271(1)(c) of the Act, dated 30.03.2019 has levied penalty of Rs. 84,03,212/- being 100% taxed sought to be evaded in respect of disallowance of depreciation and disallowance of brought forward losses and unabsorbed depreciation as mentioned supra in this order. In para 5 of the penalty order the assessing officer categorically stated that the assessee has furnished inaccurate particulars of income and thereby concealment of its actual income in respect of the following addition: "5. In view of the above discussion it is amply clear that the assessee furnished inaccurate particulars of income and thereby concealment of its actual income in respect of the following disallowance/additions: Sr. No. Description Amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penal ty proceedings culminate under a different statutory scheme that remains distinct from assessment proceedings, therefore, assessee must be informed of grounds of penal ty proceedings only through statutory notice - Held, yes - Whether even if notice contains no caveat that inapplicable portion be deleted, it is in interest of fairness and justice that notice must be precise, it should give no room for ambiguity - Held, yes [Paras 181 and 188][ In favour of assessee]" 7. Further, we have also perused the decision of coordinate Bench of the ITAT, Mumbai in the case of M/s Bhavya Shashank Shanbhag Vs. DCIT in ITA No. 4630Mum/2019 vide order dated 09.07.2021, wherein the co-ordinate Bench in identical issue and similar facts has deleted the penalty after following the decision of Hon'ble Jurisdictional High Court in the case of Mohd. Farhan A. Shaikh (supra). The relevant part of the decision of co-ordinate Bench is reproduced as under:- "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it, "the socalled 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. Kaushalya case (supra) .In fact, for one assessment year, it set aside the penalty proceedings on the grounds of nonapplication of mind and prejudice. 186. That said, regarding the other assessment year, it reasons that the assessment order, containing the reasons or justification, avoids prejudice to the assessee. That is where, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x 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 show-cause 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 generic notice. 3.2. Respectfully following the aforesaid decision, we hold that the penalty levied by the ld. AO for both the assessment years is hereby directed to be deleted. 3.3. Since the relief is granted to the assessee on this aspect by adjudicating the ground No.1(e), the other grounds raised by the assessee for both the years on legality of levy penalty as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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