TMI Blog2022 (12) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... bay High Court (Goa) squarely applies to the facts of the assessee's case as the notice u/s. 274 r.w.s. 271(1)(c) of the Act were issued without striking off the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notices were issued. A.O passed the assessment order without mentioning the exact limb of the penalty proceedings to be initiated against the assessee and consequent to the same issuance of the notice u/s 274 which the A.O. has fail to specify the limb under which the penalty proceedings having initiated and proceeded with, apparently goes to prove that above notices have been issued in a mechanical manner without applying the mind. Being so, the said notice issued u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee even after the registry issued notices to the assessee. 4. Considering the facts and circumstances of the case, we deem it fit to decide the appeal after hearing Ld. DR and on verifying the materials on record. 4. In the present case, the Assessing Officer while passing assessment order regarding initiation of penalty proceedings u/s 271(1)(c)has mentioned as under:- Assessment is completed u/s 143(3) of I.T. Act, 1961 on the total income 704660/- in the assessee status of individual issued notice of demand and challan. Issued Penalty u/s 274 read with Section 271(1)(c) of the I.T. Act, 1961. 5. Further in Page No. 2 has also mentioned as under:- Penalty proceedings 271(1)(c) are initiated separately. 6. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 proceedings only through statutory notice. An omnibus notice suffers from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osal 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 Kaushalya. In fact, for one assessment year, it set aside the penalty proceedings on the grounds of non-application 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, we reckon, the reasoning suffers. Kaushalya's insistence that the previous proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es assumes or implies prejudice. 189. In Sudhir Kumar Singh, the Supreme Court has encapsulated the principles of prejudice. One of the principles is that where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of 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 Raje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atio of this full bench decision of the Hon'ble Bombay High Court (Goa) squarely applies to the facts of the assessee's case as the notice u/s. 274 r.w.s. 271(1)(c) of the Act were issued without striking off the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notices were issued. 11. In this background of the above said legal position and having regarded to the manner in which A.O passed the assessment order without mentioning the exact limb of the penalty proceedings to be initiated against the assessee and consequent to the same issuance of the notice u/s 274 of the Act on 10/03/2015 which the A.O. has fail to specify the limb under which the penalty proceedings hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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