TMI Blog2022 (12) TMI 1157X X X X Extracts X X X X X X X X Extracts X X X X ..... king off the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notices were issued. Thus we are of the opinion that, the penalty order passed u/s 271(1)(c) of the Act by the Assessing Officer and the order of the CIT(A) in confirming the penalty order are erroneous. Accordingly, the penalty order passed by the A.O for Assessment Year 2007-08 is hereby quashed. Accordingly, Assessee s Grounds of Appeal are allowed. - I.T.A. No. 9803/DEL/2019 - - - Dated:- 21-10-2022 - SHRI B. R. R. KUMAR, ACCOUNTANT MEMBER AND SH. YOGESH KUMAR U.S., JUDICIAL MEMBER Assessee by: Ms. Sumangla Saxena, Adv. Shri Shyam Sunder, Adv. Department by: Shri Kanav Bali, Sr. D. R.; ORDER PER YOGESH KUMAR US, JM This appeal is filed by the assessee for assessment year 2007-08 against the order of the ld. Commissioner of Income Tax (Appeals)-2, New Delhi [hereinafter referred to as CIT (Appeals)] dated 21.11.2019. 2. The assessee has raised the following substantive grounds of appeal:- 1. That learned Commissioner of Income Tax (Appeals) has erred both in law as well as on facts in confirming the levy of pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -. The addition has been made at Rs. 54,02,751/- as unexplained credits introduced in garb of share application money, similarly, addition u/s 68 of the Act was also made in respect of unexplained Sundry Creditors of Rs. 14,05,580/- and further depreciation of Rs. 53,978/- was disallowed and the fixed assets claimed to be purchased during the year under consideration. In the quantum appeal, the Ld.CIT(A) upheld partial addition made u/s 68 of the Act confirming the addition of Rs. 14,05,580/- made u/s 68 of the Act, in respect of Sundry Creditors, deleted the disallowance of depreciation and deleted the entire disallowance made out of the expenses. 4. The penalty proceedings has been initiated against the assessee and penalty order u/s 271(1)(c) of the Act has came to be passed on 28/03/2014. 5. As against the penalty order dated 28/03/2104, the assessee has preferred the appeal before the CIT (A) and the Ld.CIT (A) vide order dated 21/11/2019, dismissed the appeal filed by the assessee. 6. Aggrieved by the order dated 21/11/2018, the assessee has preferred the present appeal. 7. The Ld. Counsel for the assessee vehemently submitted that the Ld.CIT (A) has committed an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise, to launch penalty proceedings against the assessee. But that translates into action only through the statutory notice under section 271(l)(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 the vice of vagueness. 182. More particularly, a penal provision, even with civil consequences, must be construed strictly. And ambiguity, if any, must be resolved in the affected assessee'sfavour. 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 Kaushaiya does not lay down the correct proposition of law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Shroff, 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 I.T.A.No.1409/Del/2016 ambiguity. Therefore, Dilip N. Shroff disapproves of the routine, ritualistic practice of issuing omnibus show-cause notices. That practice certainly betrays nonappiication of mind. And, therefore, the infraction of a mandatory procedure leading to penai consequences 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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