TMI Blog2023 (4) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Thus notice u/s. 274 r.w.s. 271(l)(c) of the Act was 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. Thus penalty order passed u/s. 271(l)(c) of the Act by the Assessing Officer is bad in law - Decided in favour of assessee. - I.T.A No. 6051/Del/2019 - - - Dated:- 11-4-2023 - Shri G. S. Pannu, Presiden And Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Dr. Rakesh Gupta, Advocate; Shri Somil Agarwal, Adv. Shri Deepesh Garg, Adv. For the Department : Shri Anuj Garg, Sr. D. R.; ORDER PER C. N. PRASAD, J. M. : 1. This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-9 [hereinafter referred to CIT (Appeals)] New Delhi, dated 1.05.2019 for assessment year 2012-13. 2. The assessee has raised the following substantive grounds of appeal:- 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in sustaining the penalty u/s 271(1)(c) on the disallowance of Rs. 5,26,469/- and that too without considering the facts and ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that since the notices issued u/s 274 read with section 271(1)(c) of the Act did not specify the limb for which or the charge for which it was issued the penalty order passed pursuant to such notice is bad in law. On the other hand, the Ld. DR referring to the assessment order submits that the penalty was levied for the concealment of particulars of income. 5. Heard rival submissions perused the orders of the authorities below and the decisions relied on. On perusal of the notices issued u/s 274 read with section 271(1)(c) of the Act we observe that the notice was issued stereotyped and the Assessing officer has not specified any limb or charge for which the notice was issued i.e., either for concealment of particulars of income or furnishing of inaccurate particulars of such income. It can be seen from the notice issued u/s 274 read with section 271(1)(c) of the Act, Assessing Officer did not strike off irrelevant limb in the notice specifying the charge for which notice was issued. 6. We observe that an identical issue came up before the Hon ble Bombay High Court (full bench at Goa) in the case of Mr. Mohd. Farhan A. Shaikh vs. ACIT [434 ITR (1)] and the Hon ble Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lished that prejudice is caused to the concerned person by the procedure followed . Kaushalya doses 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 Kaushalya. 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, we reckon, the reasoning suffers. Kaushalya's insistence that the previous proceedings supply justification and cure the defect in penalty proceedings has not met our acceptance. Question No. 3: What is the effect of the Supreme Court's decision in Dilip N. Shroff on the issue of non-application of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. Conclusion: We have, thus, answered the reference as required by us; so we direct the Registry to place these two Tax Appeals before the Division Bench concerned for further adjudication. 7. As could be seen from the above the Hon'ble Bombay High Court (Full Bench at Goa) in the case of Mr. Mohd. Farhan A. Shaikh v. ACIT [(2021) 434 ITR 1 (Bom)] while dealing with the issue of non-strike off of the irrelevant part in the notice issued u/s.271(l)(c) of the Act, held that assessee must be informed of the grounds of the penalty proceedings only through statutory notice and an omnibus notice suffers from the vice of vagueness. 8. In the case of PCIT Vs. Sahara India Life Insurance Co. Ltd. (supra) the Hon ble jurisdictional Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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