TMI Blog2023 (10) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... FARHAN A. SHAIKH [ 2021 (3) TMI 608 - BOMBAY HIGH COURT] squarely applies to the facts of the assessee's case as the notice u/s. 274 r.w.s. 271(1)(c) dated 26.12.2016 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. Decided in favour of assessee. - Shri Challa Nagendra Prasad, Judicial Member For the Assessee : None; For the Department : Shri Om Parkash, 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)-I [hereinafter referred to CIT (Appeals)] Gurgaon, dated 30.03.2018 for assessment year 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a mere defect in the notice not striking off the irrelevant matter vitiate the penalty proceedings? 181. It does. The primary burden ties 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 non-application of mind and prejudice. 186. That said, regarding the other assessment year, it reasons that the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show-cause notices. That practice certainly betrays non-appiication of mind. And, therefore, the infraction of a mandatory procedure leading to penal 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 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 calam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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. 6. In the case of PCIT Vs. Sahara India Life Insurance Co. Ltd. (supra) the Hon ble jurisdictional High Court held as under:- The respondent had challenged the upholding of the penalty imposed under section 271(1)(c) of the Act, which was accepted by the Income Tax Appellate Tribunal. It followed the decision of the Karnataka High Court in CIT Vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565 (Karn.) and observed that the notice issued by the Assessing Officer would be bad in law if it did not specify in which limb of section 271(1)(c) the penalty proceedings had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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