TMI Blog2023 (12) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... application of income, ignoring the amendment brought u/s 11(6) of the Act w.e.f. 01.04.2015. This disallowance of deprecation was accepted by the assessee in the quantum proceedings. AO initiated penalty proceedings u/s 270A of the Act on 01.11.2019 wherein in the said notice issued u/s 274 r.w.s. 270A of the Act, the ld. AO had not struck off the irrelevant portion i.e. whether the assessee has underreported its income or misreported its income. We also find that different rates of penalty are stipulated in Section 270A of the Act for underreporting of income; for misreporting of income and for underreporting as well as misreporting of income. Hence, it is even more onerous on the part of the ld. AO to specifically mention the offen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequentially eligible for exemption u/s 11 of the Act had claimed disallowance of depreciation on certain fixed assets as an application of income, ignoring the amendment brought u/s 11(6) of the Act w.e.f. 01.04.2015. This disallowance of deprecation was accepted by the assessee in the quantum proceedings. The ld. AO initiated penalty proceedings u/s 270A of the Act on 01.11.2019 wherein in the said notice issued u/s 274 r.w.s. 270A of the Act, the ld. AO had not struck off the irrelevant portion i.e. whether the assessee has underreported its income or misreported its income. Since, no specific offence committed by the assessee was mentioned by the ld. AO in the show cause notice, the assessee vide ground no. 2 before us had submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lip N. Shroff Case (supra) disapproves of the routine, ritualistic practice of issuing omnibus show-cause notices. That practice certainly betrays non- application 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 al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome and for underreporting as well as misreporting of income. Hence, it is even more onerous on the part of the ld. AO to specifically mention the offence committed by the assessee whether it had underreported the income or misreported the income or committed both the offence so as to apply the respective penalty amounts as stipulated u/s 270A of the Act. This onerous task being not fulfilled by the ld. AO would result in entire penalty proceedings getting vitiated. In view of the specific provisions of the Act and in view of the decision of Hon ble Bombay High Court referred (supra), we direct the AO to delete the penalty levied u/s 270A of the Act in the facts and circumstances of the instant case. Accordingly, the ground no. 2 raised b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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