2021 (5) TMI 588

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....ed `the Act'). 2. It is seen that the assessment order for the A.Y. 2009-10 was passed u/s.144 of the Act making an addition of Rs. 2,73,170/- towards loss on sale of car which was claimed by the assessee by debiting his Profit and loss account, but not allowed by the Assessing Officer (AO) for the reason of no separate allowability of such loss after the advent of the scheme of block of assets. Thereafter, penalty was imposed u/s.271(1)(c) with reference to this addition, which came to be affirmed in the first appeal. 3. For the A.Y. 2011-12, the assessee claimed exempt agricultural income of Rs. 1,01,62,920/-. In making the assessment u/s.144, the AO made addition for such a sum. Thereafter, penalty was imposed by the AO u/s.271(....

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.... should be prevented from raising that question before the tribunal for the first time, so long as the relevant facts are on record in respect of that item". Answering the question posed before it in affirmative, their Lordships held that on the facts found by the authorities below, if a question of law arises (though not raised before the authorities) which has bearing on the tax liability of the assessee, the Tribunal has jurisdiction to examine the same. Having gone through the subject matter of the additional grounds taken by the assessee, it is discernible that they raise a pure question of law. We, therefore, admit the same. 6. The case of the assessee is that the AO did not strike off the irrelevant limb in the notice issued u/s.2....

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....21) 125 taxmann.com 253 (Bom) has considered this very issue. Answering the question in affirmative, the Full Bench held that a defect in notice of not striking the relevant words vitiates the penalty even though the AO had properly recorded the satisfaction for imposition of penalty in the order u/s 143(3) of the Act. In another judgment, the Hon'ble Bombay High Court in Pr.CIT Vs. Golden Peace Hotels and Resorts (P.) Ltd. (2021) 124 taxmann.com 248 (Bom) also took similar view that where inapplicable portions were not struck off in the penalty notice, the penalty was vitiated. The SLP of the Department against this judgment has recently been dismissed by the Hon'ble Supreme Court in Pr.CIT Vs. Golden Peace Hotels and Resorts (P.) Ltd.....