TaxTMI 
TaxTMI 
2022 (7) TMI 851
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....following grounds of appeal:- "1. That the Hon'ble CIT(A) has erred in law and on facts in not disposing off the additional ground of appeal raised by the Appellant challenging the validity and legality of the notice dated 9.12.2011 issued u/s 274 r.w.s. 271(1 )(c) of the Act, inter alia because: 1.1 The notice initiating the penalty proceedings did not mention the specific charge against the Appellant as to whether the Ld. AO considered it a case of concealment of income or furnishing inaccurate particulars of income. 1.2 The Hon'ble CIT(A) ought to have quashed the notice dated 09.12.2011 at the very threshold by following the judgment of the Hon'ble Jurisdictional Delhi High Court in the case of Sahara India Li....
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....ined. Reliance was placed on the following decisions:- i) PCIT Vs. Sahara India Life Insurance Co. Ltd. 432 ITR 84 (Del.); ii) CIT Vs. SSA's Emerald Meadows (2016) 73 taxmann.com 241 (Kar.); & iii) CIT Vs. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar.) 4. Referring to the above judgments, Ld. Counsel for the assessee submitted 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 submi....
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....ut 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's favour. 183. Therefore, we answer the first question to the effect that Go....
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....y 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 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 mind when the irrelevant portions of the printed....
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....t 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(l)(c) is one such provision. With calamitous, albeit commercial, consequences, the provision is mandatory and brooks no trifling with or dilution. For a further precedential prop, we may refer to Rajesh Kumar v. CIT[74], in which the Apex Court has quoted with approval its earlier judgment in State of Orissa v. Dr. Binapani Dei[ 75]. According to it, when by reason of action on the part of a statutory authority, civil or evil consequences ensue, principles of natural justice must....
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....ppellate 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 been initiated under, i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgement in the subsequent order in CIT Vs. SSA's Emerald Meadows (2016) 73 taxmann.com 241 (Karn.), the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of 2016 by an order dated August 5, 2016 [CIT Vs. SSA's Emerald Meado....