2022 (8) TMI 1176

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....n the instant case ignoring the provisions of section 271(1)(c) of the Act?" 3. The appellant prays that the order of the Ld.CIT(A) on the above ground be set aside and that of the AO be restored. 4. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary." 2. The brief fact is that the assessment u/s 143(3) of the Act was completed on 29.03.2015 determining total loss at Rs.29,50,39,290/-. The A.O has made disallowance of Rs.9,67,00,000/- as provision for diminution in value of investment Rs.16,00,000/- debited as prior period expenditure, Rs.5,89,12,582/- disallowed u/s 40(a)(ia) of the Act. During the course of penalty proceedings the A.O stated that assessee had debited Rs. 9,67,00,000/- as provision for diminution in value of investment. However, the same was not added in the computation of total income. The A.O has further stated that assessee had debited Rs.16,00,000/- on account of electricity expenses pertaining to prior period. These expenses were disallowed stating that same were not related to the year under consideration. In response to the notice issued the assessee explained that it had adequately discl....

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....b of Section 271(1)(c) in the above referred notice issued u/s 274 of the Act. The assessee has placed copy of the notice issue u/s 274 r.w.s 271(1)(c) of the Act dated 29.03.2015 as annexure in the paper book submitted on 06.04.2022. We have perused the copy of notice placed in the paper book the relevant part of the same reproduced as under: On perusal of the aforesaid notice it is clear that A.O has not specified whether the penalty is levied on account of concealment of particular of income or furnishing of inaccurate particulars of income. In this regard we have gone through the case of jurisdictional High Court referred by ld. Counsel in the case of Mohd. Farhan A. Shaikh Vs. DCIT (2021) 434 ITR 1 (Bom), wherein the relevant part of head note is reproduced as under: "Section 271(1)(c), read with section 274 of the Income-tax Act, 1961 Penalty For concealment of income (Recording of satisfaction) Whether where assessment order clearly records satisfaction for imposing penalty on one or other, or both grounds mentioned in section 271(1)(c), a mere defect in notice-not striking off irrelevant matter would vitiate penalty proceedings-Held, yes- Whether since penalty p....

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....ry 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 Goa Dourado Promotions and other cases have adopted an approach more in consonance with the statutory scheme. That means we must hold that Kaushalya does not lay down the correct proposition of law. Question No. 2: Has Kaushalya failed to discuss the aspect of 'prejudice'? 184. Indeed, Smt. Kaushalya case (supra) did discuss the aspect of prejudice. As we have already noted, Kaushalya noted that the assessment orders already contained the reasons why penalty should be initiated. So, the assessee, stresses Kaushalya, "fully knew in detail the exact charge of the Revenue against him". For Kaushalya, the statutory notice suffered from neither non-application of mind nor any prejudic....

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....e contains no caveat that the inapplicable portion be deleted, it is in the interest of fairness and justice that the notice must be precise. It should give no room for ambiguity. Therefore, Dilip 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 also in the public interest". 190. Here, section 271(1)(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 ....

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....961 AABCF1008K. M/s FUTURE E-COMMERCE INFRASTRUCTURE LTD. KNOWLEDGE HOUSE, SHYAM NAGAR, OFF JOGESHWARI VIKHROLI LINK RD, JOGESHWARI, EAST, MUMBAI - 400060. कि आपने :- that your- चूंकि कर निर्धारण वर्ष आयकर कार्यालय / Office of the Dy, Commi of I-Tax, Circle-9(3)(2), Room No. -418, 4th floor, Aayakar Bhavan, M.K.Road, Mumbai 400020 Ph: 22039131 ext: 2418 तारीख / Dated 29/03/2015 PENALTY U/S 271(1)(e) penss | p9145 1475 के संबंध में मेरे यहां होने वाली कार्रवाई के दौरान मुझे प्रतीत होता है Whereas in the course of proceedings before me for the Assessment Year 2012-13 it appears to me *बिन....

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....म, 1922 की धारा 22(4)/23 (2) या अधिनियम, 1961 की धारा 142 (1) / 143 (2) के अधीन दी गई सूचना सं... ता. .... का अनुपालन नहीं किया है। आयकर Have without reasonable cause failed to comply with a notice under Section 22(4)/23(2) of the Indian Income-tax Act, 1922 or under Section 142(1) 143(2) of the Income-Tax Act, 1961, No. अपनी आय के प्यारे दिए लिए है या इस प्रकार की आय के ब्यौरे गलत दिए है। dated have Concealed the particulars of your income or Fumished inaccurate particulars of such income. आपको à¤....