TaxTMI 
TaxTMI 
2022 (12) TMI 1157
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....nd closed the business. While confirming the penalty levied u/s 271(1)(c) of the Act, learned Commissioner of Income Tax (Appeals) has erred in failing to appreciate that: (i) The learned Assessing Officer was not satisfied whether Assessee has concealed or filed inaccurate particulars of income on the additions sustained by the CIT (A), which is mandatory for initiating or imposing penalty. (ii) She totally ignored the directions of the Hon'ble Supreme Court and jurisdictional High Court that satisfaction of the Assessing Officer is mandatory while Assessing Officer was confused by stating concealed in the Assessment order and subsequently during issuing notice and even in the order levying penalty whether Assessee has concealed or filed inaccurate particulars. (iii) She ignored that the Assessing Officer himself partially accepted loans received from parties whose addition has been sustained by the CIT(A) by not appealing against the deletion in quantum appeal by the ITAT. (iv) She also ignored the vital evidence filed before her which evidences were also placed during penalty proceedings before the Assessing Officer which clearly , establi....
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.... liability and closed the business. 8. The Ld. Counsel for the assessee further submitted that the Assessing Officer has not recorded proper satisfaction. The Assessing Officer was himself was not sure as to whether the assessee has concealed the income or filed inaccurate particulars of income on the additions sustained by the CIT(A). the penalty proceedings has been initiated with a defective notice without specifying any limb or charge for which the notice were issued. Therefore, submitted that, penalty imposed on the assessee require to be quashed. 9. Per contra, the Ld. AR has relied on the orders of the Lower Authorities. 10. We have heard the parties, perused the material on record and gave our thoughtful consideration 11. We have perused notice issued u/s 274 read with Section 271 of the Act, it is found that the Ld. A.O. has not specified any limb or charge for which the notice was issued i.e. either for concealment of particulars of income or furnishing of inaccurate particulars of such income. It can be seen from the notice issued u/s 274 read with Section 271(1)(c) of the Act, Assessing Officer did not strike off irrelevant limb in the notice specifying the ....
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.... orders already contained the reasons why penalty should be initiated. So, the assessee, stresses Kaushaiya, "fully knew in detail the exact charge of the Revenue against him". For Kaushaiya, the statutory notice suffered from neither nonapplication of mind nor any prejudice. According to it, "the so-called ambiguous wording in the notice [has not] impaired or prejudiced the right of the assessee to a reasonable opportunity of being heard". It went onto observe that for sustaining the piea of natural justice on the ground of absence of opportunity, "it has to be established that prejudice is caused to the 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 ....
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.... 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 be followed. In such an event, although no express provision is laid down on this behalf, compliance with principles of natural justice would be implicit. If a statue contravenes the principles of natural justice, it may also be held ultra vires Article 14 of the Constitution. 191. As a result, we hold that Dilip N. Shroff treats omnibus show cause notices as betraying non-application of mind and disapproves of the practice, to be particular, of issuing notices in printed form without deleting or striking off the inapplicable parts of that generic notice. Conclusion: We have, thus, answered the reference as required by us; so we direct the Registry to place these two Tax Ap....