2023 (7) TMI 985

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....t order / additions are also invalid. The reasons the assessment order is invalid due to the facts. i) Reasons were recorded without application of mind and with the facts in non-existence. ii) The approval given to the reasons recorded by the Hon'ble Pr CIT is without application of mind and in a mechanical manner. iii) Four consequent events has occurred in one day in such a speedy manner, which can't be due to human probabilities, Receipt of information. Recording of reasons on the basis thereof, getting approval from the Pr CIT, and issuance of notice. iv) The objections filed to the reasons recorded were never quashed before framing the assessment order. v) Provisions of Sec 148 are not applicable in case of action taken under Sec 132 as specifically excluded by Sec 153A. 3) That on the facts and in the circumstances of the case and in law, Ld CIT-A grossly erred in without appreciating that the Ld Assessing Officer is erred in law and on facts of the case of levying penalty as whole of the additions are made u/s 68 on the basis of bank statement, which can never be made as the assessee is not maintaining any bank a....

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....earing before the Hon'ble CIT(A)." 2. The brief facts of the case are that the assessment order came to be passed against the assessee u/s 147 r.w.s. 143(3) of the Act by determining the income of the assessee at Rs. 12,86,550/- as against the return income of Rs. 4,94,550/-. In continuation with the assessment order, the penalty proceedings have been initiated against the assessee and an order u/s 271(1)(c) of the Act r.w.s. 274 of the Act came to be issued on 28/03/2019 by imposing penalty at 100% of Rs. 4,36,27,144/-. Aggrieved by the order of the penalty, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal filed by the assessee vide order dated 05/01/2020 which is the order impugned before us. 3. On the ground mentioned above. The learned counsel for the assessee submitted that the penalty proceedings initiated on the basis of defective notice issued u/s 274 r.w. Section 271 (1) (c) of the Act wherein no specific limb has been mentioned, apart from the same, the learned Counsel submitted that, in the assessment order, the AO mentioned that 'a separate penalty proceedings u/s 271(1)(c) of the Act for concealment of income' but th....

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.... l: If the assessment order clearly records satisfaction for imposing penalty on one or the other, or both grounds mentioned in Section 271(1)(c), does a mere defect in the notice--not striking off the irrelevant matter--vitiate the penalty proceedings? 181. It does. The primary burden ties on the Revenue. In the assessment proceedings, it forms an opinion, prima facie or otherwise, to launch penalty proceedings against the assessee. But that translates into action only through the statutory notice under section 271(1)(c), read with section 274 of IT Act. True, the assessment proceedings form the basis for the penalty proceedings, but 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 civ....

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.... of non-application of mind when the irrelevant portions of the printed notices are not struck off ? 187. In Dilip N. Shroff, for the Supreme Court, it is of "some significance that in the standard Pro-forma used by the assessing officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done". Then, Dilip N. Shroff, on facts, has felt that the assessing officer himself was not sure whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inaccurate particulars. 188. We may, in this context, respectfully observe that a contravention of a mandatory condition or requirement for a communication to be valid communication is fatal, with no further proof. That said, even if the notice 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 I.T.A.No.1409/Del/2016 ambiguity. Therefore, Dilip N. Shroff disapproves of the routine, ritualistic practice of issuing omnibus show-cause notices. That practice certainly betrays non a....