TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 499
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....ar for which penalized instead of adjudicating the same on merits ? B. Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was correct in holding that limb/exact charge was not clear for which penalized without appreciating the fact that the assessee had never raised this issue before the Assessing Officer ? C. Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was correct in deleting the penalty without appreciating the fact that the assessee has made false claim which was withdrawn only after objection raised by the Assessing Officer ? D. Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is correct in deleting penalty holdi....
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....read with Section 271(1)(c) of the Act, the charges were ".....have concealed the particulars of your income or furnished inaccurate particulars of such income." Finally, the penalty was imposed by AO by stating ".....in view of the above facts, I am satisfied that the assessee has filed inaccurate particulars of income and hence, concealed the income." Admittedly in this case, AO had not deleted the relevant portion. 4. The ITAT concluded that the same reflects non-application of mind on the part of AO because AO himself was not sure about the limb/exact charge for which assessee was being penalized. The ITAT relied on the judgment of Apex Court in the case of Dilip N. Shroff v. JCIT 291 ITR 519. The ITAT also relied on various judgments.....
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....;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. 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. 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 th....
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....it set aside the penalty proceedings on the grounds of non-application of mind and prejudice. 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 Case (supra) on the issue of non-application of mind when the irrelevant portions of the printed notices are not struck off ? Ans.: In Dilip N. Shroff Case (supra), for the Supreme Court, it is ....
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....itigant, "except in the case of a mandatory provision of law which is conceived not only in individual interest but also in the public interest". 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 to Rajesh Kumar v. CIT [2007] 27 SCC 181, in which the Apex Court has quoted with approval its earlier judgment in State of Orissa v. Dr. Binapani Dei AIR 1967 SC 1269. 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 dow....