2024 (2) TMI 270

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...., whereby the Ld. CIT(A) had dismissed the appeal of the Assessee against the Penalty Order, dated 14/01/2022, passed under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). 2. The Appellant has raised following grounds of appeal: "1) The NATIONAL FACELESS APPEAL CENTRE (NFAC) has erred by upholding the order passed by learned assessing officer and dismissing the appeal filed by your appellant thereby upholding the levy of penalty of Rs. 4,54,486/- u/s 271(1)(c) on the Appellant. 2) The NFAC failed to appreciate that the Appellant had submitted all details and documentary evidence in respect of the additions and the addition was sustained purely on an adhoc estimate basis. Hence, no p....

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....l filed by the Appellant, the CIT(A), vide order dated 13/08/2018, restricted the addition to 3% of alleged bogus purchases. 5. Since the Assessing Officer had also initiated penalty proceedings under Section 271(1)(c) of the Act, the Assessing Officer passed penalty order on 14/01/2022 levying penalty of INR 4,54,486/-. Being aggrieved, the Appellant preferred appeal before CIT(A) which was dismissed. Now the Appellant is in appeal before us. 6. When the appeal was taken up for hearing, the Ld. Authorized Representative of the Appellant submitted the issue raised in the present appeal is covered in favour of the Appellant by the judgment of the Full Bench of the Hon'ble Bombay High Court in the case of Mohd. Farhan A Shaikh Vs. DCIT,....

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....e 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." (Emphasis supplied) 8. A perusal of the penalty notice, dated 09/12/2016 and 16/09/2021 issued under Section 274 read with 271 of the Act would show that the notices are in the nature of an omnibus show cause notice issued without deleting or st....