TaxTMI 
TaxTMI 
2024 (10) TMI 524
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....f appeal:- "1. That even after filing reasons for delay in filing appeal (Form 35 filed on 16/03/2020) and requesting for condonation, the Ld. CIT(A) has denied to acknowledge the same. Thus, natural justice denied. 2. That confirming the penalty u/s 271(1)(c) of Rs. 3,61,467/- is bad in law. 3. Any other matter with prior permission of the chair." 3. The brief facts of the case are that the assessee filed return of income declaring a total income of Rs. 2,53,000/-. The assessment was framed u/s 143(3) of the Income Tax Act 1961('Act' for short) on 07/12/2017 at a total income of Rs. 27,03,131/- by making addition of Rs. 15,00,131/- and Rs. 9,50,000/- on account of difference between sale consideration & stamp ....
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.... also submitted that order of the lower authorities deserves to be set aside by deleting the penalty. 6. Per contra, the Ld. DR relying on the orders of the lower authorities, sought for dismissal of the appeal filed by the assessee. 7. We have heard the parties and perused the materials available on record. The AO while framing the assessment u/s 143(3) of the Act, in the Assessment Order, recorded the satisfaction for initiating the penalty u/s 271(1)(c) of the act as under:- "Since the assessee concealed income by furnishing inaccurate particulars of income, penalty proceedings u/s 271(1)(c) of the Act, 1961 initiated separately." It can be seen from the satisfaction recorded by the AO in the Assessment Order, wherein b....
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.... 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 groun....
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....sion 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 the penalty proceedings on the grounds of non-application of mind and prejudice. 186. That said, regarding the other assessment year, it reasons that the assessment order, containing the reasons or justification, avoids preju....
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....ractice 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 comme....