AI Drafter 
TaxTMI 
TaxTMI 
2025 (6) TMI 652
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....levied u/s. 271AAB for AY 2020-21]. 2. At the outset, the Ld.AR of the assessee assailed the action of the Ld.CIT(A), by raising, inter-alia, legal issues, for appeals pertaining to AY 2018-19 & 2019-20, confirming the action of the AO levying penalty u/s. 270A of the Act for underreporting of its income by levying 50% of the total tax by contending that no specific fault/charge has been framed against the assessee in the show cause notice (SCN) dated 29.09.2021 for AY 2018-19 [Educational Trust] and by notices dated 28.09.2021 for AY 2018-19 & AY 2019-20 in the case of 'Institute of S & T Trust' and therefore, the impugned notices were bad in law and therefore, invalid and consequent penalty needs to be cancelled, by relying on several case laws to support the ibid legal issue raised before us. Likewise, the Ld.AR has also raised legal issue against levy of penalty u/s. 271AA(1A) of the Act for AY 2020-21 in both the Trust cases on similar grounds by pointing out that the SCN issued u/s. 271AAB of the Act dated 29.09.2021 in the case of 'Educational Trust' and SCN dated 28.09.2021 in the case of 'Institute of S & T Trust' are bad in law and therefore, invalid and consequent pen....
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....,79,31,260/-, wherein the assessment order, the AO endorsed his satisfaction to initiate separately penalty u/s. 270A of the Act. 6. The AO thereafter is noted to have issued Show Cause Notice (SCN) dated 29.09.2021 u/s. 274 r.w.s. 270 of the Act calling upon the assessee-Education-Trust 'as to why' penalty for underreporting/misreporting of income should not be imposed u/s. 270A of the Act and the assessee objected to levy of penalty by pointing out, inter alia, that since the AO has accepted the returned income filed by the assessee pursuant to the notice u/s. 153A of the Act and didn't make any addition to the income returned, the proposed penalty should be dropped. But the AO is noted to have rejected the plea and proceeded to consider the entire voluntary contribution admitted by the assessee to the tune of Rs. 5,88,60,300/- as underreported income for the purpose of penalty u/s. 270A of the Act. 7. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) who was pleased to confirm the same. 8. Assailing the action of the Ld.CIT(A), the Ld.AR contended that a finding in the assessment proceedings that a particular receipt is income can't automatically be adopt....
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.... have put the assessee on notice for either 'underreporting of income' or for 'underreporting as a consequence of misreporting of income'. Instead, according to the Ld.AR, in the present case, the AO had issued notice for AY 2018-19 in the 'Educational Trust' case on 29.09.2021 for both the faults i.e. 'underreporting of income'/'misreporting of income', which is bad in law for non-application of mind and not specifying the charge, which makes the notice vague qua the assessee. Moreover, drawing our attention to the assessment order for AY 2018-19 in the case of 'Educational Trust', he pointed out that the AO has merely made endorsement that "penalty proceedings u/s. 270A of the Act is initiated separately" without recording his satisfaction during the course of the assessment as to whether he is intending to proceed against the assessee for levy of penalty for 'underreporting of income' or 'misreporting of income' u/s. 270A of the Act. Therefore, according to the Ld.AR, the SCN issued by the AO dated 29.09.2021 for AY 2018-19 in the case of 'Educational Trust' is bad in law. 9. Likewise, he drew our attention to the case of 'Institute of S & T Trust' for AY 2018-19 wherein pena....
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....of the limb renders the notice invalid. 2. Issue for Consideration Whether the penalty notice under Section 270A is invalid due to the AO's failure to explicitly specify (by scoring out or mentioning) whether the penalty is for "under-reporting" or "misreporting", despite levying a 50% penalty. 3. Submission It is respectfully submitted that the penalty notice is valid and the assessee's challenge lacks merit for the following reasons: a. Penalty Rate of 50% Reflects Under-Reporting * Section 270A(7) prescribes a penalty of 50% of the tax payable on income under-reported under Section 270A(2), while Section 270A(8) imposes a 200% penalty for misreporting under Section 270A(3). * The AD levied a 50% penalty, which unequivocally signal with underreporting. Had the AO intended to penalize for misreporting (e.g., suppression of facts or falsification), the penalty would have been 200%. The quantum of penalty itself clarifies the limb under which it was imposed. * The omission to score out "misreporting" is a procedural irregularity, not a substantive defect, and does not invalidate the notice. b. N....
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.... to account for them, evading tax for A.Y. 2018-19. The 50% penalty is justified, and the challenge to the notice is a technical ploy to avoid liability. * Invalidating the notice would undermine the deterrent purpose of Section 270A. h. Judicial Precedents Supporting Revenue * In Mak Data P. Ltd. v. CIT [2013] 358 ITR 593 (SC), the Supreme Court upheld penalties despite procedural lapses, as the assessee was aware of the allegations and participated in proceedings. Burden on Assessee to Prove Misreporting The assessee must show that the AO intended to penalize for misreporting (200%) but failed to establish it. Absent evidence of falsification or misrepresentation under Section 270A(3), the 50% penalty must be presumed to correctly apply to under-reporting. 4. Conclusion The Revenue submits that the penalty notice under Section 270A is valid. The 50% penalty aligns with under-reporting under Section 270A(7), and the failure to score out "misreporting" is a procedural lapse cured by Section 2928, The assessee suffered no prejudice, and the notice's intent is evident from the penalty rate and search findings on 07.11....
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....s the penalty proceedings: * Hon'ble Madras High Court in the case of BabujiJacob v. ITO [2021] 430 ITR 259 (Mad) * Hon'ble Karnataka High Court in the case ofCIT v. Manjunatha Cotton & Ginning Factory [2013] 359 ITR 565 (Kar); and CIT v. SSA's Emerald Meadows [2016] 73 taxmann.com 241 (Kar). * Hon'ble Delhi High Court (Del) in the case of Prem Brothers Infrastructure LLP v. NFAC [2022] 142 taxmann.com 38 * Hon'ble ITAT - Chennai - ShriMelekandyPuthalathFarookVs ACIT - ITA No. 1890/CHNY/2024 dated 05-11-2024 * Hon'ble ITAT - Chennai - Enrica Enterprises P. Ltd. Vs. DCIT [2024] 163 taxmann.com 105 * Hon'ble ITAT- Delhi - Jaina Marketing & Associates Vs DCIT [2024] 162 taxmann.com 439 (Delhi - Trib.) Following the Hon'ble SC decision in the case of CIT Vs SSA Emerald Meadows [2016] 73 taxmann.com 241 (SC) Hence, it is settled issue, upheld in several judicial decisions, that the AO is required to indicate the limb of the charge, while initiating the penalty proceedings and failure to do so vitiate the penalty proceedings and renders the penalty order invalid. b) Nature of Default Supports Und....
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....that prejudice has been caused to the assessee, as the assessee was given opportunity of being heard. Our Submission When the impugned penalty notice is invalid, the entire proceedings gets vitiated and the question of giving opportunity of being heard or whether prejudice is caused or not are of no significance. Further, such invalid notice would cause prejudice to the assessee. For this proposition, we place our reliance on the Full Bench Decision of the Hon'ble Bombay High Court decision in the case of Mohd. Farhan A. ShaikhVs DCIT [2021]434 ITR 1 (Bom) (FB), which held as under- "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 ambiguity. Therefore, Dilip N. Shroff Case (supra) disapproves of the routine, ritualistic practice of issuing omnibus show-cause notices. That practice certainly betrays non- application of min....
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....lved from penalty, if he has voluntarily disclosed his income. It is not a case, where the penalty notice issued by the Ld.AO is valid or not. Hence, the reliance of the abovementioned SC decision by the Ld.DR is totally misplaced, as it is distinguishable both on facts and law. i) Burden on Assessee to Prove Misreporting The Ld. DR submitted that the burden is on the appellant to prove that the Ld.AO intended to levy penalty for misreporting @ 200% but the appellant failed to establish it. Hence the Ld.AO is justified in levying penalty @ 50% Our Submission The question of burden of proof would arise, only if the proceedings are validly initiated and the Ld.AO has assumed proper jurisdiction and issued a proper show-cause notice. In the absent of any valid proceedings, the question of discharging the burden of proof by the appellant does not arise. In view of the above decisions, we humbly submit before Your Honours that the impugned penalty order is liable to be quashed. 13. We have heard both the parties on the legal issue and perused the records. The assessee has assailed the levy of penalty u/s. 270A of the Act for AY 20....
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....een called upon to defend the proposed penalty viz., 'underreporting of income'/'misreporting of income'] it is bad in law. According to us, an omnibus SCN, betrays application of mind and vitiates the issuance of such penalty notices, because, its purpose of putting the assessee on proper notice is lost. An omnibus SCN obviously confuses the assessee and he will not be able to defend the fault/charge which would be ultimately imposed upon him. Therefore, the Hon'ble Courts have held that if the notices are found to be vague, it has to be held as bad in law. Now let us examine the impugned notice, the AO had issued proposing penalty u/s. 270A of the Act which we note to be either for 'underreporting of income' or for 'misreporting of income'. In other words, it doesn't specify which fault the AO is proposing the assessee to defend against levy of penalty. A perusal of the impugned notice (infra) doesn't reveal whether the AO has initiated penalty for under-reporting of income as per sub-section (1) to (7) of section 270A of the Act or misreporting of income as per section (8) to (9) of section 270A of the Act. It is noted that these are distinct faults with different consequences. ....
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....ault is a must, to facilitate the assessee to meet the charge alleged against him. Failing which, the assessee would not be able to properly defend an ambiguous charge, which would vitiate assessee's right to a fair hearing guaranteed by the Constitution of India. 15. Further to our discussion (supra) section 270A of the Act specifies two charges/faults i.e. (i) is 'underreporting of income' & (ii) is 'underreporting as a consequence of misreporting of income'. Subsections 1-7 of section 270A deals with 'underreporting of income' whereas sub-sections 8-10 deals with 'underreporting as a consequence of misreporting of income'. For underreporting of income, penalty levied u/s. 270A of the Act is sum equal to 50% of the amount of tax payable on the 'underreported income' whereas for 'misreporting of income', it shall be equal to 200% of the amount taxable on the 'underreported income'. Therefore, we find that as per the scheme of sec.270A of the Act itself it shows that there are two distinct faults/lapses for which different consequences/penalty is levied. Therefore, the AO was duty bound to put the assessee on notice as to which charge/lapse/fault which is alleged against him, so....
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....n disposed off till date, which is pending for rectification before the AO. 18. And the AO meanwhile initiated the penalty proceedings by issuing notice u/s. 271AAB(1) dated 28.09.2021 for AY 2020-21 which was objected to by the assessee on many issues. But the AO is noted to have proceeded to consider the gross amount of Rs. 1,02,75,000/- [Rs.24 lakhs plus Rs. 78,75,000/-] as undisclosed income for the purpose of penalty levied u/s. 271AAB of the Act and levied penalty of Rs. 76,05,000/- being 60% taxes payable on the undisclosed income u/s. 271AAB of the Act by order dated 30.03.2022 which has been confirmed by the Ld.CIT(A). Aggrieved by the action of the Ld.CIT(A), the assessee is before us. 19. The Ld.AR assailed the impugned action of the Ld.CIT(A), inter-alia, confirming the action of the AO which according to the Ld.AR is erroneous and pointed out that the penalty levied is bad in law on many grounds (infra), and especially on the ground that the SCN issued by the AO u/s. 274 r.w.s.271AAB of the Act dated 28.09.2021 is bad in law and filed the written submissions which is reproduced as under: Ground of Appeal 2 - PENALTY ORDER IS LIABLE TO BE QUASHED AS THE U....
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.... penalty under Chapter XXI, which reads as under: "Procedure. 274. (1) No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard. B. No specific mention of grounds on which penalty is initiated: At this juncture, we humbly submit that the penalty order is liable to be quashed as it is completely infructuous for the following reasons: 2.4. As specified in the provisions of Section 271AAB(1) of the Act, the penalty section has three limbs each having a different ground of levy of penalty and a different rate of penalty respectively. In the notice initiating penalty dated 29- 09-2021, the Ld. AO, without categorically recording the satisfaction as to, for what limb of levy of penalty u/s 271AAB(1) [whether (a)/(b)/(c)] the subject penalty proceedings has been initiated, has contravened the provisions of Section 271AAB r.w.s. 274 of the Act. Such distinction is very crucial to be mentioned in the notice since each ground carries different penalty rates. Hence, the assessee ought to have been informed about the probable result/ consequenc....
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....ore the specified date (A) pays the tax, together with interest, if any, in respect of the undisclosed income; and (B) furnishes the return of income for the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of sixty per cent of the undisclosed income of the specified previous year, if it is not covered under the provisions of clause (a). 2.6 In the penalty order dated 30.03.2022, the Ld. AO has levied penalty of INR 76,05,000/- being 60% of the undisclosed income in lines with the provisions of Section 271AAB(1A). But no notice has been issued for levy of penalty under Section 271AAB(1A). Hence the penalty order is prima facie invalid as no proper notice was served in that regard and is liable to be quashed. In this regard we rely on the following judgments which was rendered in the context of Section 270A of the Act but can very well be applied in the case of 271AAB of the Act: i) Hon'ble Delhi ITAT in the case of Jaina Marketing & Associates vs. DCIT, Delhi In fact, two notices were issued by the Assessing Officer and in both the notices, the Assessing Officer had o....
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....s of the case. 2) Hon'ble Andhra Pradesh High Court PCIT, Visakhapatnam Vs. M/S Sri Radha Krishna Vihar, Kakinada From the plain reading of the Section 158 BFA(2), it does not appear that in all the cases where the undisclosed income is determined by the AO under Clause(c) of Section 158BC, the imposition of penalty as specified u/s. 158BFA shall follow as a natural consequence thereof. In our considered opinion, in terms of Section 158BFA, a discretion is vested with the Assessing Officer to levy the penalty in respect of the undisclosed income but it cannot be inferred from the said provision that the liability for penalty is automatic. Of course, the proviso to Section 158BFA(2) enumerates the circumstances wherein no penalty is leviable but from that also it cannot be inferred that the absence of the circumstances enumerated will attract the provision of penalty automatically. Ground of appeal #5 & #6: NO UNDISCLOSED INCOME IN THE CASE OF THE APPELLANT 1. The Ld. AO erred in levying penalty u/s 271AAB of the Act where there is no undisclosed income in the case of the appellant. 2. The Ld. AO erred in concluding that the appellant....
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.... In this regard, we would like to draw attention to the judgment in the case of DCIT, Kolkata Vs. Manish Agarwala -Hon'ble ITAT Kolkata We note that since the income under question (Rs. 3 cr.) was in fact entered in the "other documents" maintained in the normal course relating to the AY 2013-14, which document was retrieved during search, hence, the amount of Rs. 3 cr. offered by the assessee does not fall in the ken of "undisclosed income" defined in Sec. 271AAB of the Act. Further, it should be noted that the amount of Rs. 24,00,000/- had been disclosed as voluntary contributions and Rs. 78,75,000/- had been disclosed as anonymous donations in the return filed dated 15.01.2021 which at the time is a duly filed return of income as the time limit for filing the return of income for the relevant AY 20-21 had not expired. Hence, there is no undisclosed income for the relevant AY 2020-21. Ground of appeal #7, #8 & #9: ERRONEOUS COMPUTATION OF UNDISCLOSED INCOME 1. Without prejudice to the above grounds of appeal, the Ld. AO erred in computing undisclosed income as INR 1,26,75,000/- blindly relying on the assessment order dated 29-....
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....the rate of thirty per cent of the undisclosed income of the specified previous year, if the assessee (i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived; (ii) substantiates the manner in which the undisclosed income was derived; and (iii) on or before the specified date- (A) pays the tax, together with interest, if any, in respect of the undisclosed income; and (B) furnishes the return of income for the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of sixty per cent of the undisclosed income of the specified previous year, if it is not covered under the provisions of clause (a). 2.12 In this regard and without prejudice to the other arguments placed above, it is noted that the Learned AO has erroneously levied a penalty at the rate of 60% instead of 30% on the income added as undisclosed income. The said amount has been duly disclosed in the return of income dated 15.01.2021. Proper substantiation for the same has also been appropriately given....
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....the Ld.DR's written submissions Written Submission on the Validity of Penalty Notice under Section 271AAB 1. Brief Facts * A search under Section 132 of the Income Tax Act, 1961, was conducted on the assessee Trust on 07.11.2017. * During the search, it was discovered that the assessee had collected unaccounted capitation fees in cash, which were not recorded in its books of accounts. * For A.Y. 2020-21, the AO assessed this undisclosed income and initiated penalty proceedings under Section 271AAB. * The penalty notice cited "Section 271AAB(1)" instead of "Section 271AAB(1A)", but the AO imposed a penalty of 60% on the undisclosed income, consistent with Section 271AAB(1A)(b). * The assessee has challenged the validity of the penalty notice before the Hon'ble ITAT, arguing that the incorrect reference to the section renders it invalid. 2. Issue for Consideration Whether the penalty notice under Section 271AAB is invalid due to the AO's reference to "Section 271AAB(1)" instead of "Section 271AAB(1A)", despite the levy of a 60% penalty. 3. Submission It is respectfully submitted....
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....tic Interpretation of the Notice * The notice should be interpreted alongside the assessment order, penalty order, and search proceedings. The reference to "271AAB(1)" is an inadvertent error, but the 60% penalty rate and factual context confirm the applicability of Section 271AAB(1A). f. Assessee's Conduct Warrants Penalty * The assessee collected unaccounted cash, and evaded tax. The search provided clear evidence of undisclosed income for A.Y. 2020-21. * The 60% penalty is justified, and the assessee's challenge appears to be an attempt to avoid liability despite evident tax evasion. g. Judicial Precedents Upholding Revenue's Position * In Mak Data P. Ltd. v. CIT [2013] 358 ITR 593 (SC), the Supreme Court upheld penalties despite procedural irregularities, as the assessee was aware of the charges. h. Burden on Assessee to Prove Invalidity * The assessee must prove that the incorrect reference caused genuine confusion or prejudice. Given the 60% penalty rate and search context, no such misunderstanding could reasonably have arisen. 4. Conclusion It is humbly submitted that the pe....
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....out mentioning the specific limb is valid or not. In fact, the submission of the Ld. DR supports the appellant's contention that the impugned penalty notice was vague and it was only from the penalty order the Ld.AO has informed the appellant the limb under which the penalty has been imposed. The appellant has submitted various case laws, wherein it has held that if penalty notice is vague, it vitiates the penalty proceedings: * Hon'ble Jurisdictional High Court (Chennai) in the case of PCIT v. R. Elangovan - TCA Nos 770 & 771 of 2018 dated 30-03-2021. * Hon'ble ITAT - Chennai - DCIT Vs R Elangovan - ITA No. 1199/CHNY/2017 dated 05-04-2018 * Hon'ble ITAT - Chandigarh - Happy Steel Pvt Ltd Vs DCIT - ITA No.398/CHD/2023 dated 05-06-2024 * Hon'ble ITAT- Delhi - Jaina Marketing & Associates Vs DCIT [2024] 162 taxmann.com 439 (Delhi - Trib.) * Hon'ble ITAT- Pune - Kishore DigambarPatilVs ITO [2023] 149 taxmann.com 502 (Pune - Trib.) * Hon'ble ITAT- Jaipur: R. P Wood Products Private Limited Vs. DCIT, ITA 302/JP/2023 dated 11-07-2023: * Hon'ble ITAT- Nagpur - Chandra Suresh Kothari Vs DCIT [2022] 135 taxmann....
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....thy Kumaresan Vs ITO in ITA No.2452/Chny/2024 dated 17 12-2024 Although those decisions were rendered in the context of section 271(1)(c) of the Act, the same principle would equally apply to Section 271AAB of the Act Further, the Ld.DR reliance on the decision of the Hon'ble Bombay High Court in the case of CIT Vs Kaushalya (1995) 216 ITR 660 (Bom) do not death with the section 292B of the Act at all. Further, this decision only supports contention of the appellant, wherein it has held the order of the Tribunal for quashing the penalty notice as it was vague for AY 1967-68 at para 10 of the judgment. c) No prejudice Caused to the assessee The Ld.DR submitted that prejudice has been caused to the assessee, as the assessee was given opportunity of being heard. Our Submission When the impugned penalty notice is invalid, the entire proceedings gets vitiated and the question of giving opportunity of being heard or whether prejudice is caused or not are of no significance. Further, such invalid notice would cause prejudice to the assessee. For this proposition, we place our reliance on the Full Bench Decision of the Hon'ble ....
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....lty proceedings, in the light of the various judicial precedents cited by the appellant that if the penalty notice is vague, then penalty proceedings gets vitiated. h) Judicial Precedence- SC decision in the case of Mak Data P. Ltd Vs (2013) 358 ITR 593 (SC) The Ld. DR has relied on the Hon'ble SC decision in the case of Mak Data P. Ltd Vs (2013) 358 ITR 593 (SC) for the proposition the penalty could be levied despite procedural lapses, as the assessee has participated in the proceedings and was aware of the allegations. Our Submission The Hon'ble SC decision relied by the Ld.DR is wholly distinguishable on facts and law. In that case, the question was whether the assessee would be absolved from penalty, if he has voluntarily disclosed his income. It is not a case, where the penalty notice issued by the Ld.AO is valid or not. Hence, the reliance of the abovementioned SC decision by the Ld.DR is totally misplaced, as it is distinguishable both on facts and law. i) Burden on Assessee to Prove Invalidity The Ld. DR submitted that the burden is on the appellant to prove that the incorrect section reference made by the Ld.AO....
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....ion 271AAB(1) of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorized representative, you may show cause in writing on or before the said date which will be considered before any such order is made under section 271AAB(1) of the Income Tax Act, 1961. Sd/- (J. SARAVANAN) Assistant Commissioner of Income Tax Central Circle-1(3), Chennai 23. Since the AO has given show cause notice (SCN) to the assessee for levying penalty u/s. 271AAB(1) of the Act, it would be gainful to refer to section 271AAB(1) of the Act, which reads as under: Penalty where search has been initiated. 271AAB. (1) The Assessing Officer or Commissioner (Appeals) may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section-132 on or after the 1st day of July, 2012 but before the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,- (a) a sum computed at the rate of ten per cent....
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.... if he satisfies the conditions given in sub-clause (a) of sub-section (1) of section 271AAB of the Act. Likewise, the assessee shall be liable to pay by way of penalty in addition to tax, if any, payable by him, a sum computed @20%, if such assessee satisfies the condition given under sub-clause (b) of sub-section (1) of section 271AAB of the Act. Likewise, the assessee shall be liable to pay by way of penalty in addition to tax, if any, payable by him, a sum computed @60% of the undisclosed income of the specified previous year, if his case is not covered by sub-clause (a) & (b) of sub-section (1) of section 271AAB of the Act. The jurisdictional fact for exercising power under sub-section (1) of sec.271AAB of the Act, where search has been initiated u/s. 132 of the Act on or after 1st July, 2012 but before 15.12.2016. In other words, penalty u/s. 271AAB(1) of the Act can be levied only in a case where assessee has been searched between 01.07.2012 & 15.12.2016; and if the search had taken place before 01.07.2012 or after 15.12.2016, then the AO is not empowered by law to levy penalty u/s. 271AAB(1) of the Act. Coming to the present case, it is undisputed that search was initiated ....
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....against for levy of penalty. Different consequences are envisaged if charged under clause (a) or clause (b) of sub-section (1A) of section 271AAB of the Act. The AO therefore should have issued proper notice to the assessee. Omnibus notice (SCN) betrays application of mind by the AO and issuance of such kind of notices has been deprecated by the Hon'ble High Courts in several cases including the jurisdictional Madras High in the case of Shri R. Elangoan v. PCIT in TCA No.770 & 771/2018 dated 30.03.2021, wherein the Hon'ble Madras High Court upheld the action of this Tribunal, quashing the penalty proceedings finding similar notice to be bad in law being vague and ambiguous. And in this case, their Lordships also referred to the decision of the full Bench of the Hon'ble Bombay High Court in the case of Mohd. Farhan A. ShaikhVs DCIT [2021] 434 ITR 1 (Bom) (FB), wherein the Hon'ble Bombay High Court observed as under: "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....
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.... case, the AO was required to give proper notice to the assessee. In this case, the AO ought to have been given notice under sub-section 1A of section 271AAB of the Act and also as to whether assessee case falls under sub-clause (a) or (b), so that the assessee is able to defend its case properly. Having failed to issue the jurisdictional notice u/s. 271AAB(1A) either under sub-clause (a) or subclause (b) and instead issued notice u/s. 271AAB(1) which didn't empower the AO to levy penalty in this case, we are of the view that the entire penalty proceedings right from issue of notice to imposition of penalty shows total non-application of mind, which exposes the arbitrary action of the AO, and thus, vitiated the impugned action for these reasons as well; and hence, we hold the AO's action to be ab initio void. 27. Even though, the Ld.DR submitted that no prejudice has been caused to the assessee by issuing notice, we are of the view that principle of audi alteram partem lies at the very heart of procedural fairness. No one can be condemned without being given an opportunity to present ones case. Question about prejudice caused due to non-observance of principles of natural justic....