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TMI Blog2021 (12) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings only through statutory notice and an omnibus notice suffers from the vice of vagueness. Ratio of this full bench decision of the Hon'ble Bombay High Court (Goa) squarely applies to the facts of the assessee s case as the notices u/s. 274 r.w.s. 271(1)(c) of the Act were issued without striking off the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notices were issued On a perusal of the notices issued u/s. 274 r.w.s. 271(1)(c) of the Act, we observe that the Assessing Officer has not specified any limb for which the notices were issued i.e., either for concealment of particulars of income or for furnishing inaccurate particulars of such income. Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice was issued for both the limbs without striking off the irreverent limb and specifying the charge for which the notice was issued. Reliance was placed on the decision of the Hon'ble Bombay High Court in the case of Ventura Textiles Limited v. CIT in I.T. Appeal No. 958 of 2017 dated 12.06.2020. Therefore, it is submitted that since the notice issued u/s.274 r.w.s. 271(1)(c) of the Act did not specify the limb for which or the charge for which it was issued the penalty order passed pursuant to such notice is bad in law. 4. Ld. DR vehemently supported the orders of the authorities below. 5. Heard rival submissions, perused the orders of the authorities below and the decision of the Hon'ble Jurisdictional High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 civil consequences, must be construed strictly. And ambiguity, if any, must be resolved in the affected assessee s favour. 183. Therefore, we answer the first question to the effect that Goa Dourado Promotions and other cases have adopted an approach more in cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne 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 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 on the issue 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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[74], in which the Apex Court has quoted with approval its earlier judgment in State of Orissa v. Dr. Binapani Dei[ 75]. 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 down on this behalf, compliance with princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old that the penalty order passed u/s. 271(1)(c) of the Act by the Assessing Officer is bad in law and accordingly the penalty orders passed u/s. 271(1)(c) of the Act for Assessment Years 2007-08 to 2011-12 are quashed. As we have decided the preliminary ground in favour of the assessee and quashed the penalty orders the other grounds raised by the assessee on merits are not gone into as they become only academic at this stage. 8. As we have quashed the penalty order for the A.Y. 2008-09 in assessee s appeal, the appeal filed by the revenue in ITA.No.6216/Mum/2018 for A.Y. 2008-09 challenging the order of the Ld.CIT(A) in reducing the penalty become infructuous, accordingly the same is dismissed. 9. In the result, appeals of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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