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TMI Blog2022 (3) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... or had not specified the specific offence committed by the assessee as to whether the assessee had concealed the particulars of income or furnished inaccurate particulars of income or whether the assessee had committed both the offences. Hence, the penalty notice issued by the ld. AO becomes a defective notice. We find that the Full Bench of the Hon'ble Jurisdictional High Court in the case of Mohd. Farhan A. Shaikh vs. DCIT [ 2021 (3) TMI 608 - BOMBAY HIGH COURT ] had categorically held that not striking off irrelevant portion in the penalty notice would vitiate the penalty proceedings. Accordingly, the Hon'ble Jurisdictional High Court had cancelled the penalty We hereby direct the ld. AO to cancel the penalty levied in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstead of ₹ 35,90,873/-. Accordingly, in the assessment order, the ld. AO restricted the short term capital loss to ₹ 35,90,873/-. Later penalty proceedings u/s. 271(1)(c) of the Act were initiated by the ld. AO. Penalty notice u/s. 274 r.w.s. 271(1)(c) of the Act dated 23/12/2016 is placed on record wherein we find that the ld. AO had not struck off the specific limb or had not specified the specific offence committed by the assessee as to whether the assessee had concealed the particulars of income or furnished inaccurate particulars of income or whether the assessee had committed both the offences. Hence, the penalty notice issued by the ld. AO becomes a defective notice. We find that the Full Bench of the Hon'ble Jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss 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 Smt. Kaushalya case (supra).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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 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 ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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