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TMI Blog2022 (11) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act are illegal, bad in law and without jurisdiction. 2. That the penalty order passed U/s. 271 (l)(c ) is illegal, bad in law and without jurisdiction as same has been imposed by the assessing officer other than who has initiated penalty. That under the facts and circumstances, no penalty U/s. 271 (l)(c ) for Rs. ll,90,808/-should have been levied." 3. The brief facts of the case are that, the assessment order came to be passed on 01/02/2014 u/s 143(3) of the Act by disallowing Rs. 3,10,800/- being claimed as compensation paid to the labour on account of Mishap at site and further disallowed Rs. 33,67,081/- being payment to NCC at 5% on the amount of the VAT of Rs. 6,73,41,625/- charged from client (DMRC) which was required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the quantum appeal filed by the assessee has been dismissed by this Tribunal. The assessee has participated in the penalty proceedings and further submitted that mere non mentioning of specific charge in the notice issued u/s 274 of the Act will not vitiate the entire penalty proceedings. Therefore, submitted that, the appeal of the assessee deserves to be dismissed. 10. We have heard the parties, perused the material on record and gave our thoughtful consideration. The notice issued 274 read with Section 271 of the Income Tax Act has been produced along with the assessee's paper book, which is reproduced as under:- 11. On perusal of the notice issued u/s 274 read with Section 271 of the Act, it is found that the said noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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'sfavour. 183. Therefore, we answer the first question to the effect that Goa Dourado Promotions and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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(l)(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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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