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TMI Blog2023 (8) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly the penalty order passed u/s. 271(1)(c) of the Act for Assessment Year 2008-09 is quashed. - Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri C.S. Aggarwal, Sr. Advocate; Shri R. P. Mall, Adv.; For the Department : Shri Om Parkash, Sr. D. R.; ORDER PER C. N. PRASAD, J. M. : 1. This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-24 [hereinafter referred to CIT (Appeals)] New Delhi, dated 12.05.2023 for assessment year 2008-09. 2. The assessee has raised the following grounds of appeal:- 1. That the learned CIT(A) has erred both on facts and in law in sustaining the order of learned DCIT, Central Circle-8, New Delhi, imposing a penalty u/s 271(1)(c) of the Income Tax Act of Rs. 15,31,470/-. 2. That the learned CIT(A) has failed to appreciate that the proceeding u/s 271(1)(c) of the Act had been initiated on the ground, that the assessee had concealed the particulars of its income or had furnished inaccurate particulars of its income, as such since, as the notice issued was vague and mechanical, no penalty could have been levied on the basis of such a vague not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. On the other hand, the Ld. DR referring to the assessment order submits that the penalty was levied for furnishing incorrect particulars of income. 5. Heard rival submissions perused the orders of the authorities below and the decisions relied on. On perusal of the notices issued u/s 274 read with section 271(1)(c) of the Act I observe that the notice was issued stereotyped and the Assessing officer has not specified any limb or charge for which the notice was issued i.e., either for concealment of particulars of income or furnishing of inaccurate particulars of such income. It can be seen from the notice issued u/s 274 read with section 271(1)(c) of the Act, Assessing Officer did not strike off irrelevant limb in the notice specifying the charge for which notice was issued. 6. I observe that an identical issue came up before the Hon ble Bombay High Court (full bench at Goa) in the case of Mr. Mohd. Farhan A. Shaikh vs. ACIT [434 ITR (1)] and the Hon ble High Court held as under: Question No.l: If the assessment order clearly records satisfact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a doses the discussion 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stice, it may also be held ultra vires Article 14 of the Constitution. 191. As a result, we hold that Dilip N. Shroff treats omnibus show cause notices as betraying non-application of mind and disapproves of the practice, to be particular, of issuing notices in printed form without deleting or striking off the inapplicable parts of that generic notice. Conclusion: We have, thus, answered the reference as required by us; so we direct the Registry to place these two Tax Appeals before the Division Bench concerned for further adjudication. 7. As could be seen from the above the Hon'ble Bombay High Court (Full Bench at Goa) in the case of Mr. Mohd. Farhan A. Shaikh v. ACIT [(2021) 434 ITR 1 (Bom)] while dealing with the issue of non-strike off of the irrelevant part in the notice issued u/s.271(1)(c) of the Act, held that assessee must be informed of the grounds of the penalty proceedings only through statutory notice and an omnibus notice suffers from the vice of vagueness. 8. In the case of PCIT Vs. Sahara India Life Insurance Co. Ltd. (supra) the Hon ble jurisdictional High Court held as under:- The respondent had challenged the upholding of the penalty i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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