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TMI Blog2024 (2) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... as issued i.e. either for concealment of income or for furnishing inaccurate particulars of income. The notice was issued mechanically stating that the assessee had concealed particulars of income or furnished inaccurate particulars of income. As could be seen from the above in the case of Mr. Mohd. Farhan A. Shaikh . [ 2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] 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. Thus notice issued by the Assessing Officer was bad in law if it did not specify under which li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the penalty notice is bad in law and consequently, the penalty order is bad in law. Reliance was also placed on the decision of Madras High Court in the case of CIT vs. Manjunatha Cotton and Ginning Factory [359 ITR 565] (Karnataka). 4. Ld. DR strongly supported the orders of the authorities below. 5. Heard rival submissions, perused the orders of the authorities below and the decisions relied on. On perusal of the notice issued u/s 274 read with section 271(1)(c) of the Act it is noticed that the AO did not strike off the irrelevant limb in the notice. In other words, the AO did not specify the limb for which the notice u/s 271(1)(c) was issued i.e. either for concealment of income or for furnishing inaccurate particulars of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 consonance with the statutory scheme. That means we must hold that Kaushaiya does not lay down the correct proposition of law. Question No.2: Has Kaushaiya failed to discuss the aspect of prejudice? 184. Indeed, Kaushaiya did discuss the aspect of prejudice. As we have already noted, Kaushaiya noted that the assessment orders already contained the reasons why penalty should be initiated. So, the assessee, stresse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 nonapplication 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 significance that in the standard Pro-forma used by the assessing officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done . Then, Dilip N. Shroff, on facts, has felt that the assessing officer himself was not sure whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 principles of natural justice would be implicit. If a statue contravenes the principles of natural justice, it may also be held ultra virus Article 14 of the Constitution. 191. As a result, we hold that Dilip N. Shroff treats omnibus show cause notices as betraying nonapplication of mind and disapproves of the practice, to be particular, of issuing notices in printed form without deleting or striking off the inapplicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s Emerald Meadows (2016) 73 taxmann.com 241 (Karn.), the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of 2016 by an order dated August 5, 2016 [CIT Vs. SSA s Emerald Meadows (2016) 386 ITR (St.) 13 (SC)]. 9. As could be seen from the above the Hon'ble jurisdictional High Court upheld the order of the Tribunal in holding that the notice issued by the Assessing Officer was bad in law if it did not specify under which limb of section 271(1)(c) of the Act the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. 10. Ratio of the full bench decision of the Hon'ble Bombay High Court (Goa) squarely ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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