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TMI Blog2024 (4) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... lty order passed u/s. 271(1)(c) of the Act by the AO is bad in law and accordingly the penalty order passed u/s. 271(1)(c) is quashed. Decided in favour of assessee. - Shri Challa Nagendra Prasad, Judicial Member And Shri M Balaganesh, Accountant Member For the Assessee : Shri Vineet Garg, Adv. For the Revenue : Shri Kanv Bali, Sr. DR ORDER PER C.N. PRASAD, J.M. This appeal is filed by the assessee against the order of the Ld.CIT(Appeals)-10, New Delhi dated 29.06.2018 for the AY 2014-15 in sustaining the penalty of Rs. 83,677/- levied u/s 271(1)(c) of the Act. 2. Ld. Counsel for the assessee, at the outset, submits that penalty order is invalid and bad in law for the reason that the penalty proceedings were initiated and penalty was levied without assigning specific charge, the exact limb of section 271(1)(c) of the Act. In other words, it is submitted that the Ld. Counsel submits that the AO did not specify under which limb of section 271(1)(c) penalty proceedings had been initiated i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. Therefore, it is submitted that in the absence of specific charge in the notice issued u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, stresses Kaushaiya, fully knew in detail the exact charge of the Revenue against him . For Kaushaiya, the statutory notice suffered from neither non-application of mind nor any prejudice. According to it, the so called ambiguous wording in the notice [has not] impaired or prejudiced the right of the assessee to a reasonable opportunity of being heard . It went onto observe that for sustaining the plea of natural justice on the ground of absence of opportunity, it has to be established that prejudice is caused to the concerned person by the procedure foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singh, the Supreme Court has encapsulated 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[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 principles of natural justice would be implicit. If a statue contravenes the principles of natural justice, it may also be he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 274 read with section 271(1 )(c) of the Act reveals that Assessing Officer has not recorded any clear cut satisfaction as to whether the penalty under section 271(1)(c) of the Act has been levied for concealment of income or for furnishing of inaccurate particulars of income. 12. As is evident upon a perusal of the impugned order, the Tribunal, in concluding that there was a requirement in law for the AO to clearly indicate his satisfaction, as to which limb of section 271(1)(c) of the Act was triggered qua the respondent/assessee, placed reliance on the following judgments: Pr. CIT v. Sahara India Life Insurance Co. Ltd. [20191 108 taxmann.com 597/[2021] 432 ITR 84 (Delhi) and Mohd. Farhan A Sheikh v. Dy. CIT [20211 125 taxmann.com 253/280 Taxman 334/434 ITR 1 (Bom.) (FB). 13. Thus, having regard to the aforesaid, the Tribunal concluded, that the penalty order could not be sustained, and consequently allowed the appeal of the respondent/assessee. 14. Mr Kumar, in support of his appeal, has vehemently argued that the impugned order is erroneous. In support of his submission, Mr Kumar has relied upon the judgment of another coordinate bench of this Court in CIT v. ECS Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he infraction(s) committed by the respondent/assessee. In a given case, where concealment has taken place, a heavier burden may be imposed, than in a situation where an assessee is involved in furnishing inaccurate particulars. 23. Therefore, it is necessary for the AO to indicate, broadly, as to the provision/limb under which penalty proceedings are triggered against the assessee. 24. Clearly, this has not happened in the instant case. 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 applies to the facts of the assessee's case as the notice u/s. 274 r.w.s. 271(1)(c) of the Act was 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 issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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