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TMI Blog2024 (6) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the assessment proceedings form the basis for the penalty proceedings, but they are 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. The notice u/s 274/271(1)(c) of the Act is not carrying the specific limb. Therefore, this is a case where both the parts of the offences i.e., concealment of income as well as furnishing of inaccur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove notice itself is invalid and bad in law further in assessment order also the initiation has been made for both the limbs. Ground -3. On the facts and circumstances of the case, the Id. CIT(A) NFAC erred in confirming the penalty order passed by Id assessing officer without appreciating that the Id. Assessing officer vide order giving effect to the IT AT order allowed the disallowances and deleted the additions. Ground -4. On the facts and circumstances of the case, the Id. CIT(A) NFAC erred in imposing penalty without appreciating that the addition has been made on assumption basis which itself will not attract penalty u/s. 271(l)(c). Ground -5. The appellant craves leaves to add, to delete, or amend any of the above grounds of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under section 271(1)(c) read with section 274. Again, whether this prima facie opinion is sufficient to inform the assessee about the precise charge for the penalty is a matter of inference and, thus, a matter of litigation and adjudication. The solution, again, is a tick mark; it avoids litigation arising out of uncertainty. 180. One course of action before us is curing a defect in the notice by referring to the assessment order, which may or may not contain reasons for the penalty proceedings. The other course of action is the prevention of defect in the notice and that prevention takes just a tick mark. Prudence demands prevention is better than cure. Answers: Question No. 1: If the assessment order clearly records satisfaction for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be invalid. As held in various judicial pronouncements including the decision of Hon ble Karnataka High Court in CIT V/s SAS s Emerald Meadows (73 Taxmann.com 241) against which Special Leave Petition (SLP) filed by the department stood dismissed by Hon ble Supreme Court which is reported as 73 Taxmann.com 248. The notice u/s 274/271(1)(c) of the Act is not carrying the specific limb. Therefore, this is a case where both the parts of the offences i.e., concealment of income as well as furnishing of inaccurate particulars of income were involved. Finally, respectfully following the binding judicial precedents as cited aforesaid, we are of the considered opinion that the impugned penalty is not sustainable on legal grounds. The ld. DR i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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