DCIT CIR 3, THANE V. THE THANE DISTRICT CENTRAL CO. OP. BANK LTD, THANE

ITA 2138/MUM/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2508 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 06-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS PADMAJA SIRIPURAPA
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Question of law; Condonation of delay; Set aside
• Section: 271(1)(c); 143(3); 274; 13; 27

Judgement Text

1 ITA 2138/MUM/2018 CO 215/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI S. RIFAUR RAHMAN (ACCOUNTANT MEMBER) I.T.A. NO.2138/MUM/2018 (ASSESSMENT YEAR 2010-11) DY.COMMISSIONER OF INCOME - TAX, CIRCLE-3, THANE VS THE THANE DISTRICT CENTRAL CO - OPERATIVE BANK LIMITED, 1, CHHATRAPTI SHIVAJI PATH, POST BOX NO.11, THANE (W)-400 601 PAN : AAAAT0739N APPELLANT RESPONDENT C.O. 215/MUM/2019 (ARISING OUT OF I.T.A. NO.2138/MUM/2018) (ASSESSMENT YEAR 2010-11) THE THANE DISTRICT CENTRAL CO - OPERATIVE BANK LIMITED, 1, CHHATRAPTI SHIVAJI PATH, POST BOX NO.11, THANE (W)-400 601 PAN : AAAAT0739N VS DY.COMMISSIONER OF INCOME - TAX, CIRCLE-3, THANE CROSS OBJECTOR RESPONDENT REVENUE BY MRS. PADMAJA SIRIPURAPA, CIT ( DR ) ASSESSEE BY SHRI ASHOK PATIL , AR DATE OF HEARING 03 - 0 6 - 2021 DATE OF PRONOUNCEMENT 2 8 - 0 6 - 2021 2 ITA 2138/MUM/2018 CO 215/MUM/2019 O R D E R PER : SAKTIJIT DEY (JM): CAPTIONED APPEAL AND CROSS OBJECTION ARISE OUT OF AN ORDER DATED 30-01- 2018 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-2, THANE, DELETING PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT, 1961 FOR THE ASSESSMENT YEAR 2010-11. 2. PERTINENTLY, THOUGH, LEARNED COMMISSIONER (APPEA LS) HAS DELETED THE DECIDED ISSUE IN FAVOUR OF THE ASSESSEE ON MERITS, HOWEVER, THE ASSESSEE HAS FILED THE CROSS OBJECTION CHALLENGING THE DECISION OF LEA RNED COMMISSIONER (APPEALS) UPHOLDING THE VALIDITY OF THE PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF DEFECT IN THE SHOW CAUSER NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT. 3. SINCE, THE AFORESAID ISSUED RAISED IN THE CROSS OBJECTION IS A PURELY LEGAL AND JURISDICTIONAL ISSUE GOING TO THE ROOT OF THE MATTE R, IN OUR CONSIDERED OPINION, SUCH ISSUE HAS TO BE DECIDED AT THE VERY OUTSET. HO WEVER, BEFORE WE PROCEED TO DECIDE THE AFORESAID ISSUE, IT MUST BE OBSERVED, RE GISTRY HAS POINTED OUT A DELAY OF 59 DAYS IN FILING THE CROSS OBJECTION. 4. THE ASSESSEE HAS FILED AN APPLICATION SEEKING CO NDONATION OF DELAY ACCOMPANIED BY AN AFFIDAVIT. IT IS THE SUBMISSION O F THE ASSESSEE THAT THE MEMORANDUM OF APPEAL FILED BY THE DEPARTMENT AS REC EIVED BY THE ASSESSEE WAS HANDED OVER TO THE COUNSEL, WHO GENERALLY APPEARS F OR THE ASSESSEE IN TAX LITIGATIONS. IT IS SUBMITTED, THOUGH, THE COUNSEL F OR THE ASSESSEE HAD ADVISED FOR FILING OF THE CROSS OBJECTION, IN SPITE OF THE APPE AL HAVING BEEN DECIDED IN FAVOUR OF THE ASSESSEE ON MERITS; HOWEVER, THE CROSS OBJEC TION COULD NOT BE FILED IN TIME AS THE OFFICIALS OF THE ASSESSEE WERE TIED UP WITH THE STATUTORY AND OTHER AUDIT 3 ITA 2138/MUM/2018 CO 215/MUM/2019 GOING ON AT THE BANK BETWEEN FEBRUARY, 2019 TO AUGU ST, 2019. THUS, DUE TO INADVERTENCE, THE CROSS OBJECTION COULD NOT BE FILE D IN TIME. THE LEARNED DEPARTMENTAL REPRESENTATIVE OPPOSED CONDONATION OF DELAY. 5. HAVING CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE AVERMENTS MADE IN THE APPLICATION SEEKING CONDONATION OF DELAY AS WEL L AS THE AFFIDAVIT, WE ARE SATISFIED THAT THE DELAY IN FILING THE CROSS OBJECT ION WAS DUE TO BONAFIDE REASONS AND NOT DELIBERATE. ACCORDINGLY, CONDONING THE DELA Y, WE ADMIT THE CROSS OBJECTION FOR ADJUDICATION ON MERIT. 6. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A CO-OPER ATIVE BANK REGISTERED WITH THE GOVERNMENT OF MAHARASHTRA. AS STATED BY THE ASSESS ING OFFICER, THE ASSESSEE IS ENGAGED IN BANKING OPERATION AS PER FRAMEWORK OF BA NKING REGULATION ACT, 1949 AND GUIDELINES ISSUED BY RESERVE BANK OF INDIA (RBI ), FROM TIME TO TIME. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE HAD FILED I TS RETURN OF INCOME ON 14-10- 2010 DECLARING TOTAL INCOME OF RS.13,18,31,547/-. I N COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.36,74,91,638/- UNDER SECTION 36(1)( VIIA) IN RESPECT OF PROVISION FOR BAD AND DOUBTFUL DEBT RELATING TO RURAL BRANCHES. A FTER CALLING FOR NECESSARY DETAILS RELATING TO THE CLAIM OF DEDUCTION AND EXAM INING THEM, THE ASSESSING OFFICER OBSERVED THAT CERTAIN BRANCHES IN RESPECT O F WHICH THE ASSESSEE HAD CLAIMED THE DEDUCTION, DO NOT QUALIFY AS RURAL BRAN CHES, AS, THE POPULATION IN THOSE AREAS ARE NOT BELOW 10,000 AS PER THE 2001 CE NSUS. FURTHER, HE OBSERVED, THE ASSESSEE HAS CREATED A PROVISION OF RS.350 LAKH S IN ITS ACCOUNTS, WHEREAS, IT HAS CLAIMED DEDUCTION OF RS.36,74,91,638/-. THUS, R ELYING UPON CERTAIN JUDICIAL PRECEDENTS, THE ASSESSING OFFICER HELD THAT THE ASS ESSEE HAS CLAIMED EXCESS DEDUCTION TO THE EXTENT OF RA.33,24,91,638/-. ACCOR DINGLY, AFTER DISALLOWING THE 4 ITA 2138/MUM/2018 CO 215/MUM/2019 SAID AMOUNT, THE ASSESSING OFFICER ADDED BACK THE S AME TO THE INCOME OF THE ASSESSEE. BASED ON SUCH ADDITION, THE ASSESSING OFF ICER INITIATED PROCEEDINGS FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF TH E ACT AND ULTIMATELY PASSED AN ORDER ON 30-06-3027 IMPOSING PENALTY EQUIVALENT TO 100% TAX ON THE INCOME IN RESPECT OF WHICH, THE ASSESSEE ALLEGEDLY FURNISHED INACCURATE PARTICULARS OF INCOME. AGAINST THE PENALTY ORDER SO PASSED, ASSESS EE PREFERRED APPEAL BEFORE LEARNED COMMISSIONER (APPEALS). AFTER CONSIDERING T HE SUBMISSIONS OF THE ASSESSEE AND TAKING NOTE OF THE FACT THAT UNDER SIM ILAR FACTS AND CIRCUMSTANCES, PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT IN ASSESSMENT YEARS 2008-09 AND 2009-10 WERE DELETED BY THE TRIBUNAL, LEARNED C OMMISSIONER (APPEALS) DELETED THE PENALTY IMPOSED. 7. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED, IN T HE SHOW CAUSE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C) OF THE AC T, THE ASSESSING OFFICER HAS NOT SPECIFICALLY INDICATED WHICH LIMB OF SECTION 271(1) (C) OF THE ACT WOULD BE APPLICABLE. IN THIS CONTEXT, HE DREW OUR ATTENTION TO A COPY OF THE SHOW CAUSE NOTICE PLACED AT PAGE 46 OF THE PAPER BOOK. THUS, H E SUBMITTED, BY NOT MENTIONING THE SPECIFIC LIMB OF SECTION 271(1)(C) O F THE ACT UNDER WHICH THE ASSESSING OFFICER INTENDED TO IMPOSE PENALTY, THE P ENALTY ORDER PASSED IS VITIATED. IN SUPPORT OF SUCH CONTENTION, HE RELIED UPON THE F ULL BENCH DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN CASE OF MOHAMM ED FARHAN A SHAIKH VS DCIT (2021) 200 DTR (BOM)(FB) 65. HE ALSO RELIED UPON A DECISION OF THE DIVISION BENCH OF THE HONBLE JURISDICTIONAL HIGH COURT IN CASE OF VENTURA TEXTILES LTD VS CIT (2020) 426 ITR 478 (BOM). FURTHER, HE SUBMITTED, UN DER IDENTICAL FACTS AND CIRCUMSTANCES, DUE TO DEFECT IN THE SHOW CAUSE NOTI CE ISSUED UNDER SECTION 274 OF THE ACT, THE TRIBUNAL IN ASSESSEES OWN CASE FOR AS SESSMENT YEARS 2008-09 AND 5 ITA 2138/MUM/2018 CO 215/MUM/2019 2009-10 HAS DELETED PENALTY IMPOSED UNDER SECTION 2 71(1)(C) OF THE ACT. FURTHER, HE SUBMITTED, IN ASSESSMENT YEAR 2009-10, THE TRIBU NAL HAS ALSO DEALT WITH THE MERITS OF THE ISSUE AND DELETED THE PENALTY HOLDING THAT DISALLOWANCE OF A DEDUCTION CLAIMED BY THE ASSESSEE CANNOT LEAD TO IM POSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. IN THIS CONTEXT, HE D REW OUR ATTENTION TO THE ORDERS PASSED BY THE TRIBUNAL IN ASSESSMENT YEAR 2008-09 A ND 2009-10 PLACED IN THE PAPERBOOK. THUS, HE SUBMITTED, THE PENALTY IMPOSED WAS RIGHTLY DELETED BY LEARNED COMMISSIONER (APPEALS). 8. PER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE, APART FROM MAKING SUBMISSIONS AT THE TIME OF HEARING HAS ALSO FILED T HE FOLLOWING WRITTEN SUBMISSIONS:- WRITTEN SUBMISSION IN ITA 2138M18 AND CO 215M19 THE THANE DISTRICT CENTRAL COOPRATIVE BANK LTD AY 2010-11 HEARD BY HON'BLE E BENCH . ITAT MUMBAI ON 3.06.2021 1.THE CAPTIONED APPEAL IS BY REVENUE AND THE CO IS BY ASSESSEE. THE APPEAL IS AGAINST THE ORDER OF THE LD CIT A DELETIN G THE PENALTY LEVIED U/S 271 [1] (C). REVISED GROUNDS OF APPEAL WERE FIL ED ON 21.08.2019 BY THE DCIT CIRCLE 3, THANE. THE CO IS AGAINST THE ADDITIONAL LEGAL GROUND THAT WAS RAISED BEFORE THE CIT A AND DISMISSED ALTHOUGH THE MATTER WAS DEC IDED IN FAVOUR OF THE ASSESSEE BANK ON MERITS. THE CO WAS FILED ON 5. 09.2019, PER THE ASSESSEE AND THERE IS A DELAY OF 143 DAYS IN FILING THE CO. 2. ASST U/S 143(3) : THE LD AO IN THE ASSESSMENT ORDER U/S 143(3) DT. 14.03.2013 MADE AN ADDITION OF RS 36,74,91,368/- ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 36 (L)(YIIA) AND REST RICTED THE DEDUCTION TO RS 3,50,00,000/- TO THE EXTENT OF PROVISION MADE FOR EXPENDITURE DEBITED TO P AND L ACCOUNT. ( PLEASE SEE PARA 1 , P P 1 OF THE PENALTY ORDER U/S 271 (1) ( C) DT 30.06.2017 FOR AY 10-11.) 3. ORDER OF THE HON'BLE ITAT ON QUANTUM ADDITION :PLEASE SEE THE ORDER OF THE HON'BLE ITAT , E BENCH IN ITA 7295/M/2 014 IN ASSESSEE'S OWN CASE FOR AY 10-11. THE HON'BLE ITAT HAS UPHELD THE 6 ITA 2138/MUM/2018 CO 215/MUM/2019 ADDITION IN THE ASSESSMENT ON ACCOUNT OF DISALLOWAN CE OF DEDUCTION U/S 36(L)(VIIA) . 4. PENALTY ORDER U/S 271(L)(C) :PLEASE SEE THE PENALTY ORDER U/S 271(1)( C) DT 30.06.2017 FOR AY 10-11. THE FACTS OF THE ASSESSMENT ARE AT PARA 1, PP 1. AT PARA 2, PP 1 , THE DETAILS OF THE DISALLOWANCE A RE REFERRED TO. THREE BRANCHES OF THE ASSESSEE BANK WERE CLAIMED TO BE RURAL BRANCHES. ON SCRUTINY OF POPULATION CERTIFICATES AN D ON ADMISSION BY THE ASSESSEE BANK, THREE BRANCHES WERE ESTABLISH ED TO BE NOT RURAL BRANCHES. THE AGGREGATE ADVANCES MADE BY THE ELIGIBLE RURAL BRANCHES WAS RS 29,04,18,518 AGAINST THE CLAIM OF R S 33,00,42,399 BY THE ASSESSEE. AT PARA 2.2, PP 2, THE AO HAS DETAILED THE EXCESS C LAIM OF DEDUCTION OF RS 33,24,91,638 AND THE RESTRICTION OF THE CLAIM U/S 36(L)(VIIA) TO THE EXTENT OF PROVISION MADE FOR EXPENDITURE DEBITE D TO P AND L ACCOUNT. FROM THE DISCUSSION AT PARA 4, PP 3, IT IS CLEAR TH AT THE ASSESSEE WAS AWARE THAT THE PREVALENT LAW WAS AGAINST IT THE REPLY OF THE ASSESSEE BANK TO THE NOTICE U/S 27 1(1) (C ) IS REPRODUCED AT PARA 5. THIS REPLY DT 27.6.2017 CLEAR LY SHOWS THAT THE ASSESSEE HAS MET BOTH THE LIMBS OF CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS. PLEASE SEE PARA 6 OF THE PENALTY ORDER WHEREIN THE LD AO HAS GIVEN HIS DETAILED REASONING FOR LEVY OF PENALTY U/S 271( L)(C) ON ACCOUNT OF BOTH CONCEALMENT AND FURNISHING OF INACCURATE PARTI CULARS OF INCOME . THE LD AO STATES, ' HOWEVER THE FACT REMAINS THAT THE ASSESSEE CONSCIOUSLY AND DELIBERATELY MADE THE FOLL OWING CLAIMS WITH A VIEW TO CONCEAL THE TRUE PARTICULARS OF INCO ME ... ' THE LD AO HAS HIGHLIGHTED THE CLAIM OF DEDUCTION UNDER SEC OND LIMB OF SEC 36(L)(VIIA) EVEN THOUGH THE BRANCHES DID NOT QU ALIFY AS RURAL BRANCH AND CLAIM OF DEDUCTION OF RS 36.75 CR U/S SE C 36(L)(VIIA) EVEN THOUGH ONLY RS 3.5 CR WAS PROVIDED AND DEBITED IN THE P AND L ACCOUNT. THUS, THE PENALTY ORDER DEMONSTRATES THAT THE PENALTY U/S 271(1)(C) WAS LEVIED ON ACCOUNT OF BOTH CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. S.PENALTY NOTICE U/S 271(L)(C) DT 14.03.2013: A COPY OF THIS NOTICE HAS BEEN FURNISHED BY THE ASSESSEE IN ITS PAPER BOOK AT PP 46. IN THIS NOTICE, BOTH THE LIMBS OF CONCEALING THE PARTICULARS AND FU RNISHING INACCURATE PARTICULARS OF INCOME REMAIN WITHOUT STRIKING OFF. 7 ITA 2138/MUM/2018 CO 215/MUM/2019 6.IMPUGNED ORDER OF THE LD CIT A DT 30.01.2018: THE DECISION OF THE LD CIT A IS AT PARA 6, PP 9. THE LD CIT A HAS DISMI SSED THE ADDITIONAL GROUND RAISED BY THE ASSESSEE WITH RESPECT TO THE A PPEAL OF THE ASSESSEE THAT THE PENALTY NOTICE WAS BAD IN LAW DUE TO THE L IMBS OF CONCEALMENT / FURNISHING OF INACCURATE PARTICULARS NOT BEING STRU CK OF. CURIOUSLY, THE CIT A AT PARA 6.1, PP 10 HAS RELIED ON THE ORDERS OF THE HON'BLE ITAT, D BENCH IN ITS OWN CASE FOR AY 08-09 AND 09-10. THIS ORDER OF THE ITAT WHICH IS RELIED ON IS BASED ON TH E RATIO OF NON- STRIKING OF LIMBS IN THE PENALTY NOTICE. THUS , THE LD CIT A AT PARA 6.2 DELETES THE PENALTY BY RELYING ON EARLIER YEARS ORD ERS OF THE ITAT AND A PASSING REFERENCE TO RELIANCE PETRO , 322ITR158SC . THE NON-APPLICATION OF MIND BY THE LD CIT A IS AMPL Y EVIDENT. HE WRONGLY RELIES ON THE EARLIER YEARS ORDERS WHICH AR E ON NON-STRIKING OFF , WHILE DISMISSING THE IDENTICAL ADDITIONAL GRO UND OF THE ASSESSEE BY RELYING ON THE DECISION OF THE HON'BLE ITAT IN E ARTHMOVING EQUIPMENT, WHICH WAS THE LAW PREVALENT AT THE TIME OF PASSING THE ORDER. THE LD CIT A HAS DISCUSSED THE FACTS OF THE DISALLO WANCE IN DETAIL AT PARA 3 AND HAS ALSO DETAILED THE OUTCOME OF THE DIS ALLOWANCE IN THE APPEAL BEFORE THE ITAT. HE IS ALSO AWARE THAT DISAL LOWANCES ON IDENTICAL GROUNDS WERE MADE IN THE EARLIER ASSESSME NT YEARS. YET, THE LD CIT A CHOSE TO TAKE SHELTER UNDER RELIANCE PETRO WITHOUT ANY DETAILED REASONING AS TO THE APPLICATION OF THIS DE CISION TO THE PRESENT CASE. THE HON'BLE SC IN RELIANCE PETRO WAS BASED ON THE F ACTUAL MATRIX OF PENALTY U/S 271(1] ( C] ARISING FROM DISALLOWANCE U/S 14 A. THE HON'BLE SC HELD THAT MAKING AN INCORRECT CLAIM IN L AW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. TH E LD CIT A HAS NOT GIVEN ANY REASONING AS TO HOW THE REPEATED CLAIM AC ROSS AYS U/S 36(LJ(YIIAJ AND ALSO THE FACT OF CLAIM OF NON-RURAL BRANCHES AS RURAL BRANCHES WOULD NOT TANTAMOUNT TO FURNISHING OF INAC CURATE PARTICULARS AND CONCEALMENT. IT IS AMPLY EVIDENT THAT THE LD CI T A HAS DEMONSTRATED TOTAL NON-APPLICATION OF MIND AND FURT HER LACK OF REASONING IN ARRIVING AT HIS DECISION. 7. HON'BLE BOM HC : THE DECISION OF THE HON'BLE HC OF BOMBAY IN MOHD. FARHAN A SHAIKH DT 11.03.2021 [[2021] 125 TAXMANN.COM 253 ( BOMBAY)] UNAMBIGUOUSLY STATES THAT WHERE ASSE SSMENT ORDER CLEARLY RECORDS SATISFACTION FOR IMPOSING PENALTY O N ONE OR THE OTHER , OR BOTH GROUNDS MENTIONED IN SEC 271(LJ(C}, A MERE DEFECT IN NOTICE , NOT STRIKING OF RELEVANT MATTER WOULD VITIATE PENAL TY PROCEEDINGS. 8 ITA 2138/MUM/2018 CO 215/MUM/2019 PLEASE SEE PARAS 32 TO 39. THE HON'BLE BOMBAY HIGH COURT IN THIS DECISION HAS DISCUSSED THREADBARE ALL THE DECISIONS OF VARIOUS HIGH COURTS OF THE LAND ON THE ISSUE OF NON-STRIKING OF LIMBS OF PENALTY U/S 271(1)( C ) IN THE PENALTY NOTICE. IN THESE PARAS W HERE THE DECISION OF THE HON'BLE HC OF KARNATAKA IN MANJUNATHA COTTON IS DISCUSSED THE POSSIBILITY OF BOTH THE LIMBS BEING INVOKED IS ESTA BLISHED. AT PARA 38 IT IS STATED THAT,'... INDEED SOME CASES MAY ATTRAC T BOTH THE OFFENCES AND SOME OTHER CASES MAY HAVE AN OVERLAPPING OF TWO OFFENCES. THEN, IN SUCH CASES, TOO, THE PENALTY PROCEEDINGS MUST BE FOR BOTH OFFENCES....' AT PARA 188 , THE DECISION READS THAT,'... IT IS IN THE INTEREST OF FAIRNESS AND JUSTICE THAT THE NOTICE MUST BE PRECISE. IT SHO ULD GIVE NO ROOM FOR AMBIGUITY.' THE PENALTY NOTICE HAS CHARGED THE ASSESSEE WITH BO TH THE LIMBS OF CONCEALMENT AND FURNISHING OF INACCURATE PARTICULAR S. THE ASSESSEE HAS IN FACT MET THIS CHARGE IN ITS REPLY AT S NO 2,4,7, 9, AND 10 REPRODUCED AT PARA 5 OF THE PENALTY ORDER. THE PENALTY ORDER A CCORDINGLY LEVIED PENALTY U/S 271(1) (C] DUE TO BOTH THE LIMBS OF CON CEALMENT AND FURNISHING OF INACCURATE PARTICULARS BEING ESTABLIS HED. THUS , IT IS AMPLY EVIDENT THAT THERE IS NO INFRACT ION IN FACT AND IN LAW WITH RESPECT TO THE PENALTY NOTICE ISSUED U/S 271(1 ] (C ]. 8. MERITS OF THE LEVY OF PENALTY U/S 271(1) (C ) HAVE BEEN DISCUSSED AT LENGTH IN PARA 6 OF THE PENALTY ORDER. THE CLAIM OF THE DISALLOWANCE HAS BEEN MADE REPEATEDLY OVER SEVERAL ASSESSMENT YE ARS. THE ARGUMENT OF THE LD COUNSEL FOR ASSESSEE THAT THE PO PULATION CERTIFICATES IN RESPECT OF RURAL BRANCHES HAVE NOW BEEN OBTAINED WHICH CLEARLY ESTABLISH THAT THESE ARE INDEED RURAL CANNO T BE ALLOWED AS THIS WAS NEVER BEFORE THE AO IN ASSESSMENT PROCEEDINGS, BEFORE THE CIT A OR ITAT IN QUANTUM APPEAL PROCEEDINGS, AND NEVER BE FORE THE AO IN PENALTY PROCEEDINGS. THIS EVIDENCE WAS NOT ADDUCED EVEN IN THE HEARING EVEN THOUGH THREE PAPER BOOKS WERE FURNISHE D BY THE ASSESSEE BANK. THE ARGUMENT OF THE ASSESSEE THAT THE HON'BLE BOM H C HAS ADMITTED A QUESTION OF LAW IN THE CASE OF MAHALAXMI COOP BANK ON THE ISSUE OF DISALLOWANCE U/S 36 (1) (VIIA) IS OF NO RELEVANCE A S THE ASSESSEE HAS NEITHER GONE IN APPEAL IN ITS OWN CASE ON QUANTUM N OR SOUGHT FOR THE PENALTY APPEAL TO BE KEPT IN ABEYANCE TILL THE OUTC OME OF THE APPEAL IN MAHALAXMI COOP BANK. THE DECISION OF THE ITAT IN MA HALAXMI WAS 9 ITA 2138/MUM/2018 CO 215/MUM/2019 IN FACT RELIED UPON BY THE ITAT IN THE CASE OF THE ASSESSEE TO UPHOLD THE DISALLOWANCE. IN VIEW OF THE ABOVE, IT IS HUMBLY SUBMITTED THAT T HE APPEAL OF REVENUE BE ALLOWED AND THE CO FILED BY THE ASSESSEE BANK BE DISMISSED. 9. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. UNDISPUTEDLY, THE ASSESSEE HAS CHALLENGED THE VALID ITY OF THE PENALTY ORDER PASSED UNDER SECTION 271(1)(C OF THE ACT BECAUSE OF THE DE FECTIVE SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 R .W.S. 271(1)(C) OF THE ACT. PERTINENTLY, A PERUSAL OF THE SHOW CAUSE NOTICE DAT ED 14-03-2017 ISSUED UNDER 274 R.W.S. 271(1)(C) OF THE ACT, A COPY OF WHICH IS AT PAGE 46 OF THE PAPER BOOK, MAKES IT CLEAR THAT THE ASSESSING OFFICER HAS NOT M ENTIONED THE SPECIFIC LIMB OF SECTION 271(1)(C) OF THE ACT APPLICABLE TO ASSESSEE , BY STRIKING OFF THE INAPPLICABLE WORDS. IN FACT, THE ASSESSING OFFICER HAD AGAIN ISS UED A NOTICE DATED 19-06-2017 TO THE ASSESSEE REQUIRING TO SHOW CAUSE WHY PENALTY UN DER SECTION 271(1)(C) OF THE ACT SHOULD NOT BE LEVIED. HOWEVER, A REFERENCE TO T HE SAID NOTICE, A COPY OF WHICH IS AT PAGE 47 OF THE PAPER BOOK, WOULD REVEAL THAT, THOUGH, THE ASSESSING OFFICER HAS REFERRED TO HIS EARLIER SHOW CAUSE NOTICE ISSUE D IN THE PRINTED FORM; HOWEVER, IN THE SUBSEQUENT NOTICE ALSO HE HAS NOT MENTIONED THE SPECIFIC LIMB OF SECTION 271(1)(C) OF THE ACT FOR WHICH HE INTENDED TO IMPOS E PENALTY. WHEREAS, A PERUSAL OF THE ASSESSMENT ORDER PASSED FOR THE IMPUGNED ASS ESSMENT YEAR CLEARLY REVEALS THAT THE ASSESSING OFFICER HAS INITIATED PROCEEDING FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ALLEGING FURNISHING OF ACCURATE PARTICULARS OF INCOME. 10. FURTHER, A CAREFUL PERUSAL OF THE IMPUGNED PENA LTY ORDER ALSO REVEALS THAT THE ASSESSING OFFICER HAS ULTIMATELY LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE CHARGE OF FURNISHING OF INACCURATE PARTI CULARS OF INCOME. THIS FACT IS 10 ITA 2138/MUM/2018 CO 215/MUM/2019 CLEARLY EVIDENT FROM THE OBSERVATIONS OF THE ASSESS ING OFFICER AT PARAGRAPH 8 AND 9 OF THE PENALTY ORDER. THUS, A CONJOINT READING OF T HE ASSESSMENT ORDER AND PENALTY ORDER WOULD REVEAL THAT THE ASSESSING OFFIC ER, FROM THE VERY BEGINNING, INTENDED TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. WHEREAS, IN THE S HOW CAUSE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT ON 14-03-20 13, THE ASSESSING OFFICER HAS MENTIONED BOTH THE LIMBS OF SECTION 271(1)(C) OF TH E ACT WITHOUT STRIKING OFF THE WORDS CONCEALED THE PARTICULARS OF YOUR INCOME. E VEN, IN THE SUBSEQUENT SHOW CAUSE NOTICE ISSUED ON 09-06-2017, THOUGH, NOT IN A PRINTED FORM, THE ASSESSING OFFICER HAS STILL NOT DISCLOSED THE EXACT OFFENCE F OR WHICH HE INTENDED TO LEVY PENALTY. 11. FURTHER, THE FOLLOWING OBSERVATIONS OF THE ASSE SSING OFFICER IN THE REMAND REPORT FURNISHED TO LEARNED COMMISSIONER (APPEALS), AS REPRODUCED IN THE IMPUGNED ORDER OF LEARNED COMMISSIONER (APPEALS), W OULD SET AT REST THE FACTUAL POSITION REGARDING THE SPECIFIC LIMB FOR WHICH PENA LTY PROCEEDING WAS INITIATED:- AS WOULD BE SEEN, THE ASSESSING OFFICE HAS OBSERVE D AS UNDER:- (B) IN THE QUANTUM ORDER, AFTER DUE DELIBERATIONS , IT IS CLEARLY INDICATED BY THE AO THAT THE PENALTY PROCEE DING IS INITIATED FOR FURNISHING INACCURATE PARTICULARS WHICH SHOWS D UE APPLICATION OF MIND QUA PENALTY PROCEEDINGS. HOWEVER, WHILE NO TICE U/S 274 R.W.S. 271(1)(C) WAS ISSUED FOR INITIATION OF PENAL TY PROCEEDINGS STRIKING OFF THE IRRELEVANT POINT WAS NOT DONE INAD VERTENTLY. THUS, THERE IS A CLEAR ADMISSION BY THE ASSESSING OFFICER THAT THE SHOW CAUSE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT IS AN OMNIBUS/GENERIC NOTICE. 11 ITA 2138/MUM/2018 CO 215/MUM/2019 12. KEEPING IN VIEW THE AFORESAID FACTUAL POSITION, LET US DEAL WITH THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE. IN THIS REGARD, THE FOLLOWING SUBMISSIONS WOULD BE RELEVANT:- THE PENALTY NOTICE HAS CHARGED THE ASSESSEE WITH B OTH THE LIMBS OF CONCEALMENT AND FURNISHING OF INACCURATE PARTICULAR S. THE ASSESSEE HAS IN FACT MET THIS CHARGE IN ITS REPLY AT S NO 2,4,7, 9, AND 10 REPRODUCED AT PARA 5 OF THE PENALTY ORDER. THE PENALTY ORDER A CCORDINGLY LEVIED PENALTY U/S 271(1) (C] DUE TO BOTH THE LIMBS OF CON CEALMENT AND FURNISHING OF INACCURATE PARTICULARS BEING ESTABLIS HED. AS COULD BE SEEN FROM THE ABOVE QUOTED PORTION, LEA RNED DEPARTMENTAL REPRESENTATIVE HAS TRIED TO MAKE OUT A CASE THAT TH E ASSESSING OFFICER HAD INTENDED TO LEVY PENALTY UNDER BOTH THE LIMBS OF SE CTION 271(1)(C) OF THE ACT. THIS SUBMISSION OF LEARNED DEPARTMENTAL REPRESENTATIVE I S CONTRARY TO THE FACTS ON RECORD. WHEN THE ASSESSING OFFICER HAS UNEQUIVOCALL Y ACCEPTED THAT PENALTY PROCEEDING WAS INITIATED FOR THE OFFENCE OF FURNISH ING INACCURATE PARTICULARS OF INCOME, WE ARE AFRAID, AT THIS STAGE LEARNED DEPART MENTAL REPRESENTATIVE CANNOT IMPROVE UPON THE ADMITTED FACTUAL POSITION. 13. HAVING DEALT WITH THE FACTUAL ASPECT, AT THIS S TAGE, IT WOULD BE RELEVANT TO EXAMINE THE FULL BENCH DECISION OF THE HONBLE JURI SDICTIONAL HIGH COURT IN CASE OF MOHAMMED FARHAN A SHAIKH VS DCIT (SUPRA). AFTER CON SPECTUS OF A CATENA OF DECISIONS ON THE IMPACT OF NON STRIKING OFF OF INAP PROPRIATE WORDS IN THE SHOW CAUSE NOTICE ISSUED UNDER SECTION 274 QUA THE VALID ITY OF THE PENALTY PROCEEDING, THE HONBLE JURISDICTIONAL HIGH COURT HAS OBSERVED AS UNDER:- 179. BESIDES, THE PRIMA FACIE OPINION IN THE ASSESS MENT ORDER NEED NOT ALWAYS TRANSLATE INTO ACTUAL PENALTY PROCE EDINGS. THESE PROCEEDINGS, IN FACT, COMMENCE WITH THE STATUTORY N OTICE UNDER S. 271(L)(C) R/W S. 274. AGAIN, WHETHER THIS PRIMA FAC IE OPINION IS 12 ITA 2138/MUM/2018 CO 215/MUM/2019 SUFFICIENT TO INFORM THE ASSESSEE ABOUT THE PRECISE CHARGE FOR THE PENALTY IS A MATTER OF INFERENCE AND, THUS, A MATTE R OF LITIGATION AND ARISING OUT OF UNCERTAINTY. 180, ONE COURSE OF ACTION BEFORE US IS CURING A DEF ECT IN THE NOTICE BY THE REFERRING TO THE ASSESSMENT ORDER, W HICH MAY OR MAY NOT CONTAIN REASONS FOR THE PENALTY PROCEEDING S. THE OTHER COURSE OF ACTION IS THE PREVENTION OF DEFECT IN THE NOTICE AND THAT PREVENTION TAKES JUST A TICK MARK. PRUDENCE DE MANDS PREVENTION IS BETTER THAN CURE. ANSWERS : QUESTION NO. 1 : IF THE ASSESSMENT ORDER CLEARLY RE CORDS SATISFACTION FOR POSING PENALTY ON ONE OR THE OTHER , OR BOTH GROUNDS MENTIONED IN S. 271(2)(C), DOES A MERE DEFE CT IN THE .NOTICE NOT STRIKING OFF THE THE IRRELEVANT MATTE R VITIATE THE PENALTY PROCEEDINGS? 181. IT DOES. THE PRIMARY BURDEN LIES ON THE R EVENUE. IN THE ASSESSMENT PROCEEDINGS, IT FORMS AN O PINION, PRIMA FACIE OR OTHERWISE, TO LAUNCH PENALTY PROCEEDINGS AGAINST THE ASSESSEE. BUT THAT TRANSLATES INTO ACTION ONLY THR OUGH THE STATUTORY NOTICE UNDER S. 271(1)(C) R/W.S. 274 OF I T ACT. TRUE, THE ASSESSMENT PROCEEDINGS FORM THE BASIS FOR THE PENAL TY PROCEEDINGS, BUT THEY ARE NOT COMPOSITE PROCEEDINGS TO DRAW STRENGTH FROM EACH OTHER. NOR CAN EACH CURE THE OTH ER'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 ASS ESSMENT 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 PROVI SION, EVEN WITH CIVIL CONSEQUENCES, MUST BE CONSTRUED STRICTLY. AND AMBIG UITY, IF ANY, MUST BE RESOLVED IN THE AFFECTED ASSESSEES FA VOUR. 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 SCHE ME. THAT MEANS WE MUST HOLD THAT KAUSHALYA DOES NOT LAY DOWN THE COIREET PROPOSITION OF LAW. 13 ITA 2138/MUM/2018 CO 215/MUM/2019 QUESTION NO. 2 : HAS KAUSHALYA FAILED TO DISCUSS TH E ASPECT OF 'PREJUDICE'? 184. INDEED, KAUSHALYA DID DISCUSS THE ASPECT OF PR EJUDICE. AS WE HAVE ALREADY NOTED, KAUSHALYA NOTED THAT THE ASSESS MENT ORDERS ALREADY CONTAINED THE REASONS WHY PENALTY SHOULD BE INITIATED. SO, THE ASSESSEE, STRESSES KAUSHALYA, 'FULLY KNEW IN DE TAIL THE EXACT CHARGE OF THE REVENUE AGAINST HIM'. FOR KAUSHALYA, THE STATUTORY NOTICE SUFFERED FROM NEITHER NON-APPLICATION OF MIN D NOR ANY PREJUDICE. ACCORDING TO IT, 'THE SO-CALLED AMBIGUOU S WORDING IN THE NOTICE (HAS NOT) IMPAIRED OR PREJUDICED THE RIGHT O F THE ASSESSEE TO A REASONABLE OPPORTUNITY OF BEING HEARD'. IT WENT O NTO OBSERVE THAT FOR SUSTAINING THE PLEA OF NATURAL JUSTICE ON THE G ROUND OF ABSENCE OF OPPORTUNITY, 'IT HAS TO BE ESTABLISHED THAT PREJ UDICE IS CAUSED TO THE CONCERNED PERSON BY THE PROCEDURE FOLLOWED'. KA USHALYA CLOSES THE DISCUSSION BY OBSERVING THAT THE NOTICE ISSUING 'IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE AB OUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN A S TO WHY IT SHOULD NOT BE DONE'. 185. NO DOUBT, THERE CAN EXIST A CASE WHERE VAGUENE SS AND AMBIGUITY IN THE NOTICE CAN DEMONSTRATE NON-APPLICA TION OF MIND BY THE AUTHORITY AND/OR ULTIMATE PREJUDICE TO THE RIGH T OF OPPORTUNITY OF HEARING CONTEMPLATED UNDER S. 274. SO ASSERTS KAUSH ALYA. IN FACT, FOR ONE ASSESSMENT YEAR, IT SET ASIDE THE PENALTY P ROCEEDINGS 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 JUS TIFICATION, AVOIDS PREJUDICE TO THE ASSESSEE. THAT IS WHERE, WE RECKON , THE REASONING SUFFERS. KAUSHALYA'S INSISTENCE THAT THE PREVIOUS PROCEEDING S SUPPLY JUSTIFICATION AND CURE THE DEFECT IN PENALTY PROCEE DINGS 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 DILIP N. SHROFF, FOR THE SUPREME COURT, IT IS OF 'SOME SIGNIFICANCE THAT IN THE STANDARD PRO-FORMA USED BY THE AO IN ISSUING A NOTICE DESPITE THE FACT THAT THE SAME POS TULATES THAT INAPPROPRIATE WORDS AND PARAGRAPHS WERE TO BE DELET ED, BUT THE 14 ITA 2138/MUM/2018 CO 215/MUM/2019 SAME HAD NOT BEEN DONE'. THEN, DILIP N. SHROFF, ON FACTS, HAS FELT THAT THE AO HIMSELF WAS NOT SURE WHETHER HE HAD PRO CEEDED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED HIS INCOME OR HE HAD FURNISHED INACCURATE PARTICULARS. 188. WE MAY, IN THIS CONTEXT, RESPECTF ULLY OBSERVE THAT A CONTRAVENTION OF A MANDATORY CONDITION O R REQUIREMENT FOR A COMMUNICATION TO BE VALID COMMUNICATION IS FATAL, WITH NO FURTHER PROOF. THAT SAID, EVEN IF THE NOTICE CONTA INS NO CAVEAT THAT THE INAPPLICABLE PORTION BE DELETED, IT IS IN THE INTEREST OF FAIRNESS AND JUSTICE THAT THE NOTICE MUST BE PRECIS E. IT SHOULD GIVE NO ROOM FOR ANY AMBIGUITY. THEREFORE, DILIP N. SH ROFF DISAPPROVES OF THE ROUTINE, RITUALISTIC PRACTICE OF ISSUING OMNIBUS SHOW-CAUSE NOTICES. THAT PRACTICE CERTAI NLY BETRAYS NON- APPLICATION OF MIND. AND, THEREFORE, THE IN FRACTION OF A MANDATORY PROCEDURE LEADING TO PENAL CO NSEQUENCES ASSUMES OR IMPLIES PREJUDICE. 189. IN SUDHIR KUMAR SINGH, THE SUPREME COURT HAS ENCAPSULATED THE PRINCIPLES OF PREJUDICE. ONE OF TH E PRINCIPLES IS THAT 'WHERE PROCEDURAL AND /OR SUBSTANTIVE PR OVISIONS OF LAW EMBODY THE PRINCIPLES OF NATURAL JUSTICE, T HEIR INFRACTION PER SE DOES NOT LEAD TO INVALIDITY OF THE ORDERS PASSED. HERE AGAIN, PREJUDICE MUST BE CAUSED TO THE LITIGANT, 'E XCEPT IN THE CASE OF A MANDATORY PROVISION OF LAW WHICH IS CONCE IVED NOT ONLY IN INDIVIDUAL INTEREST BUT ALSO IN THE PUBLIC INTER EST'. 190. HERE, S. 271(L)(C) IS ONE SUCH PROVISION. WITH CALAMITOUS, ALBEIT THE COMMERCIAL, CONSEQUENCES, THE PROVISION IS MAND ATORY AND BROOKS NO TRIFLING WITH OR DILUTION. FOR A FURT HER PRECEDENTIAL PROP, WE MAY THAT REFER TO RQJESH KUMAR & ORS. VS. CIT (2006) 206 CTR (SC) 175 : (2007) 2 SCC 181, IN WHICH THE A PEX COURT HAS QUOTED WITH APPROVAL ITS EARLIER JUDGMENT IN ST ATE OF ORISSA US. DR. BINAPANI DEI AIR 1967 SC 1269. ACCORDING TO IT, WHEN BY REASON OF ACTION ON THE PART OF A STATUTORY AUTHORI TY, CIVIL OR EVIL 15 ITA 2138/MUM/2018 CO 215/MUM/2019 CONSEQUENCES ENSUE, PRINCIPLES OF NATURAL JUSTICE M UST BE FOLLOWED. IN SUCH AN EVENT, ALTHOUGH NO EXPRESS PR OVISION IS LAID DOWN ON THIS BEHALF, COMPLIANCE WITH PRI NCIPLES OF NATURAL JUSTICE WOULD BE IMPLICIT. IF A STATUE CONT RAVENES THE PRINCIPLES OF NATURAL JUSTICE, IT MAY ALSO BE HELD ULTRA VIRES ART. 14 OF THE CONSTITUTION. 191. AS A RESULT, WE HOLD THAT DILIP N. SHROFF TREA TS OMNIBUS SHOW- CAUSE NOTICES AS BETRAYING NON- APPLICATION O F MIND AND DISAPPROVES OF THE PRACTICE, TO BE PARTICULAR, OF ISSUING NOTICES IN PRINTED FORM WITHOUT DELETING OR STRIKING OFF THE I NAPPLICABLE PARTS OF THAT GENERIC NOTICE. 14. A CAREFUL READING OF THE AFORESAID OBSERVATIONS /FINDING WOULD MAKE IT AMPLY CLEAR THAT NOT ONLY THE HONBLE HIGH COURT HA S HELD THAT THE EARLIER DECISION IN CASE OF SMT. KAUSHALYA & OTHERS (1995) 216 ITR 2 60 DOES NOT LAY DOWN THE CORRECT PROPOSITION OF LAW, BUT THEY HAVE ALSO VERY CLEARLY AND CATEGORICALLY HELD THAT THE DEFECT IN THE SHOW CAUSE NOTICE BY NOT STR IKING OFF THE IRRELEVANT MATTER VITIATES THE PENALTY PROCEEDINGS. THIS IS SO BECAUS E THE ASSESSEE MUST BE INFORMED OF THE GROUNDS OF THE PENALTY PROCEEDINGS ONLY THROUGH THE STATUTORY NOTICE. THE HONBLE COURT HAS OBSERVED THAT AN OMNI BUS NOTICE SUFFERS FROM THE VICE OF VAGUENESS. PROCEEDING FURTHER, THE HONBLE COURT HAS HELD THAT A PENALTY PROVISION EVEN FOR CIVIL CONSEQUENCES, MUST BE CONS TRUED STRICTLY AND AMBIGUITY, IF ANY, MUST BE RESOLVED IN ASSESSEES FAVOUR. WHILE COMING TO SUCH CONCLUSION, THE HONBLE JURISDICTIONAL HIGH COURT HAS ALSO REFERRED TO THE DECISION OF THE HONBLE SUPREME COURT IN CASE OF DILIP N SHRFOFF (SUPRA), W HEREIN, THE HONBLE SUPREME COURT DISAPPROVED THE ROUTINE RITUALISTIC PRACTICE OF OMNIBUS SHOW CAUSE NOTICE ISSUED IN PRINTED FORM WITHOUT DELETING OR STRIKING OFF THE INAPPLICABLE PART, WHICH 16 ITA 2138/MUM/2018 CO 215/MUM/2019 BETRAYS NON APPLICATION OF MIND. THEREFORE, THE INF RACTION OF A MANDATORY PROCEDURE LEADING TO PENAL CONSEQUENCES ASSUMES OR IMPLIES PREJUDICE. 15. THEREFORE, IF WE APPLY THE RATIO LAID DOWN IN THE AFORESAID FULL BENCH DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT T O THE FACTS OF THE PRESENT APPEAL, IT CAN BE SEEN THAT THE ASSESSING OFFICER HAS ISSUE D A GENERIC SHOW CAUSE NOTICE IN A PRINTED FORM WITHOUT MENTIONING THE SPECIFIC CHAR GE BY STRIKING OFF THE INAPPLICABLE WORDS. THUS, THE SHOW CAUSE NOTICE ISS UED UNDER SECTION 274 R.W.S SECTION 271(1)(C) IS A VAGUE AND OMNIBUS NOTICE REV EALING COMPLETE NON- APPLICATION OF MIND BY THE ASSESSING OFFICER. THUS, VIEWED IN THE LIGHT OF THE RATIO LAID DOWN BY THE FULL BENCH OF THE HONBLE JURISDIC TIONAL HIGH COURT (SUPRA), THE PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT, HAS TO BE DECLARED AS INVALID. IN FACT, THE DIVISION BENCH DECISION OF TH E HONBLE JURISDICTIONAL HIGH COURT IN CASE OF VENTURA TEXTILES LTD VS CIT (SUPRA) (ALS O TAKEN NOTE OF BY THE HONBLE FULL BENCH) ALSO PROPOUNDED SIMILAR LEGAL PRINCIPLE S. 16. IT WILL BE RELEVANT TO OBSERVE, IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2008-09 VIDE ITA NO.3043/MUM/2015 DATED 16-06-2017, THE TRIBUNAL TAKING NOTE OF THE FACT THAT THE SHOW CAUSE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT SUFFERS FROM DEFECT AS INAPPLICABLE WORDS W ERE NOT STRUCK OFF, HAS DELETED THE PENALTY. SIMILAR VIEW WAS EXPRESSED BY THE TRI BUNAL WHILE DECIDING ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10 VIDE ITA NO.5038 /MUM/2015 DATED 15-11- 2017. ALTHOUGH, AT THAT RELEVANT POINT OF TIME THE FULL BENCH DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA) WAS NOT A VAILABLE BEFORE THE BENCH; HOWEVER, THE LEGAL PRINCIPLE FOLLOWED BY THE CO-ORD INATE BENCH IS IN CONFORMITY WITH THE RATIO LAID DOWN BY THE FULL BENCH OF THE H ONBLE JURISDICTIONAL HIGH COURT (SUPRA). 17 ITA 2138/MUM/2018 CO 215/MUM/2019 17. THUS, RESPECTFULLY FOLLOWING THE FULL BENCH DEC ISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN CASE OF MOHAMMED FARHA N A SHAIKH VS DCIT (SUPRA) AND THE DECISION OF HONBLE SUPREME COURT IN THE CA SE OF DILIP N SHROFF (SUPRA), WE HOLD THE IMPUGNED ORDER PASSED UNDER SECTION 271 (1)(C) OF THE ACT AS INVALID AND WITHOUT JURISDICTION DUE TO DEFECT IN THE SHOW CAUSE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT. THUS, THE PENALTY ORDER PASSED IN PURSUANCE THERETO, BEING VITIATED, HAS TO BE QUASHE D. ACCORDINGLY, WE UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN DELET ING THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT, THOUGH, BASED O N OUR OWN REASONING HEREINABOVE. 18. SINCE, WE HAVE DECIDED THE LEGAL ISSUE, AS RAIS ED IN THE CROSS OBJECTION, IN FAVOUR OF THE ASSESSEE, WE DO NOT INTEND TO DWELL U PON THE MERITS. 19. IN THE RESULT, CROSS OBJECTION IS ALLOWED AS IN DICATED ABOVE AND REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON 28/06/2021. SD/- SD/- (S.RIFAUR RAHMAN) SAKTIJIT DEY ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 28/06/2021 PAVANAN 18 ITA 2138/MUM/2018 CO 215/MUM/2019 COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI