DY CIT CC 2 (3), MUMBAI V. MS PREITY ZINTA , MUMBAI

ITA 6823/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7821 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 05-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KERSY LALKAKA
• Keywords: Opportunity of being heard; Principle of natural justice; Initiation of penalty proceedings; Reasonable cause; Set aside
• Section: 271(1)(c); 143(3); 274; 192; 139(1); 13

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI JUSTICE P.P. BHATT (PRESIDENT) & SHRI SHAMIM YAHY A (AM) I.T.A. NO. 6823/MUM/2019 (ASSESSMENT YEAR 2014-15 ) DCIT, CC-2(3) OLD CGO BUILDING 8 TH FLOOR, M.K. ROAD MUMBAI-400 020. VS . MS. PREITY ZINTA 10 TH FLOOR QUANTUM PARK NEAR UNION PARK KHAR WEST MUMBAI-400 052. ( APPELLANT ) ( RESPONDENT ) C.O. NO. 98/MUM/2021 (ASSESSMENT YEAR 2014-15) MS. PREITY ZINTA 10 TH FLOOR QUANTUM PARK NEAR UNION PARK KHAR WEST MUMBAI-400 052. VS . DCIT, CC-2(3) OLD CGO BUILDING 8 TH FLOOR, M.K. ROAD MUMBAI-400 020. (APPELLANT) (RESPONDENT) PAN : AAAPZ2650B ASSESSEE BY SHRI KERSY LALKAKA DEPARTMENT BY MS. SHREEKALA PARDESHI DATE OF HEARING 04.08.2021 DATE OF PRONOUNCEMENT 03. 0 9 . 20 21 O R D E R PER SHAMIM YAHYA, AM :- THIS IS REVENUES APPEAL AND CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [IN SHORT LEARNED CIT(A)] DATED 19.8.2019 PERTAIN TO ASSESSME NT YEAR 2014-15. 2. GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER :- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AN D IN LAW, LEARNED CIT(A) IS JUSTIFIED IN DELETING THE PENALTY UNDER SEC TION 271(1)(C) LEVIED ON DISALLOWANCE OF INTEREST WHICH HAS BEEN ACCEPTED BY THE ASSESSEE IN QUANTUM ORDER ? PREITY ZINTA 2 2. THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND AND/OR TO ALTER ANY OF THE GROUNDS OF APPEAL, IF NEED BE. 3. THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROUNDS STATED ABOVE THE ORDER OF LEARNED CIT(A)-48, MUMBAI MAY BE SET ASIDE AND THAT O F THE ASSESSING OFFICER RESTORED. 3. GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN CROS S OBJECTION READ AS UNDER :- 1. ON THE FADS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN FAILING TO ADJUDICATE THE SECOND GROUND PREFERRED OF THE 'GROUNDS OF APPEAL' NAMELY 'THE LD. ASSESSING OFFICER HAS FAILED TO SPECIFY IN THE NOTICE U/S.274 R.W. SECTION 271(L)(C) THE REASONS/JUSTIFICATION FOR L EVY OF PENALTY BY MENTIONING 'HAVE CONCEALED THE PARTICULARS OF YOUR INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME THE REBY BEING AMBIGUOUS ON REASONS/JUSTIFICATION FOR LEVYING PENALT Y''. THEREBY VIOLATING THE PRINCIPLE OF NATURAL JUSTICE BY F AILING TO GIVE THE APPELLANT A REASONABLE OPPORTUNITY OF BEING HEARD . 4. BRIEF FACTS ARE THAT IN THIS CASE ASSESSMENT U/S . 143(3) WAS COMPLETED ON 13.12.2016 ASSESSING LOSS OF RS. 20,07,86,722/- AS AGAINST RETURNED LOSS OF RS. 22,59,74,821/-. THE MAJOR DISALLOWANCE WAS ON A CCOUNT OF INTEREST OF RS. 1,72,70,635/-, WHICH PERTAIN TO F.Y. 2012-13 RELEVA NT TO A.Y. 2013-14 AND NOT FOR THE YEAR UNDER CONSIDERATION I.E. A.Y. 2014-15. PENALTY PROCEEDINGS WERE INITIATED BY ISSUE OF NOTICE U/S. 271(1)(C) FOR FUR NISHING INACCURATE PARTICULARS OF INCOME. ORDER U/S. 271(1)(C) LEVYING PENALTY OF RS. 56,77,679/- WAS PASSED ON 28.06.2017. AO HAS MENTIONED THAT ASSESSEE HAS C LAIMED PAYMENT OF BANK INTEREST FOR A.Y. 2014-15, HOWEVER, THERE IS NO LOA N FROM THE BANK ON THE LIABILITY SIDE. THE SUBMISSIONS MADE BY THE ASSESSE E, VIDE ASSESSEE'S LETTER DATED 05.12.2016 EXPLAINING THE INCURRING OF INTERE ST EXPENSES ON THE LOAN TAKEN FOR THE MOVIE 'ISHQUE IN PARIS', A PROJECT, W HICH WAS COMMENCED DURING F.Y. 2011-12 AND CONCLUDED IN F.Y 2013-14 HAS ALSO BEEN INCORPORATED BY AO IN THE ASSESSMENT ORDER. REGARDING NON-APPEARANCE O F BANK LOAN IN THE BALANCE SHEET, THE SUBMISSION OF ASSESSEE IS THAT T HIS EXPENDITURE IS MENTIONED IN THE STATEMENT OF ENTIRE EXPENSES SUBMI TTED FOR THIS MOVIE AND PREITY ZINTA 3 THAT THE ENTIRE LOAN WAS REPAID BY 31.03.2013 AND, THEREFORE, THERE WAS NO OUTSTANDING REFLECTED IN THE BALANCE SHEET. 5. IN THE PENALTY ORDER ALSO, IT IS SEEN THAT AO HA S INCORPORATED THE SAME SUBMISSION OF ASSESSEE, STATING THAT THE INTEREST C HARGES AND INTEREST PAYMENT FALLING IN A.Y. 2011-12 TO 2013-14 FOR THE MOVIE 'I SHQUE IN PARIS' ARE PART OF ENTIRE PROJECT OF MOVIE. AO HAS LEVIED THE PENALTY BECAUSE THE INTEREST EXPENDITURE OF RS. 1,72,70,635/- HAS BEEN HELD AS P ERTAINING TO EARLIER YEARS I.E. F.Y. 2011-12 AND 2012-13 AND THUS CLAIM OF ASS ESSEE FOR INTEREST OF RS. 1,72,70,635/- IS HELD ARE INCORRECT AND INADMISSIBL E. THE INTEREST EXPENDITURE CLAIMED OF RS. 5,15,808/- HAS BEEN ALLOWED AS WAS P ERTAINING TO RELEVANT A.Y. 2014-15. 6. UPON ASSESSEES APPEAL LEARNED CIT(A) DELETED TH E PENALTY BY OBSERVING AS UNDER : (1) THE PERUSAL OF RETURN OF INCOME FOR A.Y. 2014-1 5 CLEARLY SHOWS THAT ASSESSEE HAS DISCLOSED THE PROFIT/LOSS FROM THE MOVI E 'ISHQUE IN PARIS' DURING THE YEAR. THE ENTIRE EXPENSES OF VARIOUS HEAD S FOR MAKING OF THIS MOVIE AS WELL AS INCOME FROM SATELLITE RIGHTS, THEATR E INCOME AND T-SERIES MUSIC RIGHTS OF THE MOVIE TOTALING TO RS. 23,56,22,915/- HAVE BEEN COMPUTED, WHICH HAVE BEEN DEBITED 7 CREDITED TO THE P &L ACCOUNT. 7. THEREAFTER SHE REPRODUCED THE FILM PROJECT ACCOU NT PREPARED. SHE CONCLUDED AS UNDER : (2) THERE IS NO SEPARATE FINDING BY AO THAT THE EXP ENSES CLAIMED BY ASSESSEE ARE BOGUS. THEREFORE, IT IS NOT A CASE THAT TH E EXPENSES HAVE BEEN HELD TO BE BOGUS OR NON-GENUINE. (3) SINCE THE ENTIRE EXPENSES AND INCOME FROM THE M OVIE (SPREAD OVER THREE YEARS OF MAKING), RESULTING IN NET LOSS HAS BEEN CLAI MED AND ALLOWED BY AO AS A WHOLE (EXCEPT FOR INTEREST). SEPARATE TREATMENT TO INTEREST CLAIM BY AO IS NOT IN CONSONANCE WITH ALLOWING OF OTHER EXPENSES BY AO, WHICH ALSO PERTAINED TO EARLIER FINANCIAL YEARS. HAVING ALLOWED A LARGE PART OF OTHER EXPENSES, AO CANNOT HOLD INTEREST CLAIM ' ONLY AS BOGU S AND LEVY PENALTY ON SUCH CLAIM'. (4) 'ISHQUE IN PARIS' FILM PROJECT WAS SHOWN AS WORK -IN-PROGRESS. IN THE BALANCE SHEET FOR A.Y. 2012-13, AMOUNT OF RS. 5,72,2 2,172/-, WHICH INCLUDED FINANCIAL COST CONSISTING OF BANK CHARGES A ND BANK INTEREST OF RS. 46,56,704/- IS SHOWN. CENTRAL BANK OF INDIA LOAN OF RS. 7,50,00,000/- IS ALSO DECLARED WITH THESE DETAILS. SIMILARLY, FOR A.Y. 2013-14, 'ISHQUE IN PARIS' PREITY ZINTA 4 PROJECT WORK-IN-PROGRESS IS DECLARED AS ASSET AMOUNTI NG TO RS. 20,83,87,137/- AND THE DETAILS OF INCOME AND EXPENSE S AND THE DETAILS OF PROJECT COST/INCOME AND DETAILS OF BANK CHARGES AND TH E BANK INTEREST OF RS. 1,72,70,635/- ARE DISCLOSED. [THOUGH APPARENTLY RETUR N FOR A.Y. 2013-14 WAS NOT FILED IN TIME U/S. 139(1)]. (5) FURTHER, WITHOUT GIVING A FINDING THAT THESE EXP ENSES ARE BOGUS, WHEN THE WORK-IN-PROGRESS FOR THE FILM PROJECT HAS BEEN DU LY REFLECTED IN THE RETURNS FOR A.Y. 2014-15, THERE CANNOT BE ANY PENALTY FOR CONCEALMENT OR INACCURATE PARTICULARS AS FACTS AND DETAILS OF THE PRO JECT ARE ALREADY DECLARED BY ASSESSEE IN THE RETURNS OF INCOME. (6) FURTHER, THE ASSESSEE HAS ALSO FILED COPY OF CE NTRAL BANK OF INDIA LETTER DATED 14.10.2011, WHICH SHOWS THE TERM LOAN FOR THE MOVIE. 5.1.3 IN VIEW OF ABOVE DETAILS, IT IS CLEAR THAT THER E IS NO CASE FOR LEVY OF PENALTY FOR CONCEALMENT OF INCOME/EXPENSES AS THE SAM E HAS BEEN DULY DECLARED BY THE ASSESSEE AND ALSO THERE IS NO FINDI NG TO THE CONTRARY BY THE AO. 5.1.4 REGARDING AMOUNT OF RS. 1,72,70,635/- CLAIMED, BUT PERTAINING TO A.Y. 2012-13 AND A.Y. 2013-14, EXPLANATION OF ASSESSEE IS VALID AS PER EXPLANATION 1 TO SECTION 271(1)(C). HENCE, EVEN THOUGH THERE IS ADDITION IN 143(3) OF RS. 1,72,70,635/-, WHICH HAS BECOME FINAL (APPARENTLY ASSESSEE DID NOT FILE APPEAL AGAINST SUCH ADDITION), HOWEVER, THERE IS NO CAUSE FOR INVOKING SECTION 271(1)(C) AS ASSESSEE'S EXPLANATION FOR AMO UNT OF ADDITION IS SUBSTANTIATED AND EXPLANATION HAS NOT BEEN HELD TO BE F ALSE. HENCE, DESPITE THE ADDITION, THE PENALTY IS NOT LEVIABLE. THEREFORE, PENALTY LEVIED U/S. 271(1)(C) IS QUASHED. 8. AGAINST THE ABOVE ORDER REVENUE IS IN APPEAL BEF ORE US AND ASSESSEE HAS FILED CROSS OBJECTION. SINCE THE CROSS OBJECTION CH ALLENGES THE JURISDICTION WE ADDRESS THE SAME FIRST. THE GROUNDS RAISED IN THIS REGARD MAY BE REPEATED HERE FOR THE SAKE OF CLARITY :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LEARNED CIT(A) HAS ERRED IN FAILING TO ADJUDICATE THE SECOND GROUND PREFERRED OF THE GROUNDS OF APPEAL NAMELY THE LEARNED ASSESSING OFFICER HAS FIALED TO SPECIFY IN THE NOTICE UNDER SECTION 274 R.W. SECTION 271(1)(C) THE REASONS/JUST IFICATION FOR LEVY OF PENALTY BY MENTIONING HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME TH EREBY BEING AMBIGUOUS ON REASONS/JUSTIFICATION FOR LEVYING PENALT Y. THEREBY VIOLATING THE PRINCIPLE OF NATURAL JUSTICE BY FAILING TO GIVE THE APPELLANT A REASONABLE OPPORTUNITY OF BEING HEARD. 9. IN THIS REGARD LEARNED COUNSEL OF THE ASSESSEE S HRI KERSY LALKAKA SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAV OUR OF THE ASSESSEE BY THE PREITY ZINTA 5 DECISION OF FULL BENCH OF HON'BLE JURISDICTIONAL HI GH COURT IN MOHAMMED FARHAN A. SHAIKH VS. PCIT (125 TAXAMNN.COM 253) VID E ORDER DT. 11.3.2021. 10. PER CONTRA LEARNED DEPARTMENTAL REPRESENTATIVE MS. SHREEKALA PARDESHI COULD NOT DISPUTE THE PROPOSITION THAT THE JURISDIC TION ISSUE IS IN FAVOUR OF THE ASSESSEE BY THE AFORESAID DECISION OF HON'BLE BOMBA Y HIGH COURT. 11. UPON CAREFUL CONSIDERATION WE FIND THAT IT WILL GAINFUL TO REFER TO THE NOTICES UNDER SECTION 271(1)(C) OF THE ACT GIVEN TO THE ASSESSEE AS SUBMITTED BY THE ASSESSEE IN THE PAPER BOOK BEFORE US:- TO, SMT. PREITY DURGANANND ZINTA WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR TH E A.Y, 2014-15, IT APPEARS THAT YOU: * HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH ME RETURN OF INCOME WHICH YOU WERE REQUIRED TO FURNISH BY A NOTICE GIVEN UNDER SECTION 22(L)/22(2)/34 OF THE INDIAN INCOME-TAX ACT, 1922 OR WHICH YOU WERE REQUIRED TO FURNISH UNDER SECTION 139(1)/153A OR BY A NOTICE GIVEN UNDER SECTION 139(2)/148 OF THE INCOME-TAX ACT, 1961, OR HAV E WITHOUT REASONABLE CAUSE FAILED TO FURNISH IT WITHIN THE TIME ALLOWED AND THE MANNER REQUIRED BY THE SAID SECTION 139(1) OF BY SUCH NOTICE, * HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE UNDER SECTION 22(4)/23(2) OF THE INDIAN INCOME-TAX ACT, 192 2 OR UNDER SECTION 142(1)/143(2) OF THE INCOME-TAX ACT, 196.1. * CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISH ED INACCURATE PARTICULARS OF SUCH INCOME, * YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT A BOVE ADDRESS, WITHIN 7 DAYS FROM RECEIPT OF THIS NOTICE AND SHOW-CAUSE WHY AN ORDER IMPOSING PENALTY ON YOU SHOULD NOT BE MADE UNDER SECTION 271 O F THE INCOME-TAX ACT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THI S OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE, YOU MAY SHOW- CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH W ILL BE CONSIDERED BEFORE SUCH ORDER IS MADE UNDER SECTION 271(1)(C). * PENALTY PROCEEDING SECTION 271(1)(C) INITIATED. 12. NOW WE REFER TO HON'BLE BOMBAY HIGH COURT EXPOS ITION IN MOHAMMED FARHAN A. SHAIKH (SUPRA) AS UNDER :- PREITY ZINTA 6 WE HAVE ALREADY DISCUSSED WHAT CONSTITUTES THE RATIO D ECIDENDI OR CASE HOLDING AND WHAT IT TAKES TO B A PRECEDENT. NOW, WE WIL L SEE WHAT MAKES A PRECEDENT CONFLICT WITH ANOTHER. THE PRECEDENTIAL CONFLICT: 164. TO CUT THE DISCUSSION SHORT, WE WILL TAKE AID OF THE LATEST SUPREME COURT JUDGMENT ON THIS POINT. IN MAVILAYI SERVICE CO-OPERAT IVE BANK LTD. V. COMMISSIONER OF INCOME TAX[2021 SCC ONLINE SC 16] ( 'MAVILAYI'), THE QUESTION CONCERNS THE DEDUCTIONS A PRIMARY AGRICULTU RAL CREDIT SOCIETY CAN CLAIM UNDER SECTION 80P(2)(A)(I) OF THE IT ACT, AFTER THE INTRODUCTION OF SECTION 80P(4) OF THAT ACT. TWO DIVISION BENCHES OF KERALA H IGH COURT HAVE TAKEN CONFLICTING VIEWS THE LATTER DECISION BEING UNAWARE OF THE FORMER ONE. FINALLY, THAT PRECEDENTIAL CONFLICT STOOD RESOLVED THROUGH A FULL BENCH DECISION IN MAVILUYI SERVICE. CO-OPERATIVE BANK LTD. V. COMMISSIO NER OF INCOME TAX, CATICUT [2019 (2) KHC 287]. THIS FULL BENCH DECISIO N WAS TAKEN TO SUPREME COURT. THAT IS HOW, ON 12 JANUARY 2021, A THREE-JUDGE BENCH OF THE SUPREME COURT HAS DECIDED MAVILAYI. 165. MAVILAYI HAS NOTED THAT THE FULL BENCH OF KERALA HIGH COURT HAS REACHED ITS CONCLUSION BASED ON THE SUPREME COURT'S JUDGMENT CITIZEN COOPERATIVE SOCIETY LTD. V, ASST. CIT, HYDERABAD [(20 17) 9 SCC 364]. INDEED, MAVILAYI ACKNOWLEDGES THAT THE KERALA HIGH COURT'S FULL BENCH DID FOLLOW CITIZEN COOPERATIVE. BUT IT HOLDS THAT IN CITIZEN COOPER ATIVE SOCIETY LTD., THE COUNSEL FOR THE ASSESSEE ADVANCED NO ARGUMENT THAT 'THE ASSESSING OFFICER AND OTHER AUTHORITIES UNDER THE IT ACT COULD NOT GO BEH IND THE REGISTRATION OF THE I CO-OPERATIVE SOCIETY IN ORDER TO DISCOVER AS TO W HETHER IT WAS CONDUCTING BUSINESS IN ACCORDANCE WITH ITS J BYE-LAWS'. THAT SETS CITIZEN COOPERATIVE APART, ACCORDING TO MAVILAYI. 166. IN THIS CONTEXT, MAVILAYI HOLDS THAT ONLY THE RA TIO DECIDENDI OF A JUDGMENT BINDS AS A PRECEDENT. TO ELABORATE ON THIS P ROPOSITION, MAVILAYI REFERS TO STATE OF ORISSA V. SUDHANSHU SEKHAR MISRA [ (1968) 2 SCR 154], WHICH HOLDS THAT A DECISION IS ONLY AN AUTHORITY FOR WHAT IT ACTUALLY DECIDES. WHAT IS OF THE ESSENCE IN A DECISION IS ITS RATIO AND NOT EVERY OBSERVATION FOUND THEREIN, NOR WHAT LOGICALLY FOLLOWS FROM THE VAR IOUS OBSERVATIONS MADE IN IT. THEN, IT QUOTES DALBIR SINGH V. STATE OF PUNJAB[ 1919) 3 SCR 1059]. THOUGH IT WAS FROM THE DISSENTING JUDGMENT, MAVILAYI P OINTS OUT, IT REMAINED UNCONTRADICTED BY THE MAJORITY: ACCORDING TO THE WELL-SETTLED THEORY OF PRECEDENTS EVER Y DECISION CONTAINS THREE BASIC INGREDIENTS: (I) FINDINGS OF MATERIAL FACTS, DIRECT AND INFERENTIAL. AN INFERENTIAL FINDING OF FACTS IS THE INFERENCE WHICH THE JUDGE DRAWS FROM THE DIRECT OR PERCEPTIBLE FACTS; (II) STATEMENTS OF THE PRINCIPLES OF LAW APPLICAB LE TO THE LEGAL PROBLEMS DISCLOSED BY THE FACTS; AND PREITY ZINTA 7 (III) JUDGMENT BASED ON THE COMBINED EFFECT OF (I) AND (II) ABOVE.' FOR THE PURPOSES OF THE PARTIES THEMSELVES AND THEIR PRIVIES, INGREDIENT (HI} IS THE MATERIAL ELEMENT IN THE DECISIO N FOR IT DETERMINES FINALLY THEIR RIGHTS AND LIABILITIES IN RELATION TO THE SUBJECT-MATTER OF THE ACTION. IT IS THE JUDGMENT THAT ESTOPS THE PARTIES FROM REOPENING THE DISPUTE. HOWEVER, FOR THE PURPOSE OF THE DOCTRINE OF PRECEDENTS, INGREDIENT (II) IS THE VITAL ELEMENT IN THE DECISION. TH IS INDEED IS THE RATIO DECIDENDI. 167. THEN, MAVILAYI APPLIED THE ABOVE PRINCIPLE AND HELD THAT THE RATIO DECIDENDI IN CITIZEN COOPERATIVE WOULD NOT DEPEND UPON THE CONCLUSION ARRIVED AT ON FACTS IN THAT CASE. FOR THE CASE IS AN AU THORITY FOR WHA F IT ACTUALLY DECIDES IN LAW AND NOT FOR WHAT MAY SEEM TO LOGICALLY FOLLOW FROM IT. DO GOA DOURADO PROMOTIONS AND KAUSHALYA CONFLICT? 168. AS WE HAVE SEEN GOA DOURADO PROMOTIONS CONCLUDE S THE CASE BASED ON THE REASONING GIVEN IN TAX APPEAL NO. 24/2019 (DECID ED ON 11-11-2019), SAMSON PERINCHERRY, AND NEW ERA SOVA MINE. 169. THE TAX APPEAL NO. 24/2019, DECIDED ON 11-11-2 019, RELATES TO THE PRINCIPAL COMMISSIONER OF INCOME-TAX (CENTRAL) V. GOA COASTAL RESORTS AND RECREATION PVT. LTD. IN THAT ONE, THE LEARNED DIVISION BENCH HAS HELD: - 6. BESIDES, WE NOTE THAT THE DIVISION BENCH OF THIS C OURT IN SAMSON(SUPRA) AS WELL AS IN NEW ERA SOVA MINE(SUPRA ) HAS HELD THAT THE NOTICE WHICH IS ISSUED TO THE ASSESSEE MUST INDICATE WHETHER THE ASSESSING OFFICER IS SATISFIED THAT THE CASE OF THE ASSE SSEE INVOLVES CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME OR BOTH, WITH CLARITY. IF THE NO TICE IS ISSUED IN THE PRINTED FORM, THEN THE NECESSARY PORTIONS WHICH ARE N OT APPLICABLE ARE REQUIRED TO BE STRUCK OFF, SO AS TO INDICATE WITH CLA RITY THE NATURE OF THE SATISFACTION RECORDED. IN BOTH SAMSON PERINCHERY A ND NEW ERA SOVA MINE, THE NOTICES ISSUED HAD NOT STRUCK OF THE PO RTION WHICH WERE INAPPLICABLE. FROM THIS, THE DIVISION BENCH CO NCLUDED THAT THERE WAS NO PROPER RECORD OF SATISFACTION OR PROPER APPLI CATION OF MIND IN A MATTER OF INITIATION OF PENALTY PROCEEDINGS. 7. IN THE PRESENT CASE, AS WELL IF THE NOTICE DATED 30 /09/16 (AT PAGE 33) IS PERUSED, IT IS APPARENT THAT THE RELEVANT PORTION S HAVE NOT BEEN STRUCK OFF. THIS COUPLED WITH THE FACT ADVERTED TO IN PA RAGRAPH (5) OF THIS ORDER, LEAVES NO GROUND FOR INTERFERENCE WITH TH E IMPUGNED ORDER. THE IMPUGNED ORDERS ARE QUITE CONSISTENT BY THE LAW LAID DOWN IN THE CASE OF SAMSON PERINCHERY AND NEW ERA SOVA MINE AND THEREFORE, WARRANT NO INTERFERENCE. 170. SAMSON PERINCHERY, TOO, HAS HELD THAT THE NOTICE I SSUED UNDER SECTION 274 OF THE ACT SHOULD STRIKE OFF IRRELEVANT CLAUSES. AN D NEW ERA SOVA MINE HAS ENDORSED THE TRIBUNAL'S VIEW THAT 'THE PENALTY NOTI CES IN THESE CASES WERE NOT ISSUED FOR ANY SPECIFIC CHARGE, THAT IS TO S AY, FOR CONCEALMENT OF PREITY ZINTA 8 PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PA RTICULARS'. IN FACT, SAMSON PERINCHERRY RELIES ON KARNATAKA HIGH COURT'S SSA'S EMERALD MEADOWS, WHICH, AS WE HAVE ALREADY SEEN, HAS FOLLOW ED MANJUNATHA. SO, IN A SENSE, IT IS A CONFLICT BETWEEN KAUSHALYA AND MANJUNA THA IF WE TAKE COMITY, RATHER THAN STARE DECISIS, AS THE RECKONING FACTOR. 171. THAT SAID, AS MAVILAYI FOUND DISTINGUISHING FEAT URES IN CITIZEN COOPERATIVE; HERE, TOO, THE FACT SITUATION AS OBTAINED I N KAUSHALYA HAS BEEN SEEN IN NONE OF THESE DECISIONS: GOA DOURADO PROMOT IONS, GOA COASTAL RESORTS AND RECREATION, SAMSON PERINCHERY, NEW ERA SOVA MINENOT EVEN IN MANJUNATHA POINTED, IN BOTH SETS OF CASES, THE PROP OSITION IS THIS: TO AN ASSESSEE FACING PENALTY PROCEEDINGS, THE REVENUE MUS T SUPPLY COMPLETE, UNAMBIGUOUS INFORMATION SO THAT HE MAY DEFEND HIMSELF EFFECTUALLY. THIS PROPOSITION HAS GIVEN RISE TO THIS QUESTION: WHERE SHO ULD THE ASSESSEE GATHER THE REQUIRED INFORMATION FROM? 172. GOA DOURADO PROMOTIONS AND OTHER CASES HAVE HELD THAT THE INFORMATION MUST BE-GATHERED FROM THE NOTICE UNDER SECTION 271(L)(C) READ WITH SECTION 274 OF THE IT ACT. NO OTHER SOURCE WAS_I N_THE_COURTS CONTEMPLATION. IN KAUSHALYA, BOTH THE PROPOSITION AND THE QUESTION WERE THE SAME. BUT IT HAS ONE EXTRA INPUT: THE ORDER IN ASSESSM ENT PROCEEDINGS. SO IT HAS HELD THAT THE NOTICE ALONE IS NOT THE SOLE SOURCE OF INFORMATION THE ASSESSMENT PROCEEDINGS, TOO, MAY SHED LIGHT ON THE ISSU E AND INFORM THE ASSESSEE ON THE SCOPE OF PENALTY PROCEEDINGS. WHETHE R ASSESSMENT PROCEEDINGS CAN BE A SOURCE OF INFORMATION AND WHET HER IT CAN COMPLEMENT THE NOTICE HAVE NOT BEEN CONSIDERED IN GOA DOURADO PRO MOTIONS AND OTHER CASES. 173. WE, HOWEVER, ACCEPT THAT THE REVENUE, OFTEN, ADO PTS A PERNICIOUS PRACTICE OF SENDING AN OMNIBUS, CATCH-ALL, PRINTED NOTICE. IT CONTAINS BOTH RELEVANT AND IRRELEVANT INFORMATION. IT ASSUMES, PERH APS UNJUSTIFIABLY, THAT WHOEVER PAYS TAX IS OR MUST BE WELL-VERSED IN THE NUAN CES OF TAX LAW. SO IT SENDS A NOTICE WITHOUT SPECIFYING WHAT THE ASSESSEE, F ACING PENALTY PROCEEDINGS, MUST MEET. IN JUSTIFICATION OF WHAT IT OMITS TO DO, IT WILL ASK, RATHER EXPECT, THE ASSESSEE TO LOOK INTO PREVIOUS PROCE EDINGS FOR JUSTIFICATION OF ITS ACTION IN THE LATER PROCEEDINGS, WHICH ARE, UN DENIABLY, INDEPENDENT. IT FORGETS THAT A STITCH IN TIME SAVES NINE. ITS ONE CROSS O R TICK MARK CLEARS THE CLOUD, ENABLES THE ASSESSEE TO MOUNT AN EFFECTIVE DEF ENCE, AND, IN THE END, ITS DILIGENCE AVOIDS A LOAD OF LITIGATION. IS NOT PR EJUDICE WRIT LARGE ON THE FACE OF THE MECHANICAL METHODS THE REVENUE ADOPTS IN SENDI NG A STATUTORY NOTICE TO THE ASSESSEE UNDER SECTION 271 (1) (C) READ WITH SEC TION 274 OF THE ACT? PRAGMATICALLY SPEAKING, KAUSHALYA CASTS AN EXTRA BURDE N ON THE ASSESSEE AND ASSUMES EXPERTISE ON HIS PART. IT WANTS THE ASSESS EE TO MAKE UP FOR THE REVENUE'S LAPSES. EX POST AND EX ANTE APPROACHES OF ADJUDICATION: 174. IN EX-POST ADJUDICATION, THE COURT LOOKS BACK AT A DISASTER OR OTHER EVENT AFTER IT HAS OCCURRED AND DECIDES WHAT TO DO ABO UT IT OR HOW TO REMEDY IT. IN AN EX-ANTE ADJUDICATION, THE COURT LOOKS FORWAR D, AFTER AN EVENT OR PREITY ZINTA 9 INCIDENT, AND ASKS WHAT EFFECTS THE DECISION ABOUT THIS CASE WILL HAVE IN THE FUTURE - ON PARTIES WHO ARE ENTERING SIMILAR SITUATION S AND HAVE NOT YET DECIDED WHAT TO DO, AND WHOSE CHOICES MAY BE INFLUENC ED BY THE CONSEQUENCES THE LAW SAYS WILL FOLLOW FROM THEM. THE FIRST PERSPECTIVE ALSO MIGHT BE CALLED STATIC SINCE IT ACCEPTS THE PARTIES' POSI TIONS AS GIVEN AND FIXED; THE SECOND PERSPECTIVE IS DYNAMIC SINCE IT ASS UMES THEIR BEHAVIOUR MAY CHANGE IN RESPONSE TO WHAT OTHERS DO, INCLUDING J UDGES, (FOR A DETAILED DISCUSSION, SEE WARD FARNSWORTH'S LEGAL ANALYST: A T OOLKIT FOR THINKING ABOUT THE LAW). 175. KAUSHALYA HAS ADOPTED AN EX-POST APPROACH TO TH E ISSUE RESOLUTION; GOA DOURADO PROMOTIONS, AN EX-ANTE APPROACH. KAUSHA FYA SAVES ONE SINGLE CASE FROM FURTHER LITIGATION. IT ASKS THE ASSESSEE TO L OOK BACK AND GATHER ANSWERS FROM WHATEVER SOURCE HE MAY FIND, SAY, THE A SSESSMENT ORDER. ON THE OTHER HAND, GOA DOURADO PROMOTIONS SAVES EVERY OTHE R CASE FROM LITIGATION. IT COMPELS THE REVENUE TO BE CLEAR AND CE RTAIN. TO BE MORE SPECIFIC, WE MAY NOTE THAT IF WE ADOPT KAUSHALYA'S APPROACH TO THE ISSUE, IT REQUIRES THE ASSESSEE TO LOOK FOR THE PRECISE CHARGE IN THE PENA LTY PROCEEDINGS NOT ONLY FROM THE STATUTORY NOTE BUT FROM EVERY OTHER SOURCE OF INFORMATION, SUCH AS THE ASSESSMENT PROCEEDINGS. THAT SAID, FIRST, PENAL TY PROCEEDINGS MAY ORIGINATE FROM THE ASSESSMENT PROCEEDINGS, BUT THEY AR E INDEPENDENT; THEY DO NOT DEPEND ON THE ASSESSMENT PROCEEDING FOR THEIR OUTCOME. ASSESSMENT PROCEEDINGS HARDLY INFLUENCE THE PENALTY PROCEEDINGS , FOR ASSESSMENT DOES NOT AUTOMATICALLY LEAD TO A PENALTY. 176. SECOND, NOT ALWAYS DO WE FIND THE ASSESSMENT PR OCEEDINGS REVEALING THE GROUNDS OF PENALTY PROCEEDINGS. ASSESSMENT ORDER NEE D NOT CONTAIN A SPECIFIC, EXPLICIT OF WHETHER THE CONDITIONS MENTIO NED IN SECTION 271(L)(C) EXIST IN THE CASE. IT IS BECAUSE EXPLANATION 1(A) AND 1(B), AS THE DEEMING PROVISIONS, CREATE A LEGAL FICTION AS TO THE GROUNDS F OR PENALTY PROCEEDINGS. INDEED, THE APEX COURT IN CIT V. ATU MOHAN BINDA [200 9]317 ITR 1 (SC) HAS EXPLAINED THE-SCOPE OF SECTION 271(L)(C) THUS: 'EXPLANATION 1, APPENDED TO SECTION 27(1) PROVIDES TH AT IF THAT PERSON FAILS TO OFFER AN EXPLANATION OR THE EXPLANATION OFFERE D BY SUCH PERSON IS FOUND TO BE FALSE, OR THE EXPLANATION OFFERED BY HIM IS NOT SUBSTANTIATED, AND HE FAILS TO PROVE THAT SUCH EXPLANA TION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIA L TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, FOR THE PURPOSES OF SECTION 271(L)(C), THE AMOUNT ADDED OR D ISALLOWED IN COMPUTING THE TOTAL INCOME IS DEEMED TO REPRESENT THE CONC EALED INCOME. 177. THAT IS, EVEN IF THE ASSESSMENT ORDER DOES NOT C ONTAIN A SPECIFIC FINDING THAT THE ASSESSEE HAS CONCEALED INCOME OR HE IS DEEMED TO HAVE CONCEALED INCOME BECAUSE OF THE EXISTENCE OF FACTS WHICH ARE SE T OUT IN EXPLANATION 7, IF A MERE DIRECTION TO INITIATE PENALTY PROCEEDINGS UN DER CLAUSE (C) OF SUB- SECTION (1) IS FOUND IN THE SAID ORDER, BY LEGAL FIC TION, IT SHALL BE DEEMED TO CONSTITUTE SATISFACTION OF THE ASSESSING OFFICER FOR IN ITIATION OF PENALTY PROCEEDINGS UNDER THE SAID CLAUSE (C). IN OTHER WORD S, THE ASSESSING OFFICER'S PREITY ZINTA 10 SATISFACTION AS TO BE SPELT OUT IN THE ASSESSMENT ORDER IS ONLY PRIMA FACIE. EVEN IF THE ASSESSMENT ORDER GIVES NO REASON, A MERE DIRECTION FOR PENALTY PROCEEDINGS TRIGGERS THE LEGAL FICTION AS CONTAINED I N THE EXPLANATION (1). 178. THEREFORE, IN EVERY INSTANCE, IT IS A QUESTION O F INFERENCE WHETHER THE ASSESSMENT ORDER CONTAINED ANY GROUNDS FOR INITIATING THE PENALTY PROCEEDINGS. THEN, WHENEVER THE NOTICE IS VAGUE OR I MPRECISE, THE ASSESSEE ASSAILS IT AS BAD; THE REVENUE DEFENDS IT BY SAYING TH AT THE ASSESSMENT ORDER CONTAINS THE PRECISE CHARGE. THUS, IT BECOMES A MATT ER OF ADJUDICATION, OPENING LITIGIOUS FLOODGATES. THE SOLUTION IS A TICK MARK IN THE PRINTED NOTICE THE REVENUE IS USED TO SERVING ON THE ASSESSEES. 179. BESIDES, THE PRIMA FACIE OPINION IN THE ASSESSME NT ORDER NEED NOT ALWAYS TRANSLATE INTO ACTUAL PENALTY PROCEEDINGS. THE SE PROCEEDINGS, IN FACT, COMMENCE WITH THE STATUTORY NOTICE UNDER SECTION 271(L )(C) READ WITH SECTION 274. AGAIN, WHETHER THIS PRIMA FACIE OPINION IS SUFFI CIENT 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 UNCERTAI NTY. 180. ONE COURSE OF ACTION BEFORE US IS CURING A DEFE CT IN THE NOTICE BY REFERRING TO THE ASSESSMENT ORDER, WHICH MAY OR MAY N OT CONTAIN REASONS FOR THE PENALTY PROCEEDINGS. THE OTHER COURSE OF ACTION IS THE PREVENTION OF DEFECT IN THE NOTICEAND THAT PREVENTION TAKES JUST A TICK MA RK. PRUDENCE DEMANDS PREVENTION IS BETTER THAN CURE. ANSWERS: QUESTION NO. 1: IF THE ASSESSMENT ORDER CLEARLY RECO RDS SATISFACTION FOR IMPOSING PENALTY ON ONE OR THE OTHER, OR BOTH GROUNDS MENTIONED IN SECTION 271(L)(C), DOES A MERE DEFECT IN THE NOTICENOT STRIKIN G OFF THE IRRELEVANT MATTERVITIATE THE PENALTY PROCEEDINGS? 181. IT DOES. THE PRIMARY BURDEN LIES ON THE REVENUE. IN THE ASSESSMENT PROCEEDINGS, IT FORMS AN OPINION, PRIMA FACIE OR OTHE RWISE, TO LAUNCH PENALTY PROCEEDINGS AGAINST THE ASSESSEE. BUT THAT TRANSLATES I NTO ACTION ONLY THROUGH THE STATUTORY NOTICE UNDER SECTION 271(L)(C), RE AD WITH SECTION 274 OF IT ACT. TRUE THE ASSESSMENT PROCEEDINGS FORM THE BASI S FOR THE PENALTY PROCEEDINGS, BUT THEY ARE NOT COMPOSITE PROCEEDING TO D RAW STRENGTH FROM EACH OTHER. NOR CAN EACH CURE THE OTHER'S DEFECT. A PE NALTY PROCEEDING IS A COROLLARY; NEVERTHELESS, IT MUST STAND ON ITS OWN. THESE PROCEEDI NGS CULMINATE UNDER A DIFFERENT STATUTORY SCHEME THAT REMAINS DISTINCT FROM THE ASSESSMENT PROCEEDINGS. THEREFORE, THE ASSESSEE MUS T BE INFORMED OF THE GROUNDS OF THE PENALTY PROCEEDINGS ONLY THROUGH STATU TORY NOTICE. AN OMNIBUS NOTICE SUFFERS FROM THE VICE OF, VAGUENESS. 182. MORE PARTICULARLY, A PENAL PROVISION, EVEN WITH CIVIL CONSEQUENCES, MUST BE CONSTRUED STRICTLY. AND AMBIGUITY, IF ANY, MUST BE RESOLVED IN THE AFFEC TED ASSESSEE'S FAVOUR. 183. THEREFORE, WE ANSWER THE FIRST QUESTION TO THE EFF ECT THAT GOA DOURADO PROMOTIONS AND OTHER CASES HAVE ADOPTED AN APPROACH MORE IN CONSONANCE PREITY ZINTA 11 WITH THE STATUTORY SCHEME. THAT MEANS WE MUST HOLD THAT K AUSHALYA DOES NOT LAY DOWN THE CORRECT PROPOSITION OF LAW. QUESTION NO. 2: HAS KAUSHALYA FAILED TO DISCUSS THE ASPECT OF PREJUDICE'? 184. INDEED, KAUSHALYA DID DISCUSS THE ASPECT OF PREJ UDICE. AS WE HAVE ALREADY NOTED, KAUSHALYA NOTED THAT THE ASSESSMENT ORDE RS ALREADY CONTAINED THE REASONS WHY PENALTY SHOULD BE INITIATED . SO, THE ASSESSEE, STRESSES KAUSHALYA, 'FULLY KNEW IN DETAIL THE EXACT CH ARGE OF THE REVENUE AGAINST HIM'. FOR KAUSHALYA, THE STATUTORY NOTICE SUFFERE D 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 HEA RD'. 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 FOLLOWED'. KAUS HALYA CLOSES 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 A ND AMBIGUITY IN THE NOTICE CAN DEMONSTRATE NON-APPLICATION OF MIND BY THE A UTHORITY AND/OR ULTIMATE PREJUDICE TO THE RIGHT OF OPPORTUNITY OF HEARIN G CONTEMPLATED UNDER SECT7ORT274. SO ASSERTS KAUSHALYA. IN FACT, FOR ONE ASSESSMENT YEAR, IT SET ASIDE THE PENALTY PROCEEDINGS ON THE GROUNDS OF NON-A PPLICATION OF MIND AND PREJUDICE. 186. THAT SAID, REGARDING THE OTHER ASSESSMENT YEAR, IT REASONS THAT THE ASSESSMENT ORDER, CONTAINING THE REASONS OR JUSTIFICA TION, AVOIDS PREJUDICE TO THE ASSESSEE. THAT IS WHERE, WE RECKON, THE REASONING SUFFERS. KAUSHALYA'S INSISTENCE THAT THE PREVIOUS PROCEEDINGS SUPPLY JUSTIF ICATION AND CURE THE DEFECT IN PENALTY PROCEEDINGS HAS NOT MET OUR ACCEPTAN CE. 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 I S OF 'SOME SIGNIFICANCE THAT IN THE STANDARD PRO-FORMA USED BY THE ASSESSING OFF ICER IN ISSUING A NOTICE DESPITE THE FACT THAT THE SAME POSTULATES THAT INAPP ROPRIATE WORDS AND PARAGRAPHS WERE TO BE DELETED, BUT THE SAME HAD NOT B EEN DONE'. THEN, DILIP N. SHROFF, ON FACTS, HAS FELT THAT THE ASSESSING OFFIC ER HIMSELF WAS NOT SURE WHETHER HE HAD PROCEEDED ON THE BASIS THAT THE ASSESS EE HAD CONCEALED HIS INCOME OR HE HAD FURNISHED INACCURATE PARTICULARS. 188. WE MAY, IN THIS CONTEXT, RESPECTFULLY OBSERVE THAT A CONTRAVENTION OF A MANDATORY CONDITION OR REQUIREMENT FOR A COMMUNICATION TO BE VALID COMMUNICATION IS FATAL, WITH NO FURTHER PROOF. THAT SAI D, EVEN IF THE NOTICE CONTAINS NO CAVEAT THAT THE INAPPLICABLE PORTION BE DELE TED, IT IS IN THE INTEREST OF FAIRNESS AND JUSTICE THAT THE NOTICE MUST B E PRECISE, IT SHOULD GIVE PREITY ZINTA 12 NO ROOM FOR AMBIGUITY. THEREFORE, DILIP N. SHROFF D ISAPPROVES OF THE ROUTINE, RITUALISTIC PRACTICE OF ISSUING OMNIBUS SHOW-CAUSE NOTICES. THAT PRACTICE CERTAINLY BETRAYS NON- APPLICATION OF MIND AND, THER EFORE, THE INFRACTION OF A MANDATORY PROCEDURE LEADING TO PENAL CONSEQUENCES ASS UMES OR IMPLIES PREJUDICE. 189. IN SUDHIR KUMAR SINGH, THE SUPREME COURT HAS EN CAPSULATED THE PRINCIPLES OF PREJUDICE. ONE OF THE PRINCIPLES IS T HAT 'WHERE PROCEDURAL AND/OR SUBSTANTIVE PROVISIONS OF LAW EMBODY THE PRINC IPLES OF NATURAL JUSTICE, THEIR INFRACTION PER SE DOES NOT LEAD TO INVALI DITY 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 ONL Y IN INDIVIDUAL INTEREST BUT ALSO IN THE PUBLIC INTEREST'. 190. HERE, SECTION 271(L)(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 [(2007) 2 SCC 181], IN WHICH THE APEX C OURT HAS QUOTED WITH APPROVAL ITS EARLIER JUDGMENT IN STATE OF ORISSA V. D R. BINAPANI DEI [AIR 1967 SC 1269]. ACCORDING TO IT, WHEN BY REASON OF ACTION ON THE PART OF A STATUTORY AUTHORITY, CIVIL OR EVIL CONSEQUENCES ENSUE, PRINCIP LES OF NATURAL JUSTICE MUST BE FOLLOWED. IN SUCH AN EVENT, ALTHOUGH NO EXPRESS P ROVISION IS LAID DOWN ON THIS BEHALF, COMPLIANCE WITH PRINCIPLES OF NATURAL JUS TICE WOULD BE IMPLICIT. IF A STATUE CONTRAVENES THE PRINCIPLES OF NATURAL JUSTICE, IT MAY ALSO BE HELD ULTRA VIRES ARTICLE 14 OF THE CONSTITUTION. 191. AS A RESULT, WE HOLD THAT DILIP N. SHROFF TREAT S OMNIBUS SHOW-CAUSE NOTICES AS BETRAYING NON-APPLICATION OF MIND AND DISA PPROVES OF THE PRACTICE, TO BE PARTICULAR, OF ISSUING NOTICES IN PRINTED FORM W ITHOUT DELETING OR STRIKING OFF THE INAPPLICABLE PARTS OF THAT GENERIC NOTI CE. 13. EXAMINING THE PRESENT CASE ON THE ANVIL OF AFOR ESAID CASE LAW, WE FIND THAT THE NOTICE IN THIS ALSO IS AN OMNIBUS SHOW-CAU SE NOTICE AS IT DOES NOT STRIKE OFF/DELETE THE INAPPROPRIATE/IRRELEVANT/NOT APPLICABLE PORTION. SUCH A GENERIC NOTICE BETRAYS A NON-APPLICATION OF MIND. H ENCE, THE PENALTY LEVIED PURSUANT TO SUCH A NOTICE IS NOT LEGALLY SUSTAINABL E IN LAW. HENCE FOLLOWING THE AFORESAID PRECEDENT FROM THE FULL BENCH OF THE HON' BLE JURISDICTIONAL HIGH COURT WE HOLD THAT THE ASSESSING OFFICER WAS BEREFT OF VALID JURISDICTION AS THE NOTICE ISSUED TO ASSESSEE IS UNSUSTAINABLE IN LAW. HENCE, THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT IS LIABLE TO BE DELETED. WE DIRECT AS SUCH. PREITY ZINTA 13 SINCE WE HAVE HELD THAT THE PENALTY ORDER IS LIABLE TO BE QUASHED FOR LACK OF A VALID NOTICE, THE ADJUDICATION ON MERIT IS NOW ONLY OF ACADEMIC INTEREST. HENCE, WE ARE NOT ENGAGING INTO THE SAME. 14. IN THE RESULT, ASSESSEES CROSS OBJECTION IS AL LOWED AND REVENUES APPEAL IS TREATED AS INFRUCTUOUS. PRONOUNCED IN THE OPEN COURT ON 3.9.2021. SD/- SD/- (JUSTICE P.P. BHATT) (SHAMI M YAHYA) PRESIDENT ACCOUNTANT ME MBER MUMBAI; DATED : 03/09/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI