Smt Viola Rosaline Fernandes, Arossim V. Deputy Commissioner of Income Tax, Central Circle, Panaji

ITSSA 71/PAN/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4442 (ITAT-PANAJI)
• Duration Of Justice: 3 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: WT(D)
• Assessment Year: 2009-2010
• Appeal Filed On: 24-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRINIVAS NAYAK
• Keywords: Principle of natural justice; Question of law
• Section: 271(1)(c); 250; 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER & SHRI ANIKESH BANERJEE, JUDICIAL MEMBER I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes H No. 143/J, Ground Floor Mafilo Residency Cansaulim, Arossim Salcete Goa [PAN: AAUPF8976G] (Appellant) Vs. Deputy Commissioner of Income Tax, Central Circle, Panaji (Respondent) Appellant by Shri Shrinivas Nayak, C.A. & Shri N.N. Lotlikar, C.A., Respondent by Shri Manoj Joshi, CIT D/R Date of Hearing 06.04.2022 Date of Pronouncement 06.05.2022 ORDER Per Bench: These captioned appeals are filed against the separate orders of the Learned Commissioner of Income Tax (Appeals)- 2, Panaji, [hereinafter the “ld. CIT(A)] passed u/s 250 of the Act (hereinafter the “Act”), for the Assessment Years 2008-09 to 2014-15, challenging the action of the ld. CIT(A) in confirming the penalty imposed by the ld. Assessing Officer u/s 271(1)(c) of the Act. As the issues involved in all these appeals are identical, they are heard together and are being disposed off by way of this common order. 2. The common effective ground of appeal which goes to the very crux of the matter raised for all the impugned assessment years is extracted for ready reference:- “2. The Ld. AO has erred in issuing notice under section 274 read with section 271(1)(c) of the Income Tax Act, 1961, without specifying the limb of section 271(1)(c) of the Act, 1961, the penalty proceedings had been initiated i.e., whether concealment of particulars of income or furnishing of inaccurate particulars.” 3. The sole issue raised by the ld. Counsel for the assessee in all these appeals is the preliminary objection challenging the penalty imposed u/s 271(1)(c) on the ground I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes 2 that the notice issued initiating the penalty proceedings being defective, the penalty imposed in pursuance of such defective notice is not sustainable in law. He has placed on record, a copy of the said notices issued by the A.O. u/s 271(1)(C) of the Act, even dt. 31/03/2016, and pointed out that the irrelevant portion having been not struck off by the A.O. in the said notices, the exact charge/s against the assessee as to whether he concealed the particulars of his income or furnishing inaccurate particulars of such income was not clear. The notices for all the assessment years are extracted for ready reference:- P.T.O. I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes 3 I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes 4 I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes 5 I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes 6 I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes 7 I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes 8 I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes 9 I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes 10 4. The ld. Counsel for the assessee submitted that in the notice issued u/s 274 r.w.s. 271(1)(c) of the Act for the Assessment Year 2014-15 the DCIT, CC-Panaji, has stated that an order imposing penalty u/s 271AAB of the Act shall be passed. He submits that the same is not correct making the notice bad in law. The impugned notice is extracted for ready reference:- 5. The ld. Counsel for the assessee further relied on the following case-laws for the proposition that in cases where the charge on which the penalty has been levied has not been specified in the assessment order, as to whether the penalty has been levied for concealment of income or furnishing of inaccurate particulars of income with regard to the addition made by the A.O. followed by a notice for levy of penalty u/s 271(1)(c) in which the specific limb identifying the charge has not been identified I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes 11 makes the notice as well as the subsequent order levying the penalty as unsustainable and bad in law:- • CIT vs. SSA’s Emerald Meadows reported in (2016) 242 Taxman 180 (SC) • ACIT vs. Goa Dourado Promotions Pvt. Ltd. In ITA No. 276/Pan/2017 • CIT vs. Manjunatha Cotton & Ginning Factory reported in (2013) 359 ITR 565 4. We have heard rival submissions, perused the material available on record, the orders of the lower authorities as well as the case-law cited. After perusing the notices issued under section 274 r.w.s. 271(1)(c) for all the impugned assessment years, even dt. 31/03/2016, it is apparent that the irrelevant portion having been not struck off by the A.O. in the said notices and the exact charge/s against the assessee as to whether he concealed the particulars of his income or furnishing inaccurate particulars of such income was not clear. Even the notice for the assessment year renders to be bad in law as an penalty order u/s 271AAB has been warranted by the issuing authority. The Hon’ble Bombay High Court in the case of Mohd. Farhan A. Shaikh vs. DCIT reported in [2021] 125 taxmann.com 253 (Bombay) wherein a similar issue has been decided by the Hon’ble High Court by framing a question of law, and after taking into consideration, the relevant decision of various High Courts as well as the Hon’ble Apex Court, holding as under: “Question No. 3: What is effect of Supreme Court's decision in Dilip N. Shroff v. Jt. CIT [2007] 161 Taxman 218/291 ITR 519 (SC), on issue of non-application of mind when irrelevant portions of printed notices are not struck off ? ■ In Dilip N. Shroff, case (supra) 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, case (supra) 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 inaccurate particulars. [Para 187] ■ It may, in this context, be respectfully observed that a contravention of a mandatory condition or requirement for a communication to be valid communication is fatal, with no further proof. That said, even if the notice contains no caveat that the inapplicable portion be deleted, it is in the interest of fairness and justice that the notice must be precise. It should give no room for ambiguity. Therefore, Dilip N. Shroff case (supra) disapproves of the routine, ritualistic practice of issuing omnibus show-cause I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes 12 notices. That practice certainly betrays non- application of mind. And, therefore, the infraction of a mandatory procedure leading to penal consequences assumes or implies prejudice. [Para 188] ■ In State of U.P v. Sudhir Kumar Singh 2020 SCC Online SC 847 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'. [Para 189] ■ 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, Rajesh Kumar v. CIT [2007] 2 SCC 181, may be referred to in which the Apex Court has quoted with approval its earlier judgment in State of Orissa v. Dr. 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, 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 vires Article 14 of the Constitution. [Para 190] ■ As a result, it is held that Dilip N. Shroff Case (supra) treats omnibus show-cause notices as betraying non-application of mind and disapproves of the practice, to be particular, of issuing notices in printed form without deleting or striking off the inapplicable parts of that generic notice. [Para 191]" 5. In our opinion, the decision rendered by the Hon’ble Bombay High Court in the case of Mohd. Farhan A. Shaikh vs. DCIT (supra) is squarely applicable in the present case and even the Ld. DR has not disputed this aspect of the matter. We, therefore, respectfully following the said decision of the Hon’ble Bombay High Court quash the impugned penalty imposed by the Assessing Officer under section 271(1)(c) of the Act and confirmed by the Ld. CIT(A). 6. In the result, all these appeal of the assessee are allowed. Order pronounced in the open court on 06.05.2022 Sd/- Sd/- (Dr. M.L. Meena) (Anikesh Banerjee) Accountant Member Judicial Member SC, Sr.P.S. I.T(SS)A. Nos. 70 to 76/PAN/2018 Assessment Years: 2008-09 to 2014-15 Smt. Viola Rosaline Fernandes 13 Copy of the order forwarded to: (1)The Appellant:- (2) The Respondent :- (3) The CIT:- (4) The CIT (Appeals):- (5) The DR, I.T.A.T.:- True Copy By Order Sr. Private Secretary ITAT