M. Balaganesh ORDER
M. Balaganesh, Member (A)
1. This appeal in ITA No. 609/Del/2022 for AY 2015-16 arises out of the order of the Commissioner of Income Tax (Appeals)-26, New Delhi [hereinafter referred to as 'ld. CIT(A)', in short] in Appeal No. 10255/19-20 dated 10.12.2021 against the order u/s 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 27.06.2019 passed by the ld. Assessing Officer, Circle-2, Udaipur (hereinafter referred to as 'ld. AO').
2. The only effective issue to be decided in this appeal is as to whether the ld.CIT(A) was justified in confirming the levy of penalty u/s 271(1)(c) of the Act in the facts and circumstances of the instant case.
3. We have heard the rival submissions and perused the material available on record. At the outset, the ld. AR before us placed on record the copy of penalty notice issued u/s 274 r.w.s. 271(1)(c) the Act dated 10.12.2018, wherein the ld. AO had not struck off the relevant portion duly mentioning the specific offence committed by the assessee as to whether it has concealed the particulars of income or furnished inaccurate particulars of income. A specific ground to this effect is also raised by the assessee before us. In our considered opinion, when the penalty proceedings are sought to be initiated by the Revenue u/s 271(1)(c) of the Act, the specific ground which forms the foundation thereof have to be mentioned in clear and unambiguous terms. This is very much required in order to ensure that the assessee would have proper opportunity to meet the charges leveled by the ld. AO and put forth its defence. The penalty proceedings are penal in nature and, hence, the charge of offence should be specific, unequivocal and unambiguous. It is expected that the Revenue should either mention whether the assessee herein had concealed its particulars of income or furnished inaccurate particulars of income or committed both the offences. That is why in the show cause-notice prescribed for the penalty, these columns are specifically mentioned and the ld. AO is duly expected to strike off the irrelevant portion thereon. When the same is not done by the ld. AO in the show-cause notice, the said notice becomes defective and the entire penalty proceedings gets vitiated. This issue is no longer res integra in view of the Full Bench decision of the Hon'ble Bombay High Court in the case of Mohd. Farhan A. Shaikh vs. DCIT, reported in MANU/MH/0808/2021 : 280 Taxman 334. The relevant portion of this decision is reproduced hereunder:-
"184. Indeed, Smt. Kaushalya case (supra) did discuss the aspect of prejudice. As we have already noted, Kaushalya noted that the assessment orders already contained the reasons why penalty should be initiated. So, the assessee, stresses Kaushalya, "fully knew in detail the exact charge of the Revenue against him". For Kaushalya, 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 followed". Smt. Kaushalya case (supra) 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 and ambiguity in the notice can demonstrate non-applic........