Mere defect in the notice u/s 274 do not vitiates the penalty proceedings and no prejudice was caused to the assessee by non- marking of appropriate clause.
A perusal of quantum order reveals that the penalty was initiated for furnishing of inaccurate particulars and finally the same was levied on the same ground. We find that the assessee was issued two show cause notices- one in the standard printed form u/s 274 dated 04/03/2013 as placed on Page No.-86 of the paper book and another dated 27/08/2013 by way of letter as placed in Page No. 92 of the paper book. We find that in the first notice, the relevant clause has not been ticked off and the second notice is simply a show cause notice. However, in the quantum order Ld. AO, after due deliberations, clearly initiated the penalty proceedings for furnishing of inaccurate particulars which shows due application of mind qua penalty proceedings. The penalty was finally levied on the same ground as well. Therefore, mere marking of relevant clause, in our opinion, on the facts of the case, has not caused any prejudice to the assessee particularly when the assessee voluntarily offered certain additions in the quantum proceedings with a specific request to AO for not initiating the penalty against the same. The assessee very well knew the charges / grounds for which he was being penalised and he actively contested the penalty before the Ld. AO. At this juncture, we find that the provisions of Section 292B comes to the rescue of the revenue which cures minor defect in the various notices issued provided such notice in substance and effect was in conformity with the intent and purpose of the act. On overall facts and circumstances, we find that such condition was fulfilled in the instant case. We find that the revenue’s Special Leave Petition [SLP] dismissed by the Apex court in CIT Vs. SSA’S Emerald Meadows [supra] confirmed the decision of Honourable High court, which in turn, relied upon the judgement rendered in CIT Vs. Manjunatha Cotton & Ginning Factory [359 ITR 565]. The decision rendered by Honourable Bombay High court in CIT Vs. Samson Perinchery [supra] also placed the reliance on this judgement. After perusing the ratio of the judgement rendered in CIT Vs. Manjunatha Cotton & Ginning Factory [supra], we find that the assessee’s appeal was allowed by Hon’ble High court after considering the multiple factors and not solely on the basis of defect in notice u/s 274. Therefore, we are of the opinion that the penalty could not be deleted merely on the basis of defect pointed by the Ld. AR in the notice u/s 274. Therefore, we are of the opinion that the penalty could not be deleted merely on the basis of defect pointed by the Ld. AR in the notice and therefore, the legal grounds raised are rejected.
