Case Law Details
Mohd. Farhan A. Shaikh Vs DCIT (Bombay High Court)
Conclusion: In present facts of the case, the Larger Bench of the Hon’ble High Court was referred an issue ‘mere failure to tick mark the applicable grounds’ in the notice issued under Section 271 of the Income Tax Act, 1961 (IT Act) vitiate the entire penalty proceedings. To this, it was held that a penal provision even with civil consequences, must be construed strictly. And ambiguity, if any, must be resolved in the affected assessee’s favour.
Held:
In present facts of the case, there was direct conflict between The Principal Commissioner of Income-Tax, Panaji v. Goa Dourado Promotions Pvt. Ltd., TXA No.18/2019 dtd. 26.11.2019 and Commissioner of Income-Tax v. Smt. Kaushalya 216 ITR 660 (Bombay).
Besides, the Division Bench has also referred two more aspects: (a) “the impact of non-discussion on the aspect of ‘prejudice’ in the [first set of decisions]”; (b) and “the effect of the decision of the Hon’ble Supreme Court in case of Dilip N. Shroff v. Joint Commissioner of Income-Tax, (2007) 291 ITR 519 (SC) on the issue of non-application of mind where the relevant portions of the printed notices are not struck off ”.
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