Section 271(1)(c) : Penalty – Notice must be precise and there should be no room for ambiguity – Veena Estate (P.) Ltd. (Bom) distinguished.

6. Pr. Commissioner of Income Tax- 2, Thane vs. Pacific Organics Pvt. Ltd., [ITXA No. 58 OF 2020, Dated: 29/04/2025 (Bom) (HC)]

Section 271(1)(c) : Penalty – Notice must be precise and there should be no room for ambiguity - Veena Estate (P.) Ltd. (Bom) distinguished.

The ITAT held that the penalty show cause notice was ambiguous, as the relevant portions were not ticked, or the irrelevant portions were not struck off.

The Hon. Court referred to the Full Bench decision, in the case of Mohd. Farhan A. Shaikh vs. Deputy Commissioner of Income Tax, Central Circle 1, Belgaum [2021] 125 taxmann.com 253 (Bombay), wherein it was held that if the notice contains no caveat that the inapplicable portion was to be deleted, any action based on such notice would be inferred. The Full Bench held that the notice must be precise and there should be no room for ambiguity.

The tax department relied upon Veena Estate (P.) Ltd. vs. Commissioner of Income-tax [2024] 158 taxmann.com 341 (Bombay) wherein, the Appellant-Assessee, who had never raised any ground about the ambiguity of the notice before the Assessing Officer, Appellate Authority and ITAT, attempted to raise such a ground for the first time in an Appeal under Section 260-A of the Income Tax Act, 1961. This was not allowed b