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2023 (4) TMI 285 - ITAT DELHILevy of penalty u/s 271(1)(c) - Defective notice u/s 274 - initiation of penalty is one limb and the levy of penalty is on other limb - HELD THAT:- In the penalty order passed AO has levied the penalty for concealment of income. It is a settled law that while levying penalty the AO has to record satisfaction and thereafter come to a finding in respect of one of the limbs, which is specified under section 271(1)(c) - The first step is to record satisfaction while completing the assessment as to whether the assessee had concealed the income or furnished inaccurate particulars of income. Notice u/s 274 read with Section 271(l)(c) of the Act is to be issued to the assessee. AO thereafter has to levy penalty u/s 271(1)(c) for non-satisfaction of either of the limbs. While completing the assessment, the AO has to come to a finding as to whether the assessee has concealed the income or furnished inaccurate particulars of income. As in CIT vs. Samson Perinchery [2017 (1) TMI 1292 - BOMBAY HIGH COURT] has held that where initiation of penalty is one limb and the levy of penalty is on other limb, then in the absence of proper show cause notice to the assessee, there is no merit in levy of penalty. We are of the view that in the present case, the basic condition for levy of penalty has not been fulfilled and that the penalty order suffers from non-exercising of jurisdiction power of AO. Appeal of assessee allowed.
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