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2023 (4) TMI 398 - KARNATAKA HIGH COURTPenalty u/s 271(1)(c) - Defective notice u/s 274 - satisfaction of existence of ground under Section 271(1)(c) - assessee failed to disclose income under the head Income from Other Sources in the return of income filed - HELD THAT:- A combined reading of the authorities in Dilip Shroff [2007 (5) TMI 198 - SUPREME COURT] and Manjunatha Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] leads us to an inference that the satisfaction of existence of ground u/s 271(1)(c) is the sine qua non for initiation of proceedings and the penalty proceedings should be confined only to those grounds specifically stated in the notice. As recorded hereinabove, AO had issued notice only with regard to furnishing in accurate particulars. Whereas the satisfaction recorded is with regard to concealment of income particulars and the very ground has been struck-off. The notice has been issued on the specific premise that assessee had furnished inaccurate particulars of income. We are of the view that the penalty order is not sustainable in law. Decided in favour of assessee.
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