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2013 (11) TMI 369 - AT - Income TaxNotice of penalty under wrong provision of Act – Penalty to be levied u/s 274 of the act for ‘furnishing of inaccurate particulars’ and the notice was issued for penalty u/s 271(1)(c) for concealment of Income – In this case, operation u/s 132 of the Act and the additional income was offered by the assessee and disclosed in the return in response to section 153A of the Act for all the assessment years under consideration - Held that:- Once the proceedings are initiated on one ground, the penalty should also be imposed on the same ground. Where the basis of the initiation of penalty proceedings is not identical with the ground on which the penalty was imposed, the imposition of penalty is not valid. The validity of the order of penalty must be determined with reference to the information, facts arid materials in the hands of the authority imposing the penalty at the time the order was passed and further discovery of facts subsequent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable. Concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujrat High Court in the case of MANU ENGINEERING reported in [1978 (9) TMI 18 - GUJARAT High Court] and the Delhi High Court in the case o VIRGO MARKETING reported in [2008 (1) TMI 15 - HIGH COURT, DELHI], has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind - Penalty should be clear as to the limb for which it is levied and the position being unclear here the penalty is not sustainable - Ground raised by the assessee should be allowed on technical grounds – Decided in favor of Assessee.
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