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2017 (8) TMI 1468 - AT - Income TaxPenalty u/s 271AAA - non-payment of all the due of taxes and interest thereupon, till the finalization of penalty proceedings - non-compliance of the contention laid down in clause (iii) of sub-section (2) of section 271AAA - time limit is prescribed for payment of tax and interest thereupon - Held that:- Admittedly, in this case also the assessee had also deposited tax due along with interest. Since no time limit has been prescribed for deposit of such dues and even, as discussed above, there was no overt act on the part of the assessee to avoid taxes, as his request for deposit of taxes through instalments has been accepted and the assessee has already tendered post-dated cheques before the conclusion of the penalty, hence, in the light of the observations of the Hon'ble Supreme Court in the case of Gebilal Kanhialal HUF (2012 (9) TMI 297 - SUPREME COURT), in our view, the third condition of payment of taxes as per provisions of section 271AAA(2)(iii) of the Act stood complied with. AO has intended to initiate penalty proceedings u/s 271AAA(1) of the Act, however, the wording written in the body of the letter does not conform to the charges of the provisions of section 271AAA of the Act, rather, the assessee has been show caused on the charge of furnishing of inaccurate particulars of income, which falls under the scope and purview of section 271(1)(c) of the Act. The assessee, therefore, is not show caused for levy of penalty under the provisions of section 271AAA, rather for doing an act inviting penalty u/s 271(1)(c) of the Act, which otherwise is neither arising out of the facts of the case nor established against the assessee. Thus, the penalty proceedings conducted against the assessee u/s 271AAA of the Act were invalid at its very inception because of the defective and invalid show cause notice, rendering the entire penalty proceedings void ab initio. The penalty levied against the assessee is thus not sustainable - Decided in favour of assessee
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