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2019 (1) TMI 1573 - AT - Income TaxPenalty u/s.271(1)(c) - non specification of charge - disallowance made u/s.40(a)(ia) and stamp duty addition on issuance of shares - HELD THAT:- A notice issued u/s.274/271(1)(c) in which the AO has not mentioned the charge on which the penalty was proposed to be levied and the AO issued notice in a mechanical manner without application of mind - merit in the contention of the assessee that the penalty in the present facts of the case cannot be sustained as the assessee was deprived an opportunity to respond on the particular charge on which the penalty was to be levied. The case of the assessee is squarely covered by the decision of Manjunatha Cotton and Ginning Factory & Ors. [2013 (7) TMI 620 - KARNATAKA HIGH COURT] and the CIT Vs Samsaon Perincherry [2017 (1) TMI 1292 - BOMBAY HIGH COURT] in which it has been held that no penalty has to be levied where the AO has not stated in the notice issued u/s 271 r.w.s. 271(1)(c) one of the two limb on which the penalty is proposed to be levied. Even on merit the case of the assessee is squarely covered by the decision of CIT Vs. Reliance Petroproducts (P) Ltd. [2010 (3) TMI 80 - SUPREME COURT] wherein it has been stated that where the assessee has fully disclosed all the particulars of expenses in the return filed even though the claim of assessee is not correct, penalty cannot be imposed. In the present case before us the disallowance was made u/s.40(a)(ia) of the Act to ₹ 66,70,048/- and stamp duty on issuance of shares of ₹ 50,020/- aggregating to ₹ 66,70,048/- and penalty was on this additions. Even on merit the assessee has a strong case and the penalty cannot be sustained in any case. - Decided in favour of assessee.
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