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2018 (3) TMI 1797 - ITAT PUNELevy of penalty u/s. 271(1)(c) - LTCG claimed exempt in original return of income - defective notice - recording of satisfaction - HELD THAT:- The manner in which satisfaction has been recorded without specifying the charge and the perusal of order levying penalty clearly reveal that there was ambiguity in the mind of AO at the time of recording satisfaction, as well as, at the time of passing of the order levying penalty. No limb of section 271(1)(c) i.e. whether the penalty is being initiated for “concealment of particulars of income” or “furnishing inaccurate particulars of income” has been mentioned while recording satisfaction. Whereas, at the time of passing of the order levying penalty the AO has used both the expressions. The charge for levy of penalty u/s. 271(1)(c) has to be specifically conveyed to the assessee at the time of recording satisfaction otherwise, the principles of natural justice are offended. The assessee should know the charge which he has to meet while defending his case for levy of penalty. Thus, we are of considered view that the penalty proceedings suffer from element of vagueness at the time of satisfaction, and also at the time of passing of the order levying penalty u/s. 271(1)(c). Hence, the penalty proceedings are liable to be set aside. Since, the assessee has succeeded on the legal issue and the penalty has been set aside, deliberating on the merits of appeal by Department would be merely an academic exercise. Accordingly, the appeal of Revenue is dismissed.
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