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2018 (4) TMI 1786 - AT - Income TaxPenalty u/s 271(1)(c) - defective notice - Addition u/s 68 - HELD THAT:- AO by not striking off the irrelevant default in the “Show cause‟ notice, had thus failed to clearly put the assessee to notice as regards the default for which penalty under Sec. 271(1)(c) was sought to be to be imposed on it. We thus in the backdrop of our aforesaid observations are of a strong conviction that as the A.O had clearly failed to discharge his statutory obligation of fairly putting the assessee to notice as regards the default for which it was being proceeded against, therefore, the penalty of ₹ 14,90,241/- imposed by him under Sec. 271(1)(c) clearly being in violation of the mandate of Sec. 274(1), thus cannot be sustained. We thus for the aforesaid reasons not being able to persuade ourselves to subscribe to the imposition of penalty by the A.O, therefore, set aside the order of the CIT(A) upholding the same. Even on merits failure on the part of the assessee to adduce necessary documentary evidence as was called for by the A.O to prove the creditworthiness of the donor to his satisfaction, would though in the backdrop of such unproved claim of the assessee justify addition of the same as an unexplained cash credit under Sec. 68, but however, in the absence of any material having been placed on record by the A.O on the basis of which the aforesaid claim of the assessee could be disproved, no penalty u/s 271(1)(c) could have been validly imposed in the hands of the assessee. though the assessee by failing to place on record the specific documentary evidence as was called for by the A.O to prove the credit worthiness of the donor, viz. Sh. Arun Jatia, had thus failed to prove his claim to the satisfaction of the A.O, but however, in the absence of any material having been placed on record by the A.O which could disprove the genuineness of the said claim of the assessee to the hilt, no penalty under Sec. 271(1)(c) could have been validly imposed in the hands of the assessee. We thus after deliberating at length on the merits of the case, not being able to persuade ourselves to subscribe to the views of the lower authorities, therefore, are of the considered view that the penalty imposed by the A.O under Sec.271(1)(c), which thereafter had been upheld by the CIT(A) cannot be sustained on merits and on the said count too is liable to be vacated. - Decided in favour of assessee.
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