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2022 (10) TMI 1164 - HC - Income TaxPenalty levied u/s 271(1)(c) - defective notice u/s 274 - Whether as order of assessment,which was subject matter of challenge before this Court at the instance of the revenue was dismissed by judgment would automatically result in setting aside the order of penalty imposed on the assessee? - HELD THAT:- This issue was considered and answered by the Hon’ble Supreme Court in the case of K.C. Builders & Anr. vs. Assistant Commissioner of Income Tax [2004 (1) TMI 7 - SUPREME COURT] wherein the Hon’ble Supreme Court held that where additions made in the assessment order on the basis of which penalty for concealment was levied, are deleted, there remains no basis at all for levying the penalty for concealment and therefore in such a case no penalty can survive and the same is liable to be cancelled. The additions made in the assessment order have not been set aside and the order having been confirmed by this Court [2022 (7) TMI 1395 - CALCUTTA HIGH COURT] penalty proceedings cannot survive. That apart, the Hon’ble Supreme Court had examined the factual position and found that the notice issued under section 274 of the Act was defective and in this regard also noted the decision in the case of CIT vs. Manjunatha Cotton and Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] and allowed the assessee’s appeal and dismissed the revenue’s appeal.
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