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2017 (5) TMI 675 - AT - Income TaxPenalty levied under section 271AAB - notice has been issued under section 271(1)(c) of the Act and no show-cause notice has been issued under section 271AAB - denial of natural justice - Held that:- It appears that the notice in this case has been issued by the Assessing Officer just for the sake of providing the opportunity but this opportunity cannot be regarded to be a proper opportunity. We also noted that opportunity of being heard has been given to the assessee only in respect of the proceedings initiated under section 271(1)(c) of the Act. No opportunity has been given to the assessee in respect of the penalty to be levied under section 271AAB of the Act. On this basis also, the order passed by the Assessing Officer is against the principles of natural justice of providing the proper opportunity to the assessee and accordingly we quash the order of the Assessing Officer. We have also gone through the provisions of section271AAB and noted that this section specifies three different situations under which the penalty can be imposed on the assessee under different clauses (a), (b) and (c), the penalty has to be imposed on different rate. AO has not specified in the notice in respect of which clause the penalty is going to be levied on the assessee. On this basis also, in our opinion, the penalty cannot be sustained. We further noted that the provisions of section 271AAB are not mandatory which means that the penalty has to be levied in each and every case wherever the assessee has made default as stated under clauses (a), (b) and (c) of the Act. Sub-section (1) of section 271AAB uses the word "may" not "shall". "May" cannot be equated with "shall" especially in penalty proceedings. Using the word "may", in our opinion, gives a discretion to the Assessing Officer to levy the penalty or not to levy, even if the assessee has made the default under the said provision. In view of the aforesaid discussion, we set aside the order of the Commissioner of Income-tax (Appeals) and delete the penalty levied on the assessee. - Decided in favour of assessee.
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