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2017 (11) TMI 1048 - AT - Income TaxLevy of penalty under section 271(1)(c) - non application of mind by AO - Held that:- It is apparent from the documents on record that there is inconsistency with respect to charge for levy of penalty at all the three stages i.e.,(i) recording of satisfaction ;(ii) issuance of notice ; and(iii) levy of penalty. There is ambiguity in recording of satisfaction and notice issued for the levy of penalty under section 274 read with section 271(1)(c) of the Act. Since the charge for levy of penalty is not explicitly clear from the notice, the same is held to be bad in law and hence, the penalty proceedings are liable to be set aside on this ground alone. Since the additional ground raised by the assessee has been allowed, the grounds raised by the assessee challenging the levy of penalty on the merits have become academic and thus, are not dealt with. Levy of penalty by the Assessing Officer in a mechanical manner without proper application of mind is fatal. Ambiguity in the notice issued under section 274 read with section 271(1)(c) would itself vitiate the entire penalty proceedings. - Decided in favour of assessee.
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