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2018 (3) TMI 1591 - HC - Income TaxPenalty u/s 271(1)(c) - Held that:- The assessee, after service of notice u/s 271(1)(c) upon him, never objected to it alleging non application of mind by the AO and did not raise any question, going to its root, at the earliest or even before the Commissioner of Income Tax (Appeal). Even before ITAT while opposing the order, no such effort was made and orally the contentions based upon omission to strike down some part or portion in notice, not applicable in the matter, were raised. Thus, the fact that such an objection which should have been raised at the earliest, was not raised before the authority imposing penalty or then before CIT (A) or then in appeal memo, is lost sight of. The impact of failure to raise it “so”, is also not evaluated. The question whether such a ground needed to be taken at the first available opportunity, the impact of failure to so raise it, therefore, need to be answered in present matter. The perusal of order passed by the I.T.A.T. does not show consideration of this aspect. The other contentions which pertain to merits of the matter, therefore, need not be gone into and cannot be gone into by this Court in present appeal. In present facts when the I.T.A.T. has not looked into the effect of omission to raise such a contention at the first available opportunity, we are inclined to answer the question in favour of the revenue. Accordingly, we quash and set aside the order dated 30.06.2017 and restore Appeal back to file of I.T.A.T., Nagpur, for its fresh consideration in accordance with law. We give liberty to the respondent – assessee to raise his contentions on legality of notice under Section 271(1)(c) of the Income Tax Act by adding appropriate ground and grant liberty to the department to raise appropriate challenge thereto.
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