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2018 (11) TMI 692 - AT - Income TaxPenalty u/s.271(1)(c) - wrong claim of deduction u/s.80IA(4)(iv)(a) - Held that:- As evident that at the time of initiation of penalty proceedings in the assessment, AO held that penalty u/s.271(1)(c) is initiated for making wrong claim of deduction u/s.80IA(4)(iv)(a). But at the time of levying penalty qua in penalty order, AO held that the assessee has committed a default within the meaning of Explanation-1(B) to Section 271(1)(c) by furnishing inaccurate particulars of income by claiming wrong deduction of ₹ 64,88,107/-. Thus, this manner of recording of satisfaction suggests the existence of ambiguity with reference to applicability of specific limb. Therefore, we are of the opinion that considering the above referred binding judgments such penalty order is unsustainable in law legally. AO is under obligation to specify the correct limb at the time of initiation as well as at the time of levy of penalty. In view of the above deliberation on this issue, we are of the opinion that the penalty order is liable to be quashed on this legal issue. Thus, the order of CIT(A) is set-aside and direct the AO to delete the penalty. Accordingly, the legal grounds of appeal raised by the assessee are allowed on technicalities. In view of the same, we find, adjudication of the merits of penalty, become an academic exercise. Hence, merits-linked grounds are dismissed as such.
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