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2019 (2) TMI 156 - AT - Income TaxPenalty levied u/s.271(1)(c) - defective notice - whether AO has initiated penalty proceedings for concealment of particulars of income or for furnished inaccurate particulars? - Held that:- Validity of a notices issued under Section 274 r.w.s. 271 of the Act goes to the root of the jurisdiction to levy a penalty under Section 271 (1) (c) of the Act and can therefore be considered at any stage of the appellate proceedings. Notice issued to the assessee under these Sections, for all the years are typically worded for both the assessees and that for assessment year 2006-07. Guilty of both concealment of income as well as furnishing of inaccurate particulars of income. However, a reading of the above notice clearly show that the word used for linking the two portions is "or" and not "and". An assessee in our opinion has every right to know which alleged default he has to explain. If it is both, it is necessary to mention so, in the notice. Without knowing what is default for which he is being charged, an assessee cannot give explanation. Notice issued by the Assessing Officer under Section 274 read with Section 271(l)(c) to be bad in law as it did not specify which limb of Section 271(l)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013 (7) TMI 620 - KARNATAKA HIGH COURT) - Decided in favour of assessee.
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