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2019 (3) TMI 80 - AT - Income TaxPenalty u/s 271(1)(c) - non recording of satisfaction - addition u/s 40A(i)(a) - non specification of charge - Held that:-Initiation of penalty proceedings by the AO is valid only if the AO is satisfied in the course of any proceedings, that the Assessee has concealed the particulars of income or furnished inaccurate particulars of income. When this satisfaction for initiation of penalty proceedings u/s 271(1)(c) of IT Act is recorded by the AO in assessment order in respect of certain additions during the assessment proceedings; and not recorded in respect of certain other additions; it acts as a bar against levy of penalty U/s 271(1)(c) in respect of those additions in respect of which such satisfaction was not recorded in the assessment order or during the assessment proceedings. As regards the submission of the Assessee that the AO did not make specific charge against the Assessee in the notice u/s 271(1)(c) whether the penalty proceeding were for concealment of particulars of income or for furnishing of inaccurate particulars of income, this ground need not be adjudicated as we have already cancelled the penalty and this ground/contention is purely academic in view of our decision to cancel the penalty. When there is no valid initiation of penalty proceedings U/s 271(1)(c) of IT Act in respect of certain additions made in the assessment order; it is immaterial if the AO made specific charge against the Assessee: whether the penalty proceedings were for concealment of the particulars of income or for furnishing of inaccurate particulars of income.
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