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2019 (3) TMI 218 - AT - Income TaxPenalty u/s 271(1)(c) - undisclosed income according to the statement of the assessee u/s 132(4) - income for specified year - Right course of action is to invoke sec. 271AAA - HELD THAT:- Where the case of the AO is that income pertains to specified year as categorically observed in the assessment year as well as in the penalty order, the right course of action available to the AO is to invoke sec. 271AAA of the Act for the purposes of imposition of penalty on undisclosed income pertaining to specified year. The penalty has been invoked in the present case u/s 271(1)(c) of the Act which is not sync with the scheme of the Act. Explanation 5A to section 271(1)(c) enables imposition of penalty for a period other than ‘specified previous year’ contemplated under s. 271AAA. Therefore the satisfaction of the AO qua a wrong section for the purposes of penalty of strict nature is clearly no satisfaction in the eyes of law. The whole action of the AO carried under s. 271(1)(c) is thus vitiated and a nullity in law. In the backdrop of these observations we do not consider it expedient to examine any other aspect of the matter. The entire proceedings is bad in law at the threshold. The penalty imposed under s. 271(1)(c) of the Act is thus no sustainable in law. - Decided in favour of assessee.
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