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2019 (6) TMI 433 - AT - Income TaxPenalty u/s 271(1)(c) - non specification of exact charge viz. concealing the particulars of income or furnishing of inaccurate particulars of income - defective notice - Addition of contingent liability and assessee could not adduce any evidence to demonstrate that the debts became bad during the year - assessee has revised its computation of income during assessment proceedings on the basis of audited financial statements which has resulted into certain additions in the hands of the assessee - HELD THAT:-Explanation 1 is a deeming provision and is applicable only when an amount is added or disallowed in computation of total income which is deemed to represent the income in respect of which particulars have been concealed. Explanation 1 cannot be applied in a case where the assessee furnishes inaccurate particulars of income. Therefore, the action of AO in invoking the same for furnishing of inaccurate particulars of income would not stand the test of law. The facts of the present case would reveal that the penalty was initiated on the basis that the assessee has furnished inaccurate particulars of income whereas the penalty has finally been levied in terms of Explanation-1 on account of concealment of income. Keeping in view the above findings and reasoning, we hold that the impugned penalty could not be sustained under law since AO has failed to specify that the exact charge in the show-cause notice and secondly, the penalty has been invoked for one limb but finally levied on another limb, which is not in accordance with law. The perusal of show-cause notice dated 26/02/2015 as placed on record reveal that neither the appropriate clause was marked nor appropriate lime was ticked, for which penalty proceedings were being initiated against the assessee. The assessee, in his submissions, drew attention to the aforesaid fact and stressed that the notice was bad in law. See SHRI SAMSON PERINCHERY [2017 (1) TMI 1292 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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