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2020 (2) TMI 115 - AT - Income TaxPenalty u/s 271(1)(c) - Defective notice - make out the case of concealment of income or furnishing inaccurate particular of income - disallowance of credit card expenses claimed by the assessee as well as on account of failure of the assessee to explain the source of acquisition of the jewellery - HELD THAT:- Following the decisions rendered in the cases of CIT vs. Manjunatha Cotton and Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] , CIT vs. SSA’s Emerald Meadows [2016 (8) TMI 1145 - SC ORDER] and Pr. CIT vs. Sahara India Life Insurance Company Ltd. [2019 (8) TMI 409 - DELHI HIGH COURT] we are of the considered view that when the notices issued by the AO are bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. AO has failed to apply his mind at the time of recording satisfaction at the time of framing assessment to initiate the penalty proceedings u/s 271(1)(c) of the Act as to under which limb of section 271(1)(c) i.e. for concealing particulars of income or furnishing inaccurate particulars of such income penalty proceedings have been initiated rather written vague and ambiguous satisfaction by recording that, “penalty proceedings u/s 271(1)(c) are initiated”. So, very initiating penalty proceedings on the basis of vague and ambiguous satisfaction rather “no satisfaction” are bad in law and as such not sustainable. Not only this even at the time of initiating the penalty proceedings the Assessing Officer was not aware enough as to whether he is initiating the penalty proceedings for concealment of particulars of income or for furnishing inaccurate particulars of income rather sought to initiate the penalty against the assessee We are of the considered view that when at the time of initiating penalty proceedings Assessing Officer was not aware as to under which of the limb of Section 271(1)(c) he is intiating the penalty proceedings subsequent proceedings u/s 271(1)(c) are futile exercise making levy of penalty is not sustainable in the eye of law - Decided in favour of assessee.
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