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2020 (6) TMI 464 - AT - Income TaxPenalty levied u/s. 271(1) ( c) r.w.s.274 - defective notice - AO had sent show cause notice for both the faults envisaged u/s 271(1) (c) of the Act i.e. for both (i) concealment of particulars of income (ii) and for furnishing of inaccurate particulars of income - HELD THAT:- AO has not stricken out the irrelevant portion of the fault/charge which would have spelt out the specific fault/charge against the assessee as per section 271(1) (c) of the Act. Since the proposed notice itself is defective, all subsequent proceedings are bad in law and the penalty imposed by the AO u/s. 271(1)(c) of the Act and confirmed by the Ld. CIT(A) should be cancelled. Notice proposing penalty should clearly spell out the fault/charge for which the assessee is put on notice, so that he can defend the charge properly. The issue of bad/vague penalty notice was adjudicated by the Hon’ble Karnataka High Court [though in a different context i.e notice issued u/s. 274 read with section 271(1)( c) in the case of CIT vs. SSA’s Emerald Meadows [2015 (11) TMI 1620 - KARNATAKA HIGH COURT] wherein the Hon’ble High Court following its own decision in the case of CIT vs Manjunatha Cotton and Ginning factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] has held that if the penalty notice is vague, then the penalty order is also bad in the eyes of law. - Appeal of assessee is allowed.
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