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2020 (7) TMI 124 - AT - Income TaxPenalty u/s 271 (1)(c) - defective notice - as per AO assessee has furnished inaccurate particulars by claiming ‘Provisions of Fines & Penalties’ in its ITR and concealed the income to that extent - HELD THAT:- AO has not made it clear under which limb of the provisions of Section 271(1)(c) of the Act, the penalty is being levied. There is glaring discrepancy between initiation of the penalty and levy of penalty. This is a jurisdictional issue arising out of the penalty order before us. DR heavily relied on the judgment of Sundaram Finance Ltd. Vs CIT [2018 (5) TMI 259 - MADRAS HIGH COURT] and argued that the Hon’ble High Court held that where notice did not show the nature of default, it was a question of fact. The assessee has understood purport and import of the notice, hence, no prejudice was caused to the assessee. As decided in M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [2019 (8) TMI 409 - DELHI HIGH COURT] notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. Also see M/S SSA'S EMERALD MEADOWS [2016 (8) TMI 1145 - SC ORDER] - We hereby hold that the penalty levied by the Assessing Officer cannot be held to be legally valid in the eyes of law. - Decided in favour of assessee.
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