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2020 (11) TMI 776 - AT - Income TaxPenalty levied u/s 271(1) (c) - Defective notice - TP Adjustment - HELD THAT:- Bare perusal of the notices issued u/s 274 read with section 271(1)(c) of the Act, extracted above, in order to initiate the penalty proceedings against the assessee go to prove that at that point of time, AO himself was not aware/sure as to whether he is initiating penalty proceedings by way of impugned notice either for “concealment of particulars of income” or “furnishing of inaccurate particulars of income” by the assessee rather issued vague or ambiguous notice by incorporating both the limbs of section 271 (1) (c) of the Act. AO also neither invoked Explanation 7 of section 271(1)(c) of the Act nor any satisfaction note in the notices initiating the penalty proceedings has been recorded. When the charge is to be framed against any person so as to move the penal provision against assessee, he is required to be specifically made aware of the charges to be levied against the assessee under specific provisions of the Act. Not only this, even at the time of assessment proceedings, AO has not applied his mind as to whether he is satisfied if the assessee company has “concealed the income” or “furnished inaccurate particulars of income” mandatory to initiate the penalty proceedings u/s 271(1)(c) of the Act which is apparent from the satisfaction note of the AO - When the AO has not applied his mind at the time of initiation of penalty proceedings by satisfying himself if it is a case of “concealment of income” or “furnishing of inaccurate particulars of income” then the entire penalty proceedings are vitiated and bad in law. - Decided in favour of assessee.
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