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2021 (3) TMI 1042 - AT - Income TaxPenalty u/s 271(1)(c) - AO has not recorded any satisfaction as to whether the penalty u/s 271(1)(c) has been levied for furnishing of inaccurate particulars of income or it was a case of concealment of income - HELD THAT:- The show-cause notice dated 20.03.2015 also does not specify as to for which limb of Section 271(1)(c) of the Act the penalty proceedings are initiated i.e. whether it is for concealment of the particulars of income or for furnishing of inaccurate particulars of income. Even in the penalty order, no specific charge i.e. whether it is a case of furnishing of inaccurate particulars of income or a case of concealment of the particulars of income has been indicated. It is a settled law that while levying penalty for concealment, the AO has to record satisfaction and thereafter come to a finding in respect of one of the limbs, which is specified under section 271(1)(c) of the Act. The first step is to record satisfaction while completing the assessment as to whether the assessee had concealed its income or furnished inaccurate particulars of income. Notice u/s 274 read with Section 271(1)(c) of the Act is to be issued to the assessee. The Assessing Officer thereafter has to levy penalty under Section 271(1)(c) of the Act for non-satisfaction of either of the limbs. While completing the assessment, the Assessing Officer has to come to a finding as to whether the assessee has concealed its income or furnished inaccurate particulars of income. In the present case following the aforesaid decision in the case of Sahara India Life Insurance Co. Ltd.[2019 (8) TMI 409 - DELHI HIGH COURT] we are of the view that since the basic condition for levy of penalty has not been fulfilled the penalty order cannot be upheld. We accordingly set aside the penalty order passed by AO - Decided in favour of assessee.
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