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2021 (6) TMI 118 - AT - Income TaxPenalty u/s 271(1)(c) - addition u/s 68 - share application money received for allotment of 55,57,000 equity shares - allegation of the AO was that the assessee has routed his unaccounted money - HELD THAT:- We note that in this case, while passing the penalty order, the AO has not discussed or mentioned the charge on which the penalty was levied. AO has not discussed at all one of the two limbs on which the penalty was proposed to be levied. We are quite convinced with the arguments of the Ld. A.R. that how a penalty could be imposed without AO being satisfied on the charge on which the penalty was proposed to be levied - penalty has been levied in a mechanical manner without application of mind. In our view, this is a serious mistake in the penalty order which is incurable at this stage and the penalty order passed by the AO is an invalid order and therefore can not be sustained. D.R. request that the penalty may be restored to the file of the Ld. CIT(A) can not be accepted at this stage as it will not serve any useful purpose by restoring the appeal to the file of the Ld. CIT(A). This is so because by restoring the penalty to the file of the Ld. CIT(A), the appellate authority can not cure the defect/mistake which has been committed by the AO in the penalty order passed under section 271(1)(c) dated 28.03.2011.- we set aside the order of Ld. CIT(A) by holding that the order of penalty passed under section 271(1)(c) of the Act by the AO is an invalid order and is accordingly quashed. - Decided in favour of assessee.
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