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2021 (7) TMI 94 - AT - Income TaxPenalty u/s 271(1)(c) - AO has verified during the assessment that the assessee did not furnish any documents on record to prove that the assets were put to use - CIT (A) deleting the penalty u/s 271(1)(c) on the grounds that appellant should not penalized merely for showing the receipt of consultancy as other income - HELD THAT:- Assessment order passed in this case shows that the AO has failed to record a valid satisfaction to initiate the penalty proceedings u/s 271(1)(c) because he has merely recorded that, “penalty proceedings u/s 271(1)(c), u/s 271B and 271F of the Income Tax Act, 1961, have been initiated separately”, without specifying if the assessee has furnished concealment of particulars of income or has furnished inaccurate particulars of income. Even at the time of passing of penalty order, AO was not clear enough as to whether he is going to levy the penalty for concealment of particulars of income or has furnished inaccurate particulars of income. AO was required to satisfy himself as to under which limb of section 271(1)(c) of the Act he is initiating the penalty proceedings and only thereafter penalty can be levied. In the instant case, AO was neither satisfied/aware at the time of recording a satisfaction in the assessment order nor he was clear enough at the time of penalty proceedings as to under which of the limb of section 271(1)(c) he is going to levy the penalty. - Decided in favour of assessee.
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