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2022 (9) TMI 27 - AT - Income TaxPenalty u/s. 271(1)(c) - Defective notice u/s 274 - non specification of charge - HELD THAT:- AO had though observed that there is concealment of income and accordingly Assessee company is liable for penalty proceeding u/s. 271(1)(c) of the Act. However, when the notice was issued on 27.03.2015 there was no specific indication of the limb of the default. Further during the penalty proceeding while making the conclusion the AO observed "in view of the above discussions and decided case laws, I hold that the Assessee had concealed/furnished inaccurate particulars of its income and is liable for imposition of penalty u/s. 271(1)(c) of the Act as follows". Thus, inspite of giving observation in the assessment order that there is concealment of income. Notice issued and the penalty order makes it ambiguous as to under which limb, the penalty order has been passed. Para 7 of the order of Ld. FAA shows that this argument was specially raised and relevant precedents were cited but Ld. CIT(A) has failed to make any discussion on this aspect - Following the settled proposition of law recognized in Pr. CIT Vs. Sahara Life Insurance Company Ltd.[2019 (8) TMI 409 - DELHI HIGH COURT] that where there is failure on the part of the AO to indicate and specify under which limb of section 271(1)(c) penalty proceedings has been initiated, the penalty order cannot be sustained. The ground No. 1 stands allowed and as very exercise of jurisdiction becomes vitiated. Appeal of assessee allowed.
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