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2022 (9) TMI 48 - AT - Income TaxPenalty u/s 271(1)(c) - Defective notice u/s 274 - case of the assessee that the AO while imposing penalty was in a mind of ambiguity and has not arrived at a proper satisfaction since both in the penalty order as well as in the notice u/s 274 r.w.s. 271(1)(c) - HELD THAT:- AO in the entire process of initiation of levy of penalty u/s 271(1)(c) was ambiguous and did not have any clarity of mind so as to under which limb of the provision, he intend to impose penalty on the assessee. There is no evidence on record to suggest that the A.O has arrived at any satisfaction. As per the penalty order and the notice u/s 274 r.w.s. 271(1)(c) of the Act, it is clear that there was ambiguity in the mind of A.O so that he has not struck off the inappropriate limb of the provision and has retained both the limbs i.e. concealment of income and furnishing of inaccurate particulars of income while imposing penalty. This exercise is not at all warranted in the realm of income-tax proceedings. The jurisdictional High court in the case Shri Samson Perinchery [2017 (1) TMI 1292 - BOMBAY HIGH COURT] has held that the A.O is under obligation to satisfy the appropriate limb of section 271(1)(c) at the time of initiation of levy of penalty. We have also observed that the notice u/s 274 r.w.s. 271(1)(c) is ambiguous and that the A.O has not arrived at satisfaction as to which limb of the provision he is levying the penalty. A.O has not struck off the inappropriate limb of the provision which is evidently noticed. We set aside the order of the ld. CIT(A) and direct the A.O to delete the penalty from the hands of the assessee. The ground of appeal of the assessee is allowed.
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