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2022 (10) TMI 161 - AT - Income TaxPenalty u/s 271(1)(c) - Defective notice u/s 274 - non-strike off of the irrelevant part in the notice - HELD THAT:- As could be seen from the above the Hon'ble Bombay High Court (Full Bench at Goa) in the case of Mr. Mohd. Farhan A. Shaikh v. ACIT [2021 (3) TMI 608 - BOMBAY HIGH COURT] while dealing with the issue of non-strike off of the irrelevant part in the notice issued u/s.271(l)(c) of the Act, held that assessee must be informed of the grounds of the penalty proceedings only through statutory notice and an omnibus notice suffers from the vice of vagueness. As the notice u/s. 274 r.w.s. 271(l)(c) of the Act was issued without striking off the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notices were issued. Thus penalty notice issued u/s. 271(l)(c) of the Act by the Assessing Officer is bad in law and accordingly the penalty order passed u/s. 271(l)(c) of the Act for Assessment Year 2008-09 is quashed. Even on merits penalty under section 271(1)(c ) of the Act is not leviable since the addition made by the Assessing Officer is on account of ad-hoc estimation of net profit @ 8% on the un-reconciled turnover as per books and as per Form 26AS and the addition is only of Rs.98,863/-. Additions made on ad-hoc basis on estimation does not attract penalty under section 271(1)(c) of the Act as there is no conclusive proof of concealment of income or furnishing of inaccurate particulars of income. Therefore, even on merits penalty is liable to be deleted. Appeal of assessee allowed.
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