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2023 (4) TMI 329 - AT - Income TaxPenalty u/s 271(1)(c) - Invalid notice u/s 274 - Non specification of clear charge - addition being the 25% of the bogus purchases - HELD THAT:- Bare perusal of the notice issued in this case by the AO goes to prove that the AO at the time of issuing the notice was not satisfied if he was initiating the penalty against the assessee for concealing particulars of his income or for furnishing inaccurate particulars of such income. This issue has been decided in Md. Farhan A Sheikh [2021 (3) TMI 608 - BOMBAY HIGH COURT] and held that penalty under section 271(1)(c) of the Act is not leviable when invalid notice as in the instant case has been issued to the assessee. Since the AO has failed to initiate the penalty proceedings under section 271(1)(c) of the Act by issuing the valid notice, penalty levied by the AO and confirmed by the Ld. CIT(A) is not sustainable in the eyes of law as the assessee has never been informed about the charges framed to initiate the penalty proceedings through statutory notice. Decided in favour of assessee.
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