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2023 (5) TMI 465 - AT - Income TaxPenalty u/s.271(1)(c) - Defective notice u/s 274 - non specification of clear charge - HELD THAT:- AO proposed to impose penalty on both the limbs namely; “….you have concealed the particulars of your income or furnished inaccurate particulars of such income”. Irrelevant limb was not struck out. The question as to whether penalty should be imposed in such circumstances is no more res integra by virtue of the full Bench judgment of the Hon’ble Bombay High Court in Mohd. Farhan A. Shaikh & Anr. [2021 (3) TMI 608 - BOMBAY HIGH COURT] holding that if the charge in the notice u/s 274 is vague i.e. irrelevant charge has not been struck off, the penalty order u/s 271(1)(c) gets vitiated. Thus where the charge is not properly set out in the notice u/s 274 viz., both the limbs stand therein without striking off of the inapplicable limb, but the penalty has been, in fact, levied for one of the two, such a penalty order gets vitiated. We find from the notice u/s 274 of the Act that the AO did not strike out one of the two limbs, whereas the penalty is only on one addition - Decided in favour of assessee.
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