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2023 (12) TMI 28 - AT - Income TaxValidity of Penalty proceeding u/s. 271(1)(c) - Non specification of clear charge - non striking of the irrelevant limb - validity of the notice issued u/s. 274 r.w.s. 271 challenged on the ground that non striking of the irrelevant limb in the notice would vitiate the penalty proceedings - HELD THAT:- The jurisdictional ground raised by the assessee is supported by the decision of Mohd. Farhan A. Shaikh [2021 (3) TMI 608 - BOMBAY HIGH COURT] which has held that non striking on the irrelevant limb would vitiate the penalty proceedings in toto. As it is a settled proposition of law that the ld. A.O. ought to have struck off the irrelevant limb while issuing the penalty notice, we are of the considered view that the penalty levied by the ld. A.O. and partly confirmed by the ld. CIT(A) has to be deleted. Thus non striking of the irrelevant limb has been held to be violation of the mandatory condition, which in turn violates the principle of natural justice. Assessee should be aware of the exact charge for which the penalty proceeding has been initiated in order to entitle him to contend on the said charges. The non striking of the irrelevant limb amounts to vagueness and ambiguity in the notice which tantamount to non application of mind by the ld. A.O. It also does not give the assessee a proper opportunity of hearing manifested in the provision of section 274 - Thus penalty deleted - Decided in favour of assessee.
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