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2016 (5) TMI 977 - AT - Income TaxPenalty u/s 271(1)(c) - defective notice - Held that:- In the order of the assessment the AO has not initiated penalty proceedings u/s 271(1)(c ) of the Act. As rightly pointed out by the ld. Counsel for the assessee even in the assessment proceedings the AO has not made any reference to the provision of section 271(1)(c) of the Act in the show cause notice issued before making the impugned additions in respect of which penalty was imposed. The AO has merely observed that appropriate penal proceedings was proposed to be initiated. Thereafter there has been no actual initiation of penalty proceedings in the order of the assessment. The requirements of levying of penalty u/s 271 (1)(c) of the Act is the satisfaction of the AO in the course of any proceedings under the Act that any person has concealed particulars of his income or furnished inaccurate particulars of such income. Such satisfaction can emanate only from initiation of penalty proceedings while concluding the assessment. In the absence of initiation of penalty proceedings in the order of assessment the proceedings u/s 271(1)(c) of the Act have to be held illegal and invalid and are liable to be quashed. Also in the show cause notice issued before imposing penalty u/s 271(1)(c) of the Act, the AO has not struck off the irrelevant portions namely whether the penalty is sought to be levied for furnishing inaccurate particulars of income or for concealing particulars of income. This Tribunal in the case of Suvaprasanna Bhattacharya vs ACIT (2015 (12) TMI 43 - ITAT KOLKATA) has held that imposition of penalty on such defective show cause notice is improper and liable to be cancelled - Decided in favour of assessee.
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