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2017 (2) TMI 807 - AT - Income TaxPenalty u/s. 271(1)(c) - unexplained income of assessee - validity of notice - whether the proceedings were initiated for ‘concealment of penalty’ or ‘for furnishing inaccurate particulars’? - Held that:- The reason for adding the amounts in the hands of assessee is only because the AO did not find necessary entries in the books of account of the above two concerns. If that is the case, since those people have owned up the amounts, necessary proceedings could have been initiated in their hands. However, in order to settle the matter, assessee had accepted the addition and paid the taxes accordingly. In these circumstances, we are of the opinion that assessee’s explanation given has not been disproved. Just because an addition has been made and agreed by assessee, it does not automatically lead to levy of penalty u/s. 271(1)(c). Notice does not specify for what offence the proceedings are initiated.The copy of the notice placed on record do indicate that it is a printed proforma, without striking-off the relevant columns and simply signed by the AO which has served on assessee. On similar facts, as in the case of Manjunatha Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] has held that the practice of the department sending a printed form where all the grounds mentioned in 271 are mentioned would not satisfy the requirement of law when the consequence of assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 10% to 300% of tax liability. As the said provisions have to be held to be strictly construed, notice u/s. 274 should satisfy the grounds which he has to meet specifically. - Decided in favour of assessee
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