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2019 (9) TMI 663 - AT - Income TaxPenalty u/s 271(1)(c) - defective notice - Disallowance on account of claiming excessive bad debts written off - whether the assessee has concealed particulars of income or has furnished inaccurate particulars of income during assessment proceedings? - HELD THAT:- Hon’ble High Court of Karnataka in case of CIT vs. Manjunatha Cotton and Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] while deciding the identical issue held that when the AO has failed to issue a specific show-cause notice to the assessee as required u/s 274 read with section 271(l)(c), penalty levied is not sustainable. When the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. See M/S SSA'S EMERALD MEADOWS [2016 (8) TMI 1145 - SC ORDER] Even the AO has failed to apply his mind at the time of recording satisfaction at the time of framing assessment to initiate the penalty proceedings u/s 271(1)(c) of the Act as to under which limb of section 271(1)(c) i.e. for concealing particulars of income or furnishing inaccurate particulars of such income, penalty proceedings have been initiated rather written vague and ambiguous satisfaction recorded that, “penalty proceedings u/s 271(1)(c) are initiated - Decided in favour of assessee.
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