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2020 (2) TMI 321 - ITAT INDORELevy of penalty u/s 271(1(c) - search and seizure operation u/s 132 - assessee(s) offered additional income which includes undisclosed investment in hundies - alleged penalty notices issued u/s 274 of the Act no specific charge has been leveled against the assessee - HELD THAT:- We observe that the facts of the case before the Hon’ble jurisdictional High Court in the case of Kulwant Singh Bhatia [2018 (5) TMI 960 - MADHYA PRADESH HIGH COURT] were almost identical issue penalties were also confirmed by the CIT(A) but were deleted by the Tribunal holding the same as not sustainable in law, as no specific charge was levied in penalty show cause notice. as no specific charge was levied in the penalty show cause notice. As notice issued u/s 274 r.w.s 271(1)(c) of the Act is suffering from serious technical error and non application of mind by Ld.A.O who failed to level specific charge on the assessee at the time of initiating penalty proceedings due to which the principle of natural justice seems not to have been followed. We accordingly allow the assessee’s appeal on this legal ground and hold that the impugned penalty notices issued u/s 274 r.w.s. 271(1)(c) of the Act as invalid and untenable and thus deserves to be quashed which renders the penalty proceedings void ab intio. We therefore allow the common legal ground raised by the assessee in these bunch of five appeals challenging the legality of notice issued u/s 274 r.w.s. 271(1)(c) of the Act and accordingly direct the Ld.A.O to delete the penalty levied u/s 271(1)(c) - Decided in favour of assessee. Penalty u/s 271AAB - Defective notice - HELD THAT:- Matter written in the body of the notice issued u/s 274 of the Act does not refer to the charges of provision of Section 271AAB of the Act makes the alleged notice defective and invalid and thus deserves to be quashed. Since the penalty proceedings itself has been quashed the impugned penalty in respect of Shri Hemant Kumar Jain and in respect of Shri Harsh Jain for Assessment Year 2014-15 and Assessment Year 2015-16 respectively stands deleted. We accordingly allow the legal ground raised by the assessee challenging the validity of notice issued u/s 274 r.w.s. 271AAB of the Act and quash the penalty proceeding as void ab intio.
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