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2021 (7) TMI 375 - AT - Income TaxPenalty u/s 271(1)(c) - defective notice u/s 274 - non recording of valid satisffaction - HELD THAT:- AO has not recorded a valid satisfaction and has also issued invalid notice u/s 271(1)(c) / 274 of the Act, the entire penalty proceedings are vitiated and not sustainable in the eyes of law. Not only this, AO while recording the satisfaction for initiation of penalty proceedings stated that he has furnished inaccurate particulars of income whereas he has levied the penalty for concealment of particulars of income. So, the entire exercise as to initiating the penalty proceedings and levying the penalty are without application of mind, hence not sustainable. Even otherwise, AO by disallowing the prior period expenses has not taken into account the benefit of amnesty scheme taken by the assessee from the Electricity Department. Even AO has not disputed genuineness of expenses claimed by the assessee rather disallowed the same by taking a different view which does not attract the provisions contained u/s 271(1)(c) - We are of the considered view that initiating penalty u/s 271(1)(c) of the Act on the basis of vague and ambiguous notice is not sustainable in the eyes of law - Decided in favour of assessee.
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