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2023 (4) TMI 465 - ITAT COCHINPenalty u/s. 271(1)(c) - Defective notice u/s 274 - Initiation of penalty on one of the limb and imposing the same on another limb of section 271(1)(c) - HELD THAT:- Admittedly, in this case penalty proceedings was initiated in the assessment order for the latter limb namely “furnishing inaccurate particulars of such income”. Further, the notice u/s. 274 r.w.s. 271(1)(c) of the Act ( notice dated 30.12.2019) was issued for “furnishing inaccurate particulars of such income”. However, we noticed the penalty has been imposed vide order dated 10.02.2022 by referring to the first limb of section 271(1)(c) of the Act namely “concealment particulars of income”. As in the case of A.M.Shah & Company [1998 (8) TMI 607 - GUJARAT HIGH COURT] had held that if very basis for penalty proceedings initiated by the AO disappears, then the penalty imposed on a different footing altogether cannot be sustained. Initiating the penalty in one limb and imposing the same on another limb does not satisfy the requirement of the law - The levy of penalty has to be clear as to the limb for which it is imposed and the position in the instant case is unclear, hence, the penalty is not sustainable. Therefore, when the AO proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Not only that the penalty should be imposed under the same limb. Decided in favour of assessee.
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