TMI Blog2022 (6) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... d vitiate the penalty proceedings. In the second notice dated 15.03.2019, the AO has mentioned both the charges of section 271(1)(c) of the Act. This shows ambiguity in the mind of AO with regard to charge under section 271(1)(c) of the Act, that is to be invoked. The Hon ble Apex Court in the case of T. Ashok Pai [ 2007 (5) TMI 199 - SUPREME COURT] has held the concealment of income and furnishing inaccurate particulars of income carry different connotations. Thus, the AO is duty bound to clearly convey to the assessee the limb for which penalty is to be levied. Where the position is unclear, penalty is unsustainable. Thus, the penalty levied under section 271(1)(c) of the Act is unsustainable on account of defect in statutory notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty of 300% of the tax i.e. Rs. 1,84,200/- in respect of the addition confirmed by the Tribunal. The ld. Authorized Representative (AR) submitted that in first appeal, the CIT(A) upheld the levy of penalty, however, partial relief was granted to the assessee by restricting penalty @ 100%. The ld. AR submitted that the CIT(A) has erred in upholding penalty to the extent of 100% instead of deleting the penalty as the penalty has been levied on addition merely on estimations. The ld. AR further pointed that the notice issued under section 274 r.w.s. 271(1)(c) of the Act dated 18.03.2015 is ambiguous, in as much as the irrelevant clause have not been struck off by the AO before issuing the notice. Even in subsequent notice issued on 15.03.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Rubber Industries 360 ITR 580(Raj.), CIT Vs. Subhash Trading Company 221 ITR 110 (Guj.), CIT Vs. Sangrur Vanaspati Mills Ltd. 303 ITR 53 (P H)]. 5. We further find that the notice issued under section 274 r.w.s. 271(1)(c) of the Act dated 18.03.2015 and the subsequent notice issued under section 271(1)(c) of the Act dated 15.03.2019 falls short of the legal requirement to be a valid notice for levy of penalty. The first notice issued under section 274 r.w.s. 271(1)(c) is in Performa, without any application of mind by the AO. The irrelevant limb of section 271(1(c) of the Act has not been struck off. The Hon ble jurisdictional High Court in the case of Mohd. Farhan A. Shaikh (supra) has dealt with the issue where the notice was iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mains distinct from the assessment proceedings. Therefore, the assessee must be informed of the grounds of the penalty proceedings only through statutory notice. An omnibus notice suffers from the vice of vagueness. 182. More particularly, a penal provision, even with civil consequences, must be construed strictly. And ambiguity, if any, must be resolved in the affected assessee s favour. 6. In the second notice dated 15.03.2019, the AO has mentioned both the charges of section 271(1)(c) of the Act. This shows ambiguity in the mind of AO with regard to charge under section 271(1)(c) of the Act, that is to be invoked. The Hon ble Apex Court in the case of T. Ashok Pai Vs. CIT 292 ITR 11 has held the concealment of income and furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X
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