TMI Blog2023 (4) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... n the instant case has been issued to the assessee. Since the AO has failed to initiate the penalty proceedings under section 271(1)(c) of the Act by issuing the valid notice, penalty levied by the AO and confirmed by the Ld. CIT(A) is not sustainable in the eyes of law as the assessee has never been informed about the charges framed to initiate the penalty proceedings through statutory notice. Decided in favour of assessee. - ITA No.3186/M/2022 - - - Dated:- 24-2-2023 - Shri Prashant Maharishi, Accountant Member And Shri Kuldip Singh, Judicial Member For the Assessee : Shri Hari Raheja, A.R. For the Revenue : Ms. Vrunda U. Matkari, D.R. ORDER PER : KULDIP SINGH, JUDICIAL MEMBER: The appellant, Mrs. Vaishal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.77,600/- levied u/s 271(1)(c) of the Income tax Act, 1961 as he has not specified the exact charge for which the penalty was proposed to be levied. on the ground that the same is a legal ground which is necessary for adjudication of the issues at hand. Keeping in view the fact that the assessee by way of moving an application sought to raise additional ground which is purely a legal one, necessary to decide the issue at hand, which can be raised at any stage of the proceedings, is allowed. 3. Briefly stated facts necessary for consideration and adjudication of the issues at hand are : on the basis of assessment framed by the AO under section 143(3) of the Income Tax Act, 1961 (for short the Act ) making addition of Rs.2,98,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th section 271 of the Act for ready perusal as under: 8. Bare perusal of the notice (supra) issued in this case by the AO goes to prove that the AO at the time of issuing the notice was not satisfied if he was initiating the penalty against the assessee for concealing particulars of his income or for furnishing inaccurate particulars of such income. 9. This issue has been decided by the Hon ble Bombay High Court in Full Bench Judgment rendered in Md. Farhan A Sheikh (supra) and held that penalty under section 271(1)(c) of the Act is not leviable when invalid notice as in the instant case has been issued to the assessee. The operative part of the order passed by the Hon ble Bombay High Court is as under: 180. One course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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. 10. So following the order passed by the Hon ble Bombay High Court in case of Md. Farhan A Sheikh (supra) we are of the considered view that since the AO has failed to initiate the penalty proceedings under section 271(1)(c) of the Act by issuing the valid notice, penalty levied by the AO and confirmed by the Ld. CIT(A) is not sustainable in the eyes of law as the assessee has never been informed about the charges framed to initiate the penalty proceedings through statutory notice. 11. Consequently appeal filed by the assessee is hereby a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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