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2023 (7) TMI 1208 - AT - Income TaxPenalty u/s 271(1)(c) - Defective notice - non specification of clear charge - non striking of irrelevant part - HELD THAT - AO did not strike off any of the twin charges i.e., concealment of particulars of income or furnishing of inaccurate particulars of income. The case of the assessee is squarely covered by the decision of Mohd. Farhan A. Shaikh 2021 (3) TMI 608 - BOMBAY HIGH COURT wherein held that the defect in notice by not striking off the irrelevant matter would vitiate the penalty proceedings. Accordingly, penalty order passed u/s 271(1)(c) of the Act is quashed. Decided in favour of assessee.
Issues: Challenge to penalty order u/s 271(1)(c) of the Income Tax Act, 1961 for assessment year 2010-11.
Summary: 1. The appeal was filed challenging the order passed by the Commissioner of Income Tax (Appeals) under section 250 of the Act, arising from the penalty order u/s 271(1)(c) for the assessment year 2010-11. 2. The assessee raised grounds questioning the initiation of penalty proceedings without specifying the nature of penalty and challenging the confirmation of the penalty amount. 3. The assessee, engaged in metal trading, filed its return declaring income. Subsequently, proceedings were initiated under section 147 based on information received regarding bogus bills. An addition was made to the income due to non-genuine purchases. 4. The penalty order was passed by the Assessing Officer under section 271(1)(c), which was upheld by the Commissioner. The appeal was filed against this decision. 5. During the hearing, it was argued that the penalty was levied without specifying the nature of the penalty - concealment of income or furnishing inaccurate particulars. 6. The Departmental Representative relied on the lower authorities' order. 7. The Tribunal found that the penalty proceedings were vitiated as the AO did not specify the nature of the penalty in the notices issued, following a decision of the Jurisdictional High Court. Consequently, the penalty order was quashed. 8. As a result, the appeal by the assessee was allowed. *Order pronounced in the open Court on 27/07/2023*
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