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June 2025

S. 271(1)(c) – Where the AO did not specify in the penalty notice the limb of section 271(1)(c) under which penalty had been initiated, such notice was ambiguous and void ab initio and all subsequent proceedings became nullity in the eyes of law.

By Jagdish T Punjabi, Chartered Accountant
Devendra Jain & Aditya Bhatt, Advocates
Reading Time 3 mins

19. (2025) 174 taxmann.com 59 (Raipur Trib)

Nilima Agrawal vs. ITO

ITA No.: 126 (Rpr) of 2025

A.Y.: 2015-16 Dated: 24 April 2025

S. 271(1)(c) – Where the AO did not specify in the penalty notice the limb of section 271(1)(c) under which penalty had been initiated, such notice was ambiguous and void ab initio and all subsequent proceedings became nullity in the eyes of law.

FACTS

The AO issued penalty notice under section 274 read with section 271(1)(c) where the notice referred to both the limbs under section 271(1)(c), that is, concealed the particulars of income and furnished inaccurate particulars of income. The AO had not struck off the inappropriate limb.

CIT(A) / NFAC upheld the penalty order.

Aggrieved, the assessee filed an appeal before ITAT.

HELD

The Tribunal observed that-

(a) The legal parameters that have been set forth by the judicial pronouncements is that through the penalty proceedings initiated against the as

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