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It has to be kept in mind that the assessment proceeding is distinct from the penalty proceedings and it is a settled law that imposition of penalty is discretionary and not mandatory.

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Even if the AO is of the opinion that action/omission of assessee attracts both the charges, then it was incumbent upon him, to put the assessee on notice by expressing his intention to proceed against the assessee for both charges by striking out ‘or’ and substituting it with ‘and’

Facts: From the Misc. application preferred by the revenue it is discerned that the Tribunal had allowed the appeal of the assessee and cancelled the penalty levied u/s. 271(1)(c) by taking note of the invalid notice, since the AO failed to specify the charge by striking down the irrelevant fault/charge i.e. “having concealed the particulars of income or furnishing in accurate particulars of such income”.

held, that omission of the AO to strike of ‘or’ between the two charges and write/add ‘and’ in between both the charges makes the notice vague. So, even if the AO is of the opinion that action/omission of assessee attracts both the charges, then it was incumbent upon him, to put the assessee on notice by expressing his intention to proceed against the assessee for both charges by striking out ‘or’ and substituting it with ‘and’ which AO has failed to do in this case. The AO by not bothering even to do the exercise as suggested by us reveals the mechanical approach of issuing penalty notice which action exposes the non-application of the mind on the part of the AO to put the assessee on clear notice for which he intends to levy penalty.So, in the facts and circumstances , the Misc. Application filed by the Revenue fails since there was no error leave alone error apparent on the face of the impugned order of the Tribunal. - ITO V/s SHRI BIMAL TALUKDAR - [2020] 26 ITCD Online 093 (ITAT-GAUHATI)