Tax penalties deleted for assessment years 2003-04 and 2004-05 under section 271(1)(c) based on estimation and small amount.

The Tribunal allowed the appeals of the assessee for assessment years 2003-04 and 2004-05, directing the deletion of penalties imposed under section 271(1)(c). The Tribunal considered the reduction made by the Commissioner of Income Tax (Appeals) and the circumstances of the case, noting the addition was based on estimation and the smallness of the amount involved. The penalties were deleted based on these factors and the peculiar facts of the cases.

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Issues involved:
1. Penalty imposed under section 271(1)(c) for assessment years 2003-04 and 2004-05.
2. Validity of penalty imposition based on concealment of income or furnishing inaccurate particulars.
3. Reduction of penalty by the Commissioner of Income Tax (Appeals) and subsequent appeal to the Tribunal.

Analysis:

*Issue 1: Penalty imposed under section 271(1)(c) for assessment years 2003-04 and 2004-05*
The appeals by the assessee were against the orders of the Commissioner of Income-tax (Appeals) for the assessment years 2003-04 and 2004-05. The penalty under section 271(1)(c) was imposed for these years based on the assessment made by the Assessing Officer.

*Issue 2: Validity of penalty imposition based on concealment of income or furnishing inaccurate particulars*
The assessee raised grounds of appeal challenging the validity of the penalty imposition. They argued that the Assessing Officer did not record the "Satisfaction of Concealment" before issuing the show cause notice, and the notice of penalty was vague and not clear on the grounds for penalty imposition. The assessee contended that the penalty was not valid as the details were disclosed in the audit report as per the requirements.

*Issue 3: Reduction of penalty by the Commissioner of Income Tax (Appeals) and subsequent appeal to the Tribunal*
The Commissioner of Income Tax (Appeals) partly confirmed the penalty imposed by the Assessing Officer but reduced the amount. The assessee then appealed to the Tribunal challenging the penalty. The Tribunal considered the reduction made by the Commissioner in the penalty amount and the circumstances of the case. They noted that the addition was made on an estimation basis and decided to delete the penalty considering the smallness of the amount involved.

In conclusion, the Tribunal allowed the appeals of the assessee for both assessment years 2003-04 and 2004-05, directing the deletion of the penalties imposed. The consistent view taken by the Tribunal in both cases was based on the reduction of the penalty amount by the Commissioner of Income Tax (Appeals) and the peculiar facts and circumstances of the cases.

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