Penalty proceedings under section 271(1)(c) for AYs 2009-12 based on bogus purchases; Tribunal deletes penalty.

Penalty proceedings under section 271(1)(c) for Assessment Years (AY) 2009-10, 2010-11, and 2011-12 were based on an adhoc addition of Gross Profit (GP) rate on bogus purchases. For AY 2009-10 and 2011-12, the Tribunal reduced the addition after accepting the assessee's purchase details and finding no income concealment, leading to the deletion of the penalty. In AY 2010-11, no concealment of income was found, likely resulting in the deletion of the penalty. Despite a significant delay in filing the appeal for AY 2009-10, the appeal was allowed due to the deletion of the penalty on its merits.

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Issues involved: Penalty proceedings u/s 271(1)(c) for AY 2009-10, 2010-11 & 2011-12 based on adhoc addition of GP rate on bogus purchases.

AY 2009-10 & 2011-12:
The Assessing Officer applied a GP rate of 12.5% on bogus purchases, confirmed by Ld. CIT (Appeals). Tribunal reduced the addition, estimating a GP rate of 5%. Assessee's details of purchases were accepted, with no doubts on corresponding sales. Tribunal held that adhoc addition did not indicate income concealment, leading to deletion of penalty u/s 271(1)(c).

AY 2010-11:
Penalty proceedings pending, although hearing concluded. No concealment of income found due to reduced adhoc addition, leading to likely deletion of penalty.

In AY 2009-10, Ld. CIT(A) deemed the appeal as time-barred, dismissed it by 3563 days. Assessee faced financial distress, impacting ability to file appeal in time. Despite delay, considering penalty deletion on merits, dismissal on grounds of delay was rejected, and the appeal was allowed.

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