Appeal granted, penalty under section 271(1)(c) set aside for 2012-13.

The Tribunal allowed the appeal, setting aside the penalty imposed under section 271(1)(c) for the assessment year 2012-13.

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Issues Involved:
The appeal challenges the imposition of penalty u/s 271(1)(c) of the Income Tax Act for the assessment year 2012-13.

Assessment and Penalty Proceedings:
The case involved the non-filing of the income tax return for AY 2012-13, leading to a re-opening u/s 147 of the Income Tax Act. The Assessing Officer (AO) assessed the income at INR 6,79,840/- u/s 144 r.w.s. 147 of the Act and initiated penalty proceedings u/s 271(1)(c), eventually imposing a penalty of INR 1,12,220/-.

Appellate Proceedings:
The assessee appealed to the Ld.CIT(A) and subsequently to the Tribunal against the penalty imposition. The grounds of appeal challenged the legality and arbitrariness of the penalty, emphasizing that the assessment was ex-parte and highlighting the excess tax deduction compared to the tax due.

Arguments and Decision:
The assessee contended that no penalty should be imposed u/s 271(1)(c) as there was no tax liability due to higher tax deduction. The counsel relied on section 271(1)(c) provisions and argued the bonafide nature of the assessee's actions. The Tribunal, after hearing both parties and reviewing the case, found the assessment to be ex-parte and based on best judgment under section 144 of the Act. Considering the facts and the excess tax deduction, the Tribunal directed the AO to delete the penalty, thereby allowing the appeal.

Conclusion:
The Tribunal allowed the appeal, setting aside the penalty imposed u/s 271(1)(c) for the assessment year 2012-13. The decision was pronounced in the open court on 31st July 2023.

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