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Tax penalty for assessment year 2015-16 cancelled due to lack of evidence and legal inconsistencies. The penalty levied under section 271(1)(c) for additions made during the original assessment for the assessment year 2015-16 is deleted. The penalty for ...
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Tax penalty for assessment year 2015-16 cancelled due to lack of evidence and legal inconsistencies.
The penalty levied under section 271(1)(c) for additions made during the original assessment for the assessment year 2015-16 is deleted. The penalty for the estimated disallowance of expenses and the amount received from Hindustan Unilever Ltd. is cancelled as they were based on presumption and not lack of evidence. Additionally, the penalty related to concealment of income from property sale cannot be upheld due to the absence of mention in the assessment order. The appeal of the assessee is allowed, and the penalties are deleted based on legal precedents and principles of consistency.
Issues: The appeal challenges the levy of penalty under section 271(1)(c) of the Act for the assessment year 2015-16 based on additions made during the original assessment.
Addition of Rs. 97,961/-: The penalty was confirmed for this amount, representing an estimated disallowance of expenses in the profit and loss account. However, as the addition was based on presumption and not lack of evidence, no penalty is leviable. Therefore, the penalty for this addition is deleted.
Addition of Rs. 1,04,912/-: The penalty for this amount, received from Hindustan Unilever Ltd., was contested by the assessee, stating it was reflected in the profit and loss account with TDS effects. As penalty proceedings are separate, the Assessing Officer failed to disprove this submission. Consequently, the penalty for this addition is also cancelled.
Concealment of Income from Property Sale: The revenue argued that there was concealment of income from the sale of immovable property at Jeypore. However, as this addition was not mentioned in the assessment order, the penalty cannot be upheld based on this ground.
Show Cause Notice Issue: The Co-ordinate Bench emphasized the necessity of striking off inappropriate clauses in the show cause notice, citing relevant legal precedents. As the AO did not strike off inappropriate clauses in the notice, the penalty as levied and confirmed is deleted, following the principles laid down by the Hon'ble Supreme Court and the principle of consistency.
Decision: The penalty levied under section 271(1)(c) for both additions is deleted, and the appeal of the assessee is allowed.
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