2020 (9) TMI 327

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....admitting total income of Rs. 1,81,287/-. During the assessment proceedings u/s 143(3) of the Act, the AO on verification of audit report found that the Asesssee has claimed VAT payment of Rs. 16,48,689/- and CST payment of Rs. 1,03,609/-. In order to verify the correctness of the claim, AO addressed a letter to the Commercial Tax Officer (CTO), Bodhan Circle u/s 133(6) of the I.T.Act, 1961 on 24.11.2017. The CTO, Bodhan Circle informed that necessary challans/ records were not traced out in the office for verification of genuineness of payment of VAT & CST for the A.Y 2014-15 and that a fake challan scam occurred in his office and case has also been registered in Bodhan Police Station which is being investigated by the CID. It was also inf....

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...., dt. 28.03.2018 is both erroneous and prejudicial to the interests of the revenue. 3. The Ld. Pr. CIT ought to have appreciated the fact that the A.O has dropped the penalty proceedings initiated u/s 271(1)(c) of the Act, after considering all aspects of the case and therefore, cannot be treated as erroneous in so far as prejudicial to the interests of the revenue u/ s 263 of the Act. 4. The Ld. Pr.CIT ought to have appreciated the fact that the AO. had dropped the penalty proceedings u/s 271(1)(C) of the Income Tax Act, 1961 on the same issues as he was satisfied by the explanations given by the assessee on which Ld. Pr.CIT has passed order u/s 263 which was already examined by the AO. 5. The Ld. Pr.CIT ought to....

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....t a fit case for imposition of penalty. 12. The Pr.CIT erred in finding fault with AO's action in dropping penalty proceedings ul s 271(1)(c) by making order sheet notice only and not passing order of dropping, as there is no statutory provision to that extent. 13. The appellant may add, alter or modify any other points to the grounds of appeal at any time before or at the time of hearing of the appeal." 3. The Ld.Counsel for the assessee submitted that during the assessment proceedings, the assessee had agreed for the addition only because it could not produce the original challans in respect of payment of VAT and CST and during the penalty proceedings, the assessee had clearly explained to the AO that the addition....