2021 (6) TMI 726

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....gned order on the following grounds of appeal before us: "1. On the facts and in the circumstances of the case, the Ld. CIT (A) erred in deleting the penalty levied by the AO u/s 271(1)(c) of the Income Tax Act, 1961, of Rs. 80,243/- without appreciating the facts that the assessee claimed bogus purchases in its Return of Income and thus furnished inaccurate particulars of income within the meaning of section 271(1)(c) of the Income Tax Act, 1961. 2. On the facts and circumstances of the case, the Hon'ble ITAT is requested to entertain this appeal though the tax effect is below the monetary limit prescribed in the CBDTs Circular no. 17/2019 dated 08.08.2019 read with circular no.3/2018 dated 11.07.2018 as amended on 20.08.2018 as th....

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....nt the A.O also initiated penalty proceedings under Sec.271(1)(c) of the Act. 4. After the culmination of the assessment proceedings, the A.O vide his order passed under Sec. 271(1)(c), dated 31.03.2018 imposed a penalty for furnishing of inaccurate particulars of income of amounting to Rs. 80,243/- under Sec. 271(1)(c) of the Act. 5. Aggrieved, the assessee assailed the penalty imposed by the A.O under Sec. 271(1)(c) in appeal before the CIT(A). Observing, that the penalty u/s 271(1)(c) was imposed by the A.O on the basis of an estimate the CIT(A) vacated the same. 6. The revenue being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. D.R relied on the order passed by the A.O u/s 271(1)(c) of the....

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....SFIO / Directorate General of GST Intelligence (DGGI)". Admittedly, it is a settled position of law that quantum proceedings and penalty proceedings are independent and distinct proceedings and confirmation of an addition cannot on a standalone basis justify imposition/upholding of a penalty u/s 271(1)(c) of the Act. Adopting the same logic, we are of the considered view that unless a specific exception is provided in the Circular w.r.t penalty also, it could by no means be construed that penalty was to be treated at par with the quantum additions. As is discernible from Clause 10(e) of the aforesaid CBDT Circular No. 3/2018 (as amended on 20.08.2018), the same applied only to additions which were based on information received from externa....