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Issues involved: Appeals by Revenue against Orders by CIT(A) partly allowing assessee's appeal contesting penalty u/s.271(1)(c) for A.Y. 2003-04 and 2005-06.
Issue 1: Penalty u/s.271(1)(c) - Voluntary disclosure or prompted by Revenue The Revenue argued that no reasonable explanation supported by evidence was provided by the assessee, questioning the voluntary nature of the revised returns. The assessee's counsel cited a previous tribunal order for A.Y. 2004-05 where penalty was deleted based on bona fides. The tribunal noted the background facts of the case involving accommodation entries for capital gains and gifts, leading to revised returns and tax payments. The tribunal emphasized the importance of voluntary disclosure and bona fides in penalty proceedings, as per the principles laid down by the apex court in CIT vs. Suresh Chandra Mittal. The tribunal decided to re-adjudicate the matter on merits after finding no examination of the case on merits previously. Issue 2: Relevance of factual findings in quantum proceedings The tribunal highlighted the relevance of findings in quantum proceedings as evidence of concealment of income for penalty purposes. It noted that the tribunal's order for A.Y. 2004-05, exonerating penalty, was common for all family members, indicating consistency in the factual findings. The tribunal emphasized that penalty proceedings are separate from quantum proceedings and require a distinct consideration of the validity of penalty levy u/s.271(1)(c) based on voluntary disclosure and bona fides. Conclusion: The tribunal allowed the Revenue's appeals for statistical purposes and directed a re-adjudication of the penalty matter on merits by the CIT(A) after considering the factual findings and principles related to voluntary disclosure and bona fides in penalty proceedings.
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