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Issues involved: Appeal u/s 260A of the Income Tax Act, 1961 challenging the cancellation of penalty u/s 271(1)(c) by the Income Tax Appellate Tribunal for Assessment Year 2004-2005.
Summary: Issue 1: The appellant raised the question of whether the Appellate Tribunal was correct in canceling the penalty of Rs. 2,17,52,430/- levied by the Assessing Officer u/s 271(1)(c). The assessment for the respondent-assessee for Assessment Year 2004-2005 was finalized, determining the total income and disallowing excess claim of deduction under Sec. 80-IA. The Assessing Officer imposed a penalty of Rs. 2,17,52,430/- u/s 271(1)(c), which was later deleted by the Commissioner of Income Tax (Appeals). The Revenue appealed to the Income Tax Appellate Tribunal, which observed that the quantum appeal of the assessee was pending and ultimately allowed, leading to the deletion of the additions made. The Tribunal held that penalty u/s 271(1)(c) was not leviable based on the Supreme Court's decision in Reliance Petrol Products Pvt. Ltd. The Tribunal's reliance on the Supreme Court's decision was deemed correct, as making an incorrect claim does not necessarily constitute concealment of income. With the quantum appeal being allowed and the additions deleted, the basis for imposing the penalty ceased to exist, leading to the dismissal of the appeal. Conclusion: The appeal was dismissed as it did not raise any substantial question of law in light of the facts presented and the Tribunal's decision.
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