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Issues involved: Levy of penalty u/s. 271(1)(c) for Assessment Years 2003-04 and 2004-05.
For Assessment Year 2003-04: The assessee, a partnership firm, filed its return declaring 'NIL' income after claiming deduction u/s.80IB(10). The Assessing Officer disallowed the deduction in the assessment u/s.143(3) r.w.s.153A, leading to penalty proceedings u/s.271(1)(c). The assessee contended that the assessment was final and no incriminating material was found during the search. The High Court's decision supported the assessee's argument. The Tribunal held that the penalty was not justified as the assessment had attained finality before the search, and the disallowances were not based on any new findings. For Assessment Year 2004-05: The grounds raised were identical to the previous year. The Tribunal, following the same reasoning, allowed the appeal and cancelled the penalty. In conclusion, both appeals filed by the assessee were allowed, and the penalties u/s.271(1)(c) for both assessment years were cancelled.
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