2012 (11) TMI 67 - AT - Income Tax

Penalty u/s 271(1)(c) - Held that - In the quantum appeal the addition is confirmed partly on the basis of estimates and not on any defects - it is not in dispute neither by the AO nor by the CIT (A) that the sales effected by the assessee are bogus, thus the penalty levied on the assessee is just on the basis of conjecture and surmises - in favour of assessee.

Summary

Issues:
Revenue's appeal against the order of the CIT (A) restricting the penalty imposed under section 271(1)(c) of the Income Tax Act.

Analysis:
The Revenue raised three grounds in its appeal, but the main contention was regarding the CIT (A) allegedly erring in limiting the penalty imposed by the Assessing Officer to 20%. The learned DR supported the AO's decision to levy a penalty of Rs. 3.30 lakhs under section 271(1)(c) of the Act. Despite no representation from the assessee during the hearing, a written submission was provided. The Tribunal noted that the assessee had previously challenged both the quantum and penalty orders for the relevant assessment years before the Tribunal, where representatives of both sides had presented their arguments.

Regarding the penalty imposed under section 271(1)(c) of the Act, a previous Bench of the Tribunal had already addressed the issue in the assessee's favor in June 2010. The earlier Bench found that the penalty was based on conjecture and surmises, as the sales were deemed bogus without concrete evidence of inaccurate particulars of income being furnished by the assessee. Consequently, the penalty was deleted, and the assessee's appeal was allowed. As a result, the Tribunal deemed the present appeal by the Revenue as redundant and dismissed it as in-fructuous.

In conclusion, the Tribunal upheld the decision of the earlier Bench in favor of the assessee regarding the penalty imposed under section 271(1)(c) of the Act, rendering the Revenue's appeal unnecessary and dismissing it accordingly.