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Issues involved: Appeal against penalty order u/s 271(1)(c) of the IT Act, 1961 for concealment of taxable income and furnishing inaccurate particulars of income.
Summary: The appeal was against a penalty order u/s 271(1)(c) of the IT Act, 1961, arising from a survey where the assessee surrendered amounts on excess stock and cash, and claimed long-term capital loss. The AO initiated penalty proceedings for concealment of income. The CIT(A) confirmed the penalty, leading to the second appeal. The Authorized Representative argued that penalty cannot be levied on estimated additions alone and highlighted the timing of the application of s. 50C. The Department contended that the additions were not voluntary disclosures. The Tribunal emphasized that penalty requires establishing concealment or furnishing inaccurate particulars. The AO must consider all facts before concluding on penalty, exercising discretion judiciously. The assessee, engaged in photography services, revised the return after a survey, surrendering income and paying taxes accordingly. The Tribunal noted discrepancies in the statement made during the survey and emphasized the lack of Departmental authorization for the statement. Legal precedents were cited to support the argument that concealment must be proven, not inferred from surrender. The Tribunal concluded that in this case, no penalty under s. 271(1)(c) could be levied due to the circumstances, setting aside the CIT(A) order and canceling the penalty. In conclusion, the Tribunal allowed the appeal of the assessee, canceling the penalty imposed under s. 271(1)(c) of the IT Act, 1961.
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