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TMI Blog2021 (9) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. As is discernible from Clause 10(e) of the aforesaid CBDT Circular No. 3/2018 (as amended on 20.08.2018), the same applied only to additions which were based on information received from external sources. As noticed by us hereinabove, since the levy of penalty by no means could be construed as an addition within the meaning of Clause 10(e) of the aforesaid circular, therefore, we do not find any merit in the contentions advanced by the ld. D.R that the aforesaid exception carved out in the CBDT Circular No. 3/2018 (supra) would also take within its realm a penalty imposed under Sec. 271(1)(c) w.r.t the additions made by the A.O towards bogus purchases on the basis of information received from Sales Tax Department i.e an external agenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting penalty u/s 271(l)(c) of ₹ 1,10,000/- ignored the fact that the Hon'ble ITAT vide appellate order dated 22.05.2018 in the assessee's own case vide appeal No. ITA 1000/Mum/2018 has confirmed the order of the Ld. CIT(A) who upheld the quantum disallowance of ₹ 3,55,154/- being 12.5% out of ₹ 28,41,238/-." 2. Briefly stated, the assessee company which is engaged in the business of manufacturing of sheet metal components had e-filed its return of income for A.Y 2011-12 on 30.09.2011, declaring a total income of ₹ 88,422/-. Subsequently, a revised return of income was filed on 14.01.2012 declaring Nil income. Thereafter, the case of the assessee was reopened under Sec. 147 of the Act. Observing that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee at the very outset of the hearing of the appeal submitted that the appeal filed by the revenue was not maintainable as per the CBDT Circular No. 17/2019, dated 08.08.2019, as the tax effect therein involved was substantially lower than that contemplated in the aforesaid circular. 7. Per contra, it was submitted by the ld. Departmental Representative (for short 'D.R') that the present appeal filed by the revenue was covered by the Exception (e) of clause 10 of the CBDT Circular No. 3 of 2018 (as amended on 20.08.2018). 8. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the CBDT Circulars as had been relied upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ……………………………………………………………. (e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI / ED / DRI / SFIO / Directorate General of GST Intelligence (DGGI)". Admittedly, it is a settled position of law that quantum proceedings and penalty proceedings are independent and distinct proceedings and confirmation of an addition cannot on a standalone basis justify imposition/upholding of a penalty u/s 271(1)(c) of the Act. Adopting the same logic, we are of the considered view that unless a specific exception is provided i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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