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2009 (8) TMI 761 - ITAT NAGPURPenalty - assessee contended that mere fact of agreement to include certain amounts as income for a particular year would not "ipso jure" a ground in holding the same as concealed income particularly when such amount was surrendered merely as an income and not as a concealed income- The AO, however, held that the surrender of the said amount established it beyond doubt that the assessee had concealed particulars of its income while filing the return of income and the same would not have been surrendered if the AO would not have made the inquiries- Thereafter, the AO, relying on cl. (b) of Explanation to s. 271(1)(c) held that the assessee failed to submit necessary documents, hence, the explanation offered could not be considered as bona fide - CIAT(A) waived the penalty - Held that: when in case of a search, the assessee declares certain undisclosed income, then, he is saved from levy of penalty. Undisputedly exercise of search and search assessments is more rigorous than assessment proceedings under s. 143(3) of the Act in normal course and when an assessee, in those situations, can be exempt from levy of penalty under s. 271(1)(c) of the Act, we are unable to find any reason that in case of agreed additions even though the same may be after some exercise by the AO, penalty under s. 271 (1)(c) cannot be waived. An argument can be taken that in case of block assessment the rate of tax is 60 per cent. however, in case of normal assessment, if we take into consideration various interests payable by the assessee as a consequence of an addition, the rate of tax ultimately reaches to that level. Hence, this argument cannot also be taken. Penalty waived by CIT(A) upheld - In favor of assessee.
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