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2010 (7) TMI 500 - KARNATAKA HIGH COURTSearch and seizure - Block assessment - Undisclosed income - Penalty u/s 158BFA - "Whether the Tribunal was justified in setting aside the penalty imposed on the ground that under section 158BFA(2) the element of offence is absent and consequently, imposition of penalty is illegal? Held that: - In the order passed by the AO, no reasons are assigned for imposing penalty. Penalty is imposed because the assessee has not complied with the conditions stipulated in the first proviso. That cannot be the reason for imposing penalty. Though the assessee had not paid the tax payable on the date of the assessment order and the payment of tax was in instalments in pursuance to the notice issued, as there is a cash crunch, he has paid the tax subsequently. When the tax payable on the undisclosed income under section 113 of the Act is 60 per cent it takes care of many factors. - Tribunal in his jurisdiction was justified in setting aside the order of penalty. Though we do not agree with the reasoning of the Tribunal that the provision does not contemplate the nature of the offence for coming to the conclusion that penalty is not leviable, in this case it is not necessary for us to go into the correctness or the legality of the said finding as the assessee is entitled for relief on the merits of the case.
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