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2014 (11) TMI 608 - HC - Income TaxLevy of penalty u/s 271(1)(c) - Whether on the facts and in the circumstances of the case and in light of documentary evidence on record and explanation of the assessee the Tribunal was justified in law in confirming the levy of penalty u/s. 271(1)(c) – Held that:- The Tribunal erred in coming to the conclusion that penalty u/s 271 of the Act was rightly imposed upon the assessee – in New Sorathia Engineering Co. Versus Commissioner of Income-Tax [2006 (1) TMI 71 - GUJARAT High Court] it has been held that the penalty order and the order of CIT(A) show that no clear cut finding has been reached - The Tribunal has failed to appreciate the legal issue - the order of penalty cannot be sustained and the Tribunal could not have sustained the same - The Tribunal having failed to take into consideration and deal with the decision of the jurisdictional High Court it would constitute an error in law which goes to the very basis of the controversy involved - even on the assumption that the initial onus lies on the asseessee, the assessee sufficiently discharged its burden by placing explanation and evidence from time to time - no inquiry was made in case of lenders - the Tribunal committed an error in imposing penalty u/s 271(1)(c) of the Act – thus, the order of the Tribunal is upheld – Decided in favour of assessee.
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