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Issues:
Appeal against penalty imposition under section 271(1)(c) of the Income-tax Act, challenge to special audit under section 142(2A), lack of satisfaction for penalty initiation. Analysis: The appellant challenged the penalty imposition of Rs. 96,41,811 under section 271(1)(c) of the Income-tax Act, arguing that the accounts were simple with no complexity. The audit report highlighted various items, including salary and wages, sales-tax deposit, BWSSB deposit, stock valuation, and more, which were added to the income. The appellant contended that these were not deliberate attempts to show lower income but mistakes due to completed contract basis accounting. The Assessing Officer initiated penalty proceedings without specifying the concealment elements, leading to the appellant's argument for quashing the penalty. The appellant also raised concerns regarding the approval process for the penalty, indicating discrepancies in dates between the order and approval. The appellant argued that the expenses in question were not inaccurate particulars but adjustments due to inability to recover costs from flat buyers, supported by legal precedents. The Departmental Representative supported the penalty imposition, citing relevant court decisions. However, the Tribunal carefully considered the contentions. The audit report indicated that certain expenses were due to project conclusion and inability to recover amounts from parties like M/s. Titan Industries. The Tribunal found that the mistakes in the project account were acknowledged by the appellant, leading to corrections. Consequently, the Tribunal deemed the penalty uncalled for and quashed it. Regarding the discrepancy in dates between the penalty order and approval, the Tribunal noted that restoring the case to the point of irregularity would only result in an extra proceeding. The Tribunal considered the proximity of dates and the possibility of oversight by the Assessing Officer, leading to the decision to allow the appeal in part. In conclusion, the Tribunal ruled in favor of the appellant, quashing the penalty imposition under section 271(1)(c) of the Income-tax Act. The Tribunal also addressed the issue of discrepancies in dates between the penalty order and approval, deciding against remanding the case for further proceedings. The decision highlights the importance of accurate assessment and procedural compliance in penalty imposition cases under tax laws.
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