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2016 (9) TMI 1376 - AT - Income TaxPenalty U/s 271(1)(c) - bogus purchases - defective notice - assessee has concealed its income and has filed inaccurate particulars of income - assessee submitted that the notice issued for penalty was vague and the necessary particulars have not been provided in the notice - separate enquiries/proceedings claim - Held that:- Sec 274 of the Act provides the procedure for imposing the penalty. A bare reading of the provision postulates that the penalty under the chapter shall not be made unless the assessee has been earned or has been given a reasonable opportunity of being heard. As noticed hereinabove in the penalty order, the assessee was called upon to file the reply, thereafter the assessee was also called upon in the personal hearing. The assessee was given opportunity to represent his case before the ld Assessing Officer at the time of finalization of penalty and after giving the reasonable opportunity to the assessee, the penalty order was passed by the ld Assessing Officer. Therefore, also, in our view, there was no violation of the procedure as laid down U/s 274 of the Act. On merit, we find that the assessee was deriving income from trading of precious and semi precious stones and in the quantum proceedings, the Assessing Officer enquired about the correctness of the purchases made by the applicant and after following a due process, the Assessing Officer enquired from the assessee about the purchases made from three parties discussed in detail in paragraph No. 1 of the assessment order, but the assessee failed to produce the parties. The Assessing Officer thereafter, tried to examine the said parties after issuing the summons but the summons returned unserved as the concerned parties were non-existent. Thereafter, the Assessing Officer made enquiries by sending the Inspector but the addresses give by the assessee was not found. Therefore, the Assessing Officer had treated the purchases as bogus and disallowed 25% of such purchases by invoking the provisions of Section 145(3) of the Act. The same was confirmed in the appeal by the ld. CIT(A). No appeal was filed before the Tribunal. Thus the separate enquiries/proceedings were not required to be conducted by the Assessing Officer at the stage of penalty as the assessee, has failed to discharge the initial onus of proving the genuineness of the parties from whom the said three bills were issued at the assessment stage or before the appellate stage. In our view, no separate proceedings were required at the stage of determining the penalty against the assessee in the penalty proceedings - Decided against assessee.
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