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2011 (8) TMI 511 - HC - Income TaxAddition - Penalty - Reassessment u/s 147 - Clarifications to the Board's Circulars No. 423 dated 26.6.85 and 432, 439, 440 and 441 dated 15.11.1985 and further Board's Circular No. 451 dated 17.2.1986, the surrendered amount of Rs. 3,15,000/- could not be considered for the purpose of levy of penalty u/s 27(1)(c) of the Act - So far as the other addition of Rs. 35,000/- made in the asstt. Order which has also been made the basis for levy of penalty, even that addition does not survive in view of the ld. ITAT having deleted the same - Once the penalty is deleted, the basis for criminal proceedings goes and the continuation of the criminal proceedings on the basis of the said penalty would be nothing but an abuse of process of law - Amnesty scheme was introduced and the petitioners availed benefit of the same and had surrendered the amount of Rs. 3,15,000/- by furnishing revised return on 27.3.1986 and had paid the tax accordingly on the said amount. The addition of Rs. 35,000/- made in the assessment order was made on the basis of levy of penalty and since the penalty had been deleted, the said addition was also liable to be ignored - Decided in favour of assessee.
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