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2010 (1) TMI 777 - AT - Income TaxPenalty under section 271(1)(c) - sick industrial company and for the year under consideration the actual production was NIL - AO was of the opinion that in order to avail deprecation asset must be used for the purpose of business during the relevant assessment year. Assessee's explanation is that though there was no production in the particular year but assets were kept ready for use and assessee undertook trading - Held that:- An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation, assessee's conduct cannot be said to be contumacious so as to entail levy of penalty under section 271(1)(c), Appeal allowed.
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