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2012 (11) TMI 396 - AT - Income TaxPenalty u/s. 271(1)(c) - excess deduction u/s. 80HHC - Held that:- As decided in CIT vs. S. Dhanabal [2008 (8) TMI 15 - HIGH COURT DELHI] in respect of penalty imposed for disallowance u/s. 80HHE that explanation offered by appellant is bona fide since appellant claimed deduction on the basis of auditor as per statutory requirement and further appellant disclosed all material facts, hence penalty is not applicable. As decided in U.O.I. vs. Dharmendra Textiles Processors [2008 (9) TMI 52 - SUPREME COURT] at penalty proceedings are separate than assessment proceedings and in the case of Income tax proceedings, these penalty proceedings are not automatic. Since issue involved for disallowance is debatable hence penalty cannot be imposed - in favour of assessee.
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