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2014 (6) TMI 534 - ITAT DELHIPenalty u/s 271(1)(c) of the Act – Proper reply not filed by assessee – Receipt of salary not added in income – Held that:- The additions have been accepted is no reason to come to the conclusion that the penalty necessarily has to be imposed - penalty proceedings and quantum proceedings are separate and distinct - The explanation offered by the assessee in the penalty proceedings despite there being no challenge to the addition in quantum order necessarily has to be considered on merit in the light of the matrix within which the penalty provisions are required to be examined - there is no bar to the assessee to raise a new contention argument or proposition in the penalty proceedings which has not been taken in the quantum proceedings - There can be many reasons on the basis of which the assessee may not agitate the addition however that inaction cannot be the criteria that arguments, contentions and propositions in penalty proceedings have to be smothered – thus, the matter is required to be remitted back to the CIT(A) for fresh adjudication – Decided in favour of Assessee.
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