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2015 (5) TMI 902 - AT - Income TaxPenalty u/s 271(1)(c) - as no documents in support of any meetings set up with the M/s Mavel Manufacturing Inc. was placed on record the CIT(A) confirmed the penalty order - Held that:- CIT(A) has not even cared to address the fact that M/s Mavel Manufacturing Incorporation was a customer of the assessee and not a supplier. It is further seen that the export sales of the assessee have increased over the years which to some extent can be said to be on account of continued customer satisfaction and the rationale though not being good enough for quantum proceedings can be a relevant argument in the penalty proceedings in the peculiar nature of assessee's business. We note that no doubt the claim put forth by the assessee was not allowed however it cannot be said considering the judicial precedent cited that there was any filing of inaccurate particulars or non-disclosure on the part of the assessee. It is merely a case of claim not allowed. It is also seen that in the peculiar facts and circumstances of the case, the penalty has been imposed and upheld purely on account of the findings arrived at in the quantum proceedings which is not the mandate of law. The explanation offered by the assessee in the penalty proceedings has to be considered independently and judiciously and only thereafter a finding has to be recorded. This exercise is found missing both in the penalty order as well as the impugned order. Thus impugned order is set aside and by allowing the appeal of the assessee, the penalty order is quashed. - Decided in favour of assesse.
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