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2015 (11) TMI 1385 - AT - Income TaxPenalty u/s 271(1)(c) - Held that:- A perusal of sub-clause (iii) of section 271(1)(c) would indicate that in case an addition is being made to the income of an assessee, and it is established that the assessee has concealed or furnished inaccurate particulars qua that addition, then apart from tax to be payable by the assessee, he would pay an amount equivalent to the tax or three times of the tax as penalty under section 271(1)(c) of the Act. Meaning thereby, the penalty would be computed equivalent to the tax sought to be evaded by the assessee on the additions made to his income for which he has held guilty of concealment of income or furnishing of inaccurate particulars of income. In the present case, the moment, assessment order has been set aside by the ITAT, the very addition on which the amount of tax sought to be evaded was to be calculated, has been extinguished. Therefore, the assessee cannot be charged with allegation that he has concealed particulars or furnished inaccurate particulars on the additions which made to his income. In the set aside assessment order, it is yet to be decided whether any addition is to be made to the income of the assessee or not. It will be in the discretion of the AO to initiate or not initiate penalty proceedings after passing the fresh assessment order. Therefore, in the present proceedings penalty is not sustainable upon the assessee. We set aside both the orders and quash the imposition of penalty. It will be in discretion of the AO to initiate or not to initiate penalty after passing fresh assessment order in pursuance of the Tribunal’s order - Decided in favour of assessee.
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