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2017 (11) TMI 1831 - AT - Income TaxLevy of penalty u/s 271(1)(c) - addition on account of cash deposits treating the same as unexplained - HELD THAT:- In the present case the explanation offered by the assessee in quantum proceedings could not be adequately substantiated by him but this fact alone would not automatically lead to the levy of penalty. Penalty proceedings being separate and distinct from assessment proceedings the assessee is entitled to give all possible explanations in support of his contentions. As observed earlier by us, the findings in quantum proceedings will not operate as res judicata. The assessee cannot be stopped from raising new contentions which he had not raised in quantum proceedings. CIT(Appeals), in the present case, we hold, ought to have considered the alternate explanation given by the assessee regarding the source of cash deposited in his bank, before adjudicating on the levy of penalty. We, therefore, consider it fit to restore the matter back to the file of the CIT(Appeals) to consider the explanation offered by the assessee and thereafter decide the issue in accordance with law. We may add that the assessee be given due opportunity of hearing in this regard. Appeal of the assessee stands allowed for statistical purposes
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