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2021 (9) TMI 1370 - AT - Income TaxPenalty u/s 271(1)(c) - Bogus purchases - assessee has failed to substantiate the transactions claimed in its return of income thereby evaded taxes to that extent - CIT-A deleted the penalty levy - HELD THAT:- Disallowances has been made on an estimated basis on account of the non production of suppliers before the AO. The purchase vouchers were duly produced and the payments were through banking channel. In these backgrounds, in our considered opinion assessee cannot be visited with the rigours of penalty u.s 271(1)(c). As a matter of fact, on many occasions, on similar circumstances in quantum proceedings, the disallowance itself has been deleted. In our considered opinion, on the facts and circumstances of the case assessee cannot be said to have been guilty of concealment or furnishing of inaccurate particulars of income. In this regard, we draw support from the decision of the State of Orissa [1969 (8) TMI 31 - SUPREME COURT] where in it was held that the authority may not levy the penalty, if the conduct of the assessee is not found to be contumacious. Tax effect in this case is below the limit fixed by CBDT for filing appeals before ITAT. The revenue has tried to make out a case that since the addition was made pursuant to information from Sales tax department, this penalty appeal falls in the exception carved out in the CBDT circular regarding appeals arising out of additions made pursuant to information from outside agencies. We are of the opinion that this plea is not tenable inasmuch as once revenue accepts that penalty is levied on outside agency information, the penalty levied will have no legs to stand. We delete the levy of penalty - Decided in favour of assessee.
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