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2023 (5) TMI 1277 - AT - Income TaxCondonation of delay - delay of 1976 days - Department launched prosecution case against the assessee on 14.05.2018 by filing a criminal case against the assessee and the Hon’ble Additional Chief Metropolitan Magistrate, Ahmedabad passed an order on the assessee u/s 279(1) - HELD THAT:- The fact of Department having launched prosecution against the assessee came to the notice of the assessee only on the month of May / June 2021 on receipt of order of Hon’ble Additional Chief Metropolitan Magistrate, Ahmedabad. The assessee was advised by his consultant to file compounding application, which was filed before Principal CCIT on 03.12.2021. However, the Principal CCIT rejected the compounding application vide order dated 12.01.2022. It was owing to the aforesaid circumstances that there was a delay of 1976 days in filing of the present appeal before ITAT. This is a fit case for condonation of delay. Accordingly, we are hereby condoning the delay of 1976 days in filing of the present appeal, in the interest of justice. Penalty u/s 271(1)(c) - Additional income on account of excess stock u/s 69B - HELD THAT:- As we are of the view that this is not a case of concealment of income and the excess stock found the case of M/s. Pankaj Textile was more or less neutralized on account of excess stock in the case of M/s. Sonal Fabrics and M/s. Mahek Impex. Further, at the time such excess stock was found by the Department, it is observed that since books of accounts were not written up to date of search, proper books stock could not be arrived at and as the physical stocks of various firms operating from the same premises were mixed, there arose a difference in the physical stocks as compared to the books stock. Accordingly, looking into the facts of the instant case we are of the considered view that at this is not a fit case for levy of penalty under Section 271(1)(c) of the Act. Accordingly, we are hereby directing that the levy of penalty under Section 271(1)(c) of the Act be set-aside. Appeal of the assessee is allowed.
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