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2019 (2) TMI 812 - AT - Income TaxPenalty under section 271AAA - assessee has not substantiated the manner of earning of income - The assessee’s responses to this is that neither any question in this regard was raised during search nor it is an issue of source of income as the item discovered were only certain jewellery - Held that:- We find that the conduct of the assessee in this case is not contumacious so as to warrant levy of penalty. We further place reliance from the Apex Court decision rendered in the case of Hindustan Steel Ltd. vs. State of Orissa [1969 (8) TMI 31 - SUPREME COURT] wherein it was held that "An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act, or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute. Accordingly, we set aside the orders of the authorities below and delete the levy of penalty. - Decided in favour of assessee.
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