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2019 (9) TMI 49 - AT - Income TaxPenalty levied u/s 271(1)(c) - Rejection of books of accounts - AO completed the assessment by applying net profit rate @ 8% to work out the income in the hands of the assessee - HELD THAT:- On perusal of the assessment order passed for the instant assessment year reflects no such satisfaction has been recorded. In the absence of the same, the assessee was not in a position to meet the requirements of the section. Merely, an order issuing notice u/s 274 r.w.s 271(1)(c) do not meet the conditions of the said initiation of penalty proceedings. In the absence of the same, there is no merit in the penalty order passed in the case. In this regard, we find support from the ratio laid down in the case of CIT Vs. Shri Samson Perinchery [2017 (1) TMI 1292 - BOMBAY HIGH COURT] AO had levied the penalty both for concealment of the particulars of income and furnished inaccurate particulars of income. AO thus failed to come to any conclusion as to which limb of the said section has not been fulfilled by the assessee. In the absence of the same, we find no merit in the order passed by the AO in this regard. For this, we place reliance on the decision of Pune Bench of the Tribunal in the case of Kanhaiyalal D. Jain Vs. ACIT [2016 (12) TMI 1238 - ITAT PUNE] Even on merits where the income has been estimated in the hands of the assessee by applying net profit rate, there is no merit in the levy of the aforesaid penalty for concealment. Where there is only an estimation of income in the hands of the assessee, there is no merit in the aforesaid levy of penalty for concealment. We find support from the ratio laid down in CIT vs Aero Traders P.Ltd. [2010 (1) TMI 32 - DELHI HIGH COURT] . Accordingly, we direct the AO to delete penalty levied u/s 271(1)(c) of the Act.- Decided in favour of assessee.
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