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2021 (8) TMI 113 - AT - Income TaxPenalty u/s 271(1)(c) - disallowance of 20% on account of bogus purchases - Monetary limit for filing appeal - 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 - HELD THAT:- Disallowance has been made on an estimated basis on account of the non-production of suppliers before the Assessing Officer. The purchase vouchers were duly produced and the payments were through banking channel - assessee cannot be visited with the rigours of penalty under section 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 Hindustan Steel Ltd., vs. 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. As 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. In the background of aforesaid discussion and precedent, we uphold the order's of Ld CIT(A) and delete the levy of penalty. - Decided in favour of assessee.
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