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2021 (8) TMI 921 - ITAT MUMBAIMaintainability of appeal - low tax effect - Penalty u/s 271(1)(c) - Estimation of income on bogus purchases - whether addition is based on information received from external sources in the nature of law-enforcement agencies namely Sales Tax Authorities? - scope of CBDT Circular no 17/2019 dated 08.08.2019 r.w Circular No. 3/2018 dtd. 11/07/2018 as amended on 20.08.2018 - HELD THAT:- Admittedly, it is a settled position of law that quantum proceedings and penalty proceedings are independent and distinct proceedings and confirmation of an addition cannot on a standalone basis justify imposition/upholding of a penalty u/s 271(1)(c) of the Act. Adopting the same logic, we are of the considered view that unless a specific exception is provided in the circular w.r.t penalty also, it could by no means be construed that penalty was to be treated at par with the quantum additions. discernible from Clause 10(e) of the aforesaid CBDT Circular No. 3/2018 (as amended on 20.08.2018), the same applies only to additions which were based on information received from external sources. As noticed by us hereinabove, since the levy of penalty by no means could be construed as an addition within the meaning of Clause 10(e) of the aforesaid circular, therefore, we do not find any merit in the contentions advanced by the ld. D.R that the aforesaid exception carved out in the CBDT Circular No. 3/2018 (supra) would also take within its realm a penalty imposed under Sec. 271(1)(c) w.r.t the additions made by the A.O towards bogus purchases on the basis of information received from Sales Tax Department, i.e an external agency. Accordingly, we are of the considered view that the appeal of the revenue is covered by the CBDT Circular No. 17/2019, dated 08.08.2019, and thus, in our considered view is not maintainable. - Decided against revenue.
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