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2013 (10) TMI 105 - HC - Income TaxPenalty u/s 271(1)(c) of the Income Tax Act - Additions made by the AO was deleted by the ITAT - it is the case on behalf of the Revenue that though the revenue was aggrieved by the decision of the ITAT in quantum appeal because of the low tax effect, the Revenue did not challenge before the High Court. Held that - the aforesaid stand has not been substantiated by the Revenue. No penalty - Decided against the Revenue.
Issues:
1. Challenge to the impugned judgment and order passed by the ITAT regarding the penalty imposed under Section 271(1)(c) of the Income-tax Act, 1961. 2. Assessment proceedings based on a search action under section 132 of the IT Act. 3. Addition of Rs. 30.93 lacs in the total income of the assessee and initiation of penalty proceedings. 4. Appeal before CIT(A) against penalty order and subsequent appeal before ITAT. 5. Deletion of quantum addition by ITAT and its impact on penalty proceedings. 6. Question of law raised by the Revenue regarding the deletion of penalty by ITAT. Analysis: 1. The High Court of Gujarat heard a tax appeal challenging the ITAT's decision on a penalty imposed under Section 271(1)(c) of the Income-tax Act, 1961. The ITAT had dismissed the Revenue's appeal, confirming the CIT(A)'s order setting aside the penalty. The case stemmed from assessment proceedings following a search action under section 132 of the IT Act, involving seized cheques and undisclosed income. 2. During the search, cheques were seized from M/s. Om Shivam Corporation, leading to assessment proceedings and the addition of Rs. 30.93 lacs in the assessee's total income. The AO initiated penalty proceedings under section 271(1)(c) for alleged concealment of income. The CIT(A) initially upheld the penalty, but the ITAT later set it aside based on the deletion of the quantum addition in a separate appeal. 3. The Revenue challenged the ITAT's decision, arguing that the penalty should not have been deleted solely based on the quantum addition deletion. The High Court analyzed the facts, including the ITAT's reasoning for deleting the addition. The ITAT found no evidence supporting the AO's presumption of cash settlement based on the seized cheques, leading to the deletion of the addition. 4. The High Court upheld the ITAT's decision, stating that no error or illegality was committed in quashing the penalty order. The Court noted that the ITAT's decision was based on a lack of evidence and unjustified additions, supporting the deletion of the penalty. As no substantial question of law arose, the Court dismissed the Revenue's appeal. This detailed analysis covers the issues involved in the legal judgment comprehensively, outlining the sequence of events and the reasoning behind the decisions made by the authorities and the High Court.
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