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2019 (6) TMI 592 - ITAT MUMBAIPenalty levied u/s 271(1)(c) - excess claim of deduction u/ s. 35(2AB) - revising the claim of deduction in the revised computation of Income, thereby indicating deliberate filing of inaccurate particulars of income - HELD THAT:- Case do not justify the imposition of penalty as the AO has neither recorded its satisfaction about the deliberate and intentional act of the assessee, nor recorded satisfaction about the concealment of particular of income or furnishing inaccurate particular of income nor specified the specific charge while issuing notice u/s 274 r.w.s. 271(1)(c). The notice issued by the AO is itself invalid. AO has not filed even single documentary evidences to substantiate its grounds of appeal. The ld CIT(A) deleted the penalty holding that the notice under section 274 rws 271(1) was not valid, the assessing officer not bothered to bring on record the copy of the said notice. The assessing officer invoked the provision of Explaination-1 of section 271(1) and recorded that the assessee despite giving the opportunity has failed to offer any explanation. On the contrary the AO himself in para 2 of the penalty order dated 29.08.2016 duly recorded that the assessee filed its reply dated 09.08.2016 received in his office on 24.08.2016. The contents of the reply is also refereed by him in the order itself. Therefore, no infirmity or illegality in the order passed by ld CIT(A), which we affirm. Assessee has not filed cross objection to support the order of ld CIT(A) on merit, yet argued that the assessee has good case on merit and relied on the decision of CIT Vs Amoli Organics P. Ltd [2014 (4) TMI 1245 - GUJARAT HIGH COURT] that mere denial of claim under section 35(2AB) would not lead to levy of penalty u/s 271(1)(c). Therefore, in view of the facts that the submissions of the ld AR for the assessee are purely legal in nature, thus, needs consideration. The Hon’ble High Court held that in the scrutiny assessment u/s 143(3) the assessee withdrew such claim since it failed in such challenged before CIT(A) by them. If the expenses incurred genuinely had been claimed in the return of income, rejecting the claim may not result in to penalty proceedings nor would the withdrawal of claim is scrutiny proceedings in the said circumstances can be said to be concealment. - Appeal of the revenue is dismissed.
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