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2021 (2) TMI 613 - AT - Income TaxPenalty u/s 271(1)(c) - deemed dividend addition - HELD THAT:- As quantum addition added by the AO with aid of section 2(22)(e) of the Act on account of deemed dividend was deleted by the ld.CIT(A) in the second round of litigation. Against this order of the ld.CIT(A), the appeal filed by the Revenue was dismissed by the ITAT on the ground that tax effect involved in this appeal was less than ₹ 50 lakhs. Thus the addition for which the assessee is being visited with penalty stands deleted by the ld.CIT(A) and confirmed by the ITAT on the ground that appeal is not maintainable. But one fact is clear that the addition stands deleted by the ld.CIT(A). We find that sub-clause (iii) of section 271(1)(c) provides mechanism for quantification of penalty. It contemplates that the assessee would be directed to pay a sum in addition to taxes, if any, payable him, which shall not be less than but which shall not exceed three times the amount of tax sought to be evaded by reason of concealment of income and furnishing of inaccurate particulars of income As quantification of the penalty is depended upon the addition made to the income of the assessee. Since in the present case, basis for visiting the assessee with penalty has been extinguished by deleting addition by the ld.CIT(A) vide order dated 24.7.2018, and the Tribunal has dismissed the appeal of Revenue the impugned penalty has no leg to stand. In other words, there is no room for the Revenue to impose penalty under section 271(1)(c) - Decided in favour of assessee.
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