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2021 (9) TMI 355 - AT - Income TaxMaintainability of appeal - low tax effect - exception carved out in Para 10(e) of the CBDT Circular No. 3/2018, dated 11.07.2018 - as argued issue involved in the appeal in question pertains to a penalty that was imposed u/s. 271(1)(c) of the Act in respect of addition of bogus purchases that was made on the basis of information received from the Sales Tax Authorities i.e. an external agency, therefore, pursuant to the exception carved out in Para 10 of the CBDT Circular No. 3/2018, dated 11.07.2018 the appeal was maintainable - HELD 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 addition. As is discernible from Para 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. Since the levy of penalty by no means could be construed as an addition within the meaning of Para 10(e) of the aforesaid circular, therefore, we do not find any merit in the claim raised by the revenue that the aforementioned exception carved out in the CBDT Circular No. 3/2018 (supra) would also take within its sweep penalty imposed by the A.O. under Sec. 271(1)(c) of the Act in respect of an addition of bogus purchases on the basis of an information received from Sales Tax Authorities i.e. an external agency. Accordingly, not finding any merit in the present miscellaneous application filed by the revenue, we dismiss the same.
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