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2023 (11) TMI 842 - ITAT CHANDIGARHPenalty u/s 271(1)(c) - non-recording of satisfaction in the assessment order for initiation of penalty - income of the assessee was assessed at 1% as presumed that the assessee has done the business of providing accommodation entries by bogus bills of sale and purchase - HELD THAT:- As noted that the AO has rejected the books of accounts as the assessee failed to produce the same for verification and thereafter, a presumption has been drawn that the assessee has provided accommodation entries by way of bogus bills of purchase and sales and thereafter, on the declared turnover of Rs 10 crores, the AO has estimated income at the rate of 1% of the gross receipts and after giving credit for income declared in the return of income, has made an addition and it has been stated that the penalty proceedings u/s 271(1)(C) are being initiated separately for furnishing inaccurate particulars of income. We therefore find that there is no prima facie satisfaction which has been recorded by the AO for initiation of penalty proceedings which can be discerned from reading of the assessment order. There is no direction for initiation of penalty proceedings and merely addition has been made to the returned income on a presumptive basis which is not sufficient for acquiring jurisdiction as contemplated by the provisions of section 271(1B) of the Act. Appeal of the assessee is allowed.
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