TMI Blog2016 (5) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... ached by the ITAT. Once the assessment order of the AO in the quantum proceedings was altered by the CIT (A) in a significant way, the very basis of initiation of the penalty proceedings was rendered non-existent. The AO could not have thereafter continued the penalty proceedings on the basis of the same notice. Also, the Court concurs with the CIT (A) and the ITAT that once the finding of the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. By the impugned order the ITAT affirmed the order of the Commissioner of Income Tax (Appeals) [CIT(A)] deleting the penalty imposed by the Assessing Officer ( AO ) under Section 271(1)(c) of the Income Tax Act, 1961 ( Act ). The ITAT has in the impugned order noted that in the appeal filed by the Assessee in the quantum proceedings against the order of the AO making addition on account of bogus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, therefore the penalty could not be deleted. He further submitted that the ITAT was in error in holding that the AO was denuded of the power to initiate penalty proceedings once the CIT (A) had deleted the additions made by the AO in the original assessment proceedings. According to him, the CIT (A) had merely modified the order of the AO. 5. The Court notes that in the quantum proceedings o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having disappeared with the deletion by the CIT (A) of the addition made by the AO, the latter continued with the penalty proceedings and imposed the penalty as noted above. This was set aside by the CIT (A). The Revenue then went in appeal before the ITAT which by the impugned order affirmed the order of the CIT (A). Relying on the decision of the Calcutta High Court in CIT v. Ananda Bazar Patrik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the same notice. Also, the Court concurs with the CIT (A) and the ITAT that once the finding of the AO on bogus purchases was set aside, it could not be said that there was any concealment of facts or furnishing of inaccurate particulars by the Assessee that warranted the imposition of penalty under Section 271 (1) (c) of the Act. 8. No substantial question arises for determination. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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