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That the charge that the assessee is found to be owner of income based on entries in certain loose papers not disclosed before the date ofsearchnot been satisfied, the levy of penalty cannot be held justified and deserve to be set-aside.

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Section 271(1)(c) of the Income Tax Act, 1961- Penalty - Concealment Penalty - Quantum and penalty proceedings are independent proceedings and while levying penalty, the provisions have to be read strictly.

Facts: Assessee had appealed against the levy of penalty before CIT(A) who has confirmed the levy of penalty U/s 271(1)(c) for the AY 2008-09 to 2012-13 vide his consolidated order dated 06.10.2017 and separately has confirmed the levy of penalty U/s 271AAB of the IT Act earlier vide his order dated 06.02.2017 for the assessment year 2013-14.

Held, that the fact that assessee has declared the amount so surrendered in his individual return of income and have paid taxes thereon and the fact that the Revenue has also accepted the same, the same might be true as far as the quantum proceedings are concerned and which has now attained finality, however, when it comes to penalty proceedings, it is a settled legal proposition that the quantum and penalty proceedings are independent proceedings and while levying penalty, the provisions have to be read strictly and only where the charge against the assessee is clearly established and the conditions specified therein are satisfied, the penalty can be levied. In the instant case, we therefore find that the charge that the assessee is found to be owner of income based on entries in certain loose papers not disclosed before the date of search not been satisfied, the levy of penalty cannot be held justified and deserve to be set-aside. - LAXMAN NAINANI V/s DEPUTY CIT - [2020] 80 ITR (TRIB) 001 (ITAT-JAIPUR)