Loading ITAT cases…
3 orders · Page 1 of 1
The Tribunal held that penalty under Section 271(1)(c) is not leviable when the issue is debatable, as evidenced by differing opinions among tax authorities and the admission of a substantial question of law by the High Court. The assessee had furnished documentary evidence, and the issue was considered debatable.
The Tribunal admitted the additional ground regarding the validity of the reopening notice. It was held that while some purchases were found to be bogus, disallowing 100% was not justified when sales were not doubted. The addition was restricted to 5% of the bogus purchases.
The Tribunal held that the Assessing Officer erred in passing a rectification order under Section 154 without providing the assessee with an opportunity of being heard, violating principles of natural justice. The Tribunal also noted that the AO did not examine a crucial witness as requested by the assessee.