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2010 (4) TMI 208 - HC - Income TaxBlock Assessment – penalty - The assessee filed a return for the block period from 1st April 1988 to 22nd December 1998 and declared an undisclosed income of Rs.65 lakhs. The assessment was completed under Section 158BC and the Assessing Officer accepted the returned income. - Penalty proceedings were initiated under Section 158BFA(2) - The Assessing Officer imposed a penalty in the amount of Rs.42.90 lakhs - While holding that the assessee had not complied with the conditions stipulated in the first proviso to Section 158BFA(2), the Assessing Officer held that since the assessee had preferred an appeal against the assessment of income which was shown for the block period, she had not fulfilled the fourth condition laid down in the first proviso to Section 158 BFA(2). On the basis of this, the Assessing Officer held that the assessee was liable to be penalized and proceeded to impose the penalty. – Held that: it is an admitted position before the Court that the assessee filed an appeal to the Commissioner (Appeals) against the order of block assessment on the ground that the rate of tax payable in respect of capital gains was not 60%, but 20%. As a result of the filing of the appeal, the assessee failed to comply with clause (iv) of the first proviso to Section 158BFA(2). As a result, the assessee was not entitled to the benefit of the prohibitory provision contained in subsection (2) of Section 158BFA. – Order of ITAT set aside – penalty confirmed.
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