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2018 (8) TMI 1887 - AT - Income TaxReassessment u/s 153(2A) - whether the time limit prescribed as per Sec.153(2A) of the Act or as per Sec.153(3) of the Act would be applicable for passing the order pursuant to the orders of the Tribunal? - HELD THAT:- We find that the Hon’ble Delhi High Court in the case of Nokia India (P) Ltd., [2017 (9) TMI 1298 - DELHI HIGH COURT] has held that there is a distinction between “assessment” that is set aside and an “assessment order” being set aside. It has held that when the assessment on an issue is set aside and the matter is remanded with a direction that the issue has to be determined afresh, provisions of Sec.153(2A) of the Act get attracted. It has further held that for applicability of Sec.153(2A) of the Act, it is not necessary that the entire assessment order should be set aside. The aforesaid decision of Agra Bench of the Tribunal was followed by the Pune Co-ordinate Bench of the Tribunal in the case of Standard Meters Manufacturing Company [2011 (11) TMI 691 - ITAT PUNE] wherein it has held that merely because the entire assessment cannot be cancelled or set aside by the Tribunal, it would not come outside the purview of the time limit prescribed for completion of an assessment or reassessment u/s 153(2A) In view of the aforesaid facts and following the decision of Hon’ble Delhi High Court in the case of Nokia India (P) Ltd. [2017 (9) TMI 1298 - DELHI HIGH COURT] , we are of the view that Ld.CIT(A) has rightly held that provisions of Sec.153(2A) of the Act was applicable to the present facts and the AO was therefore supposed to pass fresh assessment order within one year from the end of financial year in which the order of the Tribunal was received by Ld.CIT and therefore, the order passed by AO on 07.11.2014 was barred by limitation. Thus, the grounds of Revenue are dismissed. Levy of penalty u/s 271(1)(c) - HELD THAT:- The perusal of assessment order passed u/s 143(3) of the Act reveals that in the assessment order AO had recorded satisfaction for furnishing of inaccurate particulars of income. Thereafter, in the penalty order passed u/s 271(1)(c) of the Act, AO had levied penalty for concealing the particulars of income. It is a settled law that while levying penalty for concealing of particulars of income, the AO has to record satisfaction and thereafter come to a finding in respect of one of the limbs, which is specified under section 271(1)(c) of the Act. The first step is to record satisfaction while completing the assessment as to whether the assessee had concealed its income or furnished inaccurate particulars of income. Thereafter, notice u/s 274 r.w.s. 271(1)(c) of the Act is to be issued to the assessee. The Assessing Officer thereafter has to levy penalty under Section 271(1)(c) of the Act for non-satisfaction of either of the limbs. While completing the assessment, the Assessing Officer has to come to a finding as to whether the assessee has concealed its income or furnished inaccurate particulars of income. The Hon’ble Bombay High Court in CIT Vs. Shri Samson Perinchery [2017 (1) TMI 1292 - BOMBAY HIGH COURT] held that where initiation of penalty is one limb and the levy of penalty is on other limb, then in the absence of proper show cause notice to the assessee, there is no merit in levy of penalty. In the light of the decision of Hon’ble Bombay High Court in the case of Samson Perinchery (supra), we are of the view that in the present case, the basic condition for levy of penalty has not been fulfilled and that the penalty order suffers from non-exercising of jurisdiction power and therefore penalty order cannot be upheld. We accordingly set aside the penalty order passed by AO. Thus, the ground of assessee is allowed.
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