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2017 (6) TMI 1147 - AT - Income TaxEstimation by Valuation Officer - validity of assessment - Held that:- As law stood as on this assessment years under consideration, Section 142A cannot be applied and no reliance can be placed on that provisions for these assessment years. Consequently, the assessments framed on the said DVO’s report cannot be upheld. In view of this, we are inclined to annul these assessments for all these three assessment years which is wholly based on DVO’s report which was obtained under Section 142A of the Income Tax Act. Accordingly, all the three appeals for assessment years 1995-96, 1996-97 & 1997-98 are allowed. Since we have quashed the assessments itself, we are not going into the other arguments and grounds raised by the assessee as well as by department in these appeals. Levy of penalty u/s 271(1)(b) - Held that:- The assessment order for the year under consideration was passed with the participation of the assessee’s counsel. Further, the penalty was levied for non- reply of notice dated 03-01-2006 posting the case for hearing on 16-01-20016. However, there is no reference of assessee’s failure to comply with this notice in the assessment order. Thus, it leads to conclusion that the assessing officer was able to complete the assessment u/s 143(3) though assessee has not complied this notice and no prejudice caused to A.O. In our opinion, it is not appropriate to levy penalty mechanically for such technical breach of provisions of the act. Accordingly, we are of the opinion that this is not a fit case to levy penalty u/s 271(1)(b) of the act and we delete the penalty levied under Section 271(1)(b) of the Act by assessing officer and confirmed by the CIT(A).
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