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2021 (7) TMI 806 - HC - Income TaxPenalty imposed u/s 271AAB - undisclosed income had been found in the course of search conducted u/s 132 on different person - ITAT held that penalty cannot be invoked u/s.271AAB in a case where the partner of assessee firm admitted unaccounted income u/s.132(4) during the search, wherein the assessee firm was covered by survey operation u/s.133A as consequent to search operation? - HELD THAT:- No penalty under Section 271AAB of the Act may be imposed where search under Section 132 of the Act has not been conducted against the assessee. It is admitted no search under Section 132 of the Act had been conducted in the premises of the assessee-firm. On the other hand, in the course of search under Section 132A of the Act against M/s.N.S. Vaishno Devi Developers (India) Pvt. Ltd, statements of partners of the firm were recorded and pursuant thereto notice under Section 153C of the Act was issued upon the assessee-firm. When return of income is filed in response to notice under Section 153C of the Act by a person other than the penalty who has not been searched in execution of warrant under Section 132 of the Act penalty under Section 271AAB of the Act cannot be imposed. Notice under Section 153C of the Act is incidental the search proceedings under Section 132 thereof and cannot be a foundation to impose penalty on the assessee who has not been searched. The view has been consistently followed by various benches of the Tribunal, as aforesaid, and has become binding on the Department in those cases. No contrary view either of any High Court or the Apex Court has been placed before us. In the light of the settled proposition of law that Section 271AAB of the Act cannot be invoked to impose penalty when search has not been conducted under Section 132 of the Act against the assessee and return of income is in response to notice under Section 156C of the Act which is a consequential or incidental proceeding, we are of the opinion no question of law much less a substantial one is made out in the facts of the case. Decided in favour of assessee.
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