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2022 (2) TMI 816 - AT - Income TaxPower of AO to levy penalty when the matter was considered by the settlement commission - Proceedings with by Hon'ble ITSC u/s.245D(1) and 245D(2C) - Rectification order u/s 154 levying penalty u/s 271AAC - assessee had filed a petition before the ITSC on 05.12.2019 which stood admitted and allowed to be proceeded with u/s 245D(1) by the ITSC - HELD THAT:- Wherein an application made u/s 245C has been allowed to be proceeded with u/s 245D, then the ITSC shall, until and unless an order is passed under sub-section (4) of section 245D, subject to the provisions of section 245D(3), the exclusive jurisdiction to exercise powers and perform the functions of an income-tax authority under this Act lies with ITSC. This proposition has been reiterated by the Hon’ble Delhi High Court in the case of M/s. Omaxe Limited [2014 (5) TMI 147 - DELHI HIGH COURT] Once that is so, then AO did not had any jurisdiction to initiate or levy penalty u/s 271AAC. CIT (A) should have held that the penalty order itself is without jurisdiction and infructuous but instead held that the CIT (A) does not have any jurisdiction. Since AO did not have any jurisdiction to pass any order or levy any penalty on the same matter which is sub-judice before the ITSC then impugned order dated 27.01.2020 levying penalty is quashed as infructuous. On this ground alone, the appeal of the assessee is allowed and the penalty is deleted.
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