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2022 (4) TMI 111 - AT - Income TaxPenalty u/s 271(1)(c) - AO disallowed the claim of exemption u/s 54F of the Act on the basis that the investment in the new property was made beyond the due date of filing of return of income u/s 139(1) of the Act and also that assessee had merely booked the flat which was yet to be completed to get the possession - HELD THAT:- The Bench is of firm view that the foundation of issuing show cause notice for penalty u/s 271(1)(c) being crumbled by a verdict of this Tribunal, by deletion of additions, the penalty order alone cannot stand by its own against the assessee. The Hon’ble Allahabad High Court in the cases of Shadiram Balmukand [1971 (2) TMI 16 - ALLAHABAD HIGH COURT] and Dwarka Prasad Subhas Chandra[1972 (1) TMI 40 - ALLAHABAD HIGH COURT] and the Hon’ble Gujarat High Court in the case of Lakkdhir Lalji [1971 (9) TMI 33 - GUJARAT HIGH COURT] have also held that when the original basis of initiation of the penalty proceeding is altered or modified by the appellate authority, the authority initiating the penalty proceedings has no jurisdiction thereafter to proceed on the basis of the findings of the appellate authority. The Hon’ble Supreme Court in the case of K.C. Builders vs. ACIT [2004 (1) TMI 7 - SUPREME COURT] has made it crystal clear that where the additions made in the Assessment Order, on the basis of which penalty for concealment was levied, are deleted, by ITAT or otherwise, the penalty cannot stand by itself and is liable to be cancelled. - Decided in favour of assessee.
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