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2016 (12) TMI 1236 - ITAT MUMBAIPenalty under section 271(1)(c) - disclosure of additional income towards withdrawal of exemption u/s 10AA - Held that:- The assessee disclosed additional income for ₹ 7.88 corers from assessment year 2006-07 to 2008-09 towards withdrawal of exemption u/s 10AA in respect of SEZ at Chennai but while framing the assessment the during the course of assessment proceedings the AO allowed the deduction u/s 10AA of the Act and also no discrepancy was pointed out while initiating the penalty u/s 271(1)© and even observed in the penalty order that the penalty was imposed for mere admission of assessee during the course of search action and also that the addtiuonal income was disclosed in the return filed in response to notice u/s 153C of gthe Act. In view of the facts we are of the considered opinion that the order of the ld.CIT(A) sustaining and upholding the penalty is wrong. We accordingly set aside the order of CIT(A) by allowing the appeal of the assessee and the AO is directed to delete the penalty. Levying penalty u/s 271(1)(c)instead of section 271AAA - Held that:- As search action u/s 132 of the Act was initiated after 1.6.2007,penalty u/s 271(1) (c) of the Act could not be imposed by virtue of insertion of new provisions on the statute book for levy of penalty in the case of search under section 271AAA of the Act w.e.f. AY 2007-08 and therefore the penalty as imposed by the AO and confirmed by the ld.CIT(A) has to be deleted.
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