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2021 (9) TMI 512 - AT - Income TaxValidity of penalty proceeding has been initiated and culminated into imposition of penalty u/s 271(1)(c) - initiation of penalty proceeding u/s 271(1)(c) in respect of an undisclosed income as referred under sub-Section 1 of Section 271AAA - HELD THAT:- As during search proceedings initiated u/s 132 of the Act on 15.09.2009 i.e. on or after 01.06.2007 but before 01.07.2012 - admittedly the appellant’s case coming under the purview of the statutory provision of Section 271AAA - Section 271AAA (3) specifically prohibits initiation of penalty proceeding u/s 271(1)(c) in respect of an undisclosed income as referred under sub-Section 1 of Section 271AAA. Impugned penalty proceeding has been initiated and culminated into imposition of penalty u/s 271(1)(c) but the same has been explicitly prohibited by the provision of sub-Section 3 of Section 271AAA particularly where undisclosed income has been found during the search proceeding. This provision left no space for confusion or doubt in barring the AO to assume jurisdiction to levy penalty u/s 271(1)(c) - in the present facts and circumstances of the case the very initiation of penalty proceeding under Section 271(1)(c) is contrary to the statutory provision, palpably bad and not maintainable in the eye of law - taking into consideration the entire aspect of the matter we find that initiation of the penalty proceeding is erroneous and is not sustainable. Thus, the same is hereby quashed. - Decided against revenue.
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