TMI Blog2018 (2) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) on 29/11/2013. In this view of the matter, we are of the considered view that the material date, in reference to which limitation has to be considered, is 29/11/2013 and, therefore, the order passed by the Assessing Officer in levying the penalty is within the period of limitation prescribed under the law. Imposition of penalty u/s 158BFA(2) - Held that:- Assessing Officer has not brought out any appropriate reason for levy of penalty. There is a clinching evidence to demonstrate that source of KVPs is explained through Will executed by the grandfather. The assessee could not foresee that investment disclosed in the Will of his grandfather and investment made according to the wishes expressed by his grandfather under the Will cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by limitation. 4. The brief facts with regard to the legal issue are that the original proceedings under section 158BC of the Act were concluded by the Assessing Officer on 30/3/2001, against which assessee s appeal was decided by the ld. CIT(A) on 3/4/2006. Against the order of the ld. CIT(A), assessee as well as the Revenue preferred appeals before the Tribunal, which cross-appeals were decided by the Tribunal vide order dated 6/7/2007 whereby though the appeals (specially that of the appellant) were allowed for statistical purposes, but certain issues were set aside to the file of the Assessing Officer. In pursuance to the order of the Tribunal, the Assessing Officer recomputed the income of the assessee on 30/12/2008, against which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation for levying the penalty under section 158BFA(2) of the Act. Undisputedly, the law itself permits the Assessing Officer to keep levy of penalty in abeyance till appeal proceedings are decided by the ld. CIT(A) or by the ITAT. The undisputed fact is that ITAT vide its order dated 6/7/2007 has restored the matter to the file of the Assessing Officer to decide about the undisclosed income of the assessee in block period in accordance to certain directions/findings. Passing of such directions and restoring the matter to the Assessing Officer clearly means that all the earlier proceedings of assessment have gone into limbo. Till the order is passed afresh by the Assessing Officer in the proceedings restored by the Tribunal to him, the very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 12,71,000/- (including KVPs of ₹ 5,61,000/- already encashed earlier) were found in the Sub-post Office, Kidwai Nagar, Kanpur. These KVPs were found in the name of family members of the assessee in joint names with different permutations and combinations. An assessment order under section 158BC(C) of the Act dated 30/3/2001 was passed by the DCIT, CC-III, Kanpur assessing the undisclosed income of the assessee at ₹ 12,85,590/-. The assessee preferred an appeal before the ld. CIT(A)-I, Kanpur, who passed an order on 3/4/2006 giving directions to calculate the investment in KVPs and interest earned thereon according to the names appearing on the KVPs instead of the distribution suggested in the Will of the Late Shri Baikun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l relief and this shows genuineness of ground and all other additions on account of technicalities involved in filing of income tax return of block assessment period and the Tribunal never rejected the submission of the assessee that assessee has filed his return and details of his investment in KVPs and income from salary and interest accrued on KVPs before the date of search and this acceptance of ITAT, Lucknow Bench proves that assessee is bona-fide and assessee and his family members made investment in KVPs as per Will of their grandfather in good faith. The assessee further submitted that in the Will itself, it is clear that all the KVPs were given as gift by the grandfather of the assessee to the assessee and to other family members. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Bombay High Court in the case of CIT Vs. Dodsal Ltd., 218 CTR 430 (Bombay) has held that section 158BFA(2) of the Act provides discretion to the Assessing Officer for levy of penalty and what is to be examined is whether there exists appropriate reason for levy of penalty. The fact that addition has been confirmed in the quantum proceedings would not by itself be the basis for sustaining the penalty under section 158BFA(2) of the Act. In the case of the assessee, certain KVPs were found in the course of search. The Department has already accepted the KVPs in the name of the grandfather of the assessee who has mexecuted a Will. We have perused the Will and we found that, as written therein, the KVPs have been given by the grandfather to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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