The Income Tax Appellate Tribunal (ITAT), Delhi Bench held that the AO exceeded his jurisdiction in reassessing issues other than the issues in respect of which the proceedings are initiated and reasons for the initiation of those proceedings cease to survive.
The assessee, Raj Bala is an individual and filed her return of income declaring the total income. Since the return was filed beyond the time allowed of up to one year from the relevant assessment year, the same was treated as invalid. The AO issued notice under section148 of the Act.
Further, the AO mentions in the assessment order that there was an AIR information that the assessee has deposited cash amounting to Rs.10,10,000/- in her savings bank account with HSBC Bank, made payment of Rs. 6,86,000/- and Rs. 10,00,000/-were also deposited in saving bank account held jointly with Mr. Joginder Singh. The AO issued a notice under Section 143(2) and 142(1) to the assessee along with a detailed questionnaire.
The CIT(A) upheld the validity of reassessment proceedings. However, so far as the additions are concerned, the CIT(A) gave partial relief to the assessee by restricting the addition of Rs.23,10,000/- to Rs.11,66,103/- and deleting the addition of Rs.10 lakh.
The assessee in the grounds of appeal has challenged the order of the CIT(A) in partly sustaining the penalty levied by the AO under section 271(1)(c) of the Act.
The tribunal consisting of a Judicial Member Amit Shukla and the accountant member R.K. Panda deleted the various additions made by the AO and partly sustained by the CIT(A), therefore, the penalty does not survive.
Accordingly, the order of the CIT(A) partly sustaining the penalty levied by the AO under Section 271(1)(c) is set aside by the tribunal and the AO is directed to cancel the penalty.
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