The Kolkata bench of Income Tax Appellate Tribunal (ITAT) held that the penalty under section 271AAB Income Tax Act, 1961 should not be levied if the search under section 153A Income Tax Act, 1961 is not conducted in premises of assessee.
The assessee Jorbagh Tea Company filed an appeal against the order of Commissioner of Income Tax (Appeals) confirming the penalty of Rs.10,01,500 imposed by the Assessing Officer (AO) under the Section 271AAB of the Income Tax Act.
The facts leading to the appeal was when a notice under section 153C of the Income Tax Act was issued to the assessee calling for return of income for assessment year A.Y. 2008-09 to 2013-14. After filing the return of the assessment year 2013-14, the AO scrutinized this return and passed an assessment order.
Thereafter, the AO imposes penaltyof Rs.10,01,500 under Section 271AAB of the Income Tax Act.
Manoj Kataruka, the counsel for the assessee submitted that assessment has not been framed under Section 153A read with section 143(3), rather it has been framed under section 153C of the Income Tax Act.
Ranu Biswas, the counsel for the revenue, supported the decision of the lower authorities.
After considering the facts, the bench of Rajpal Yadav (Vice-President) and Manish Borad (Accountant Member) observed that the search had not been conducted upon the assessee, then penalty under Section 271AAB of the Income Tax Act could not be imposed.
The assessment in the present case has been framed under the section 153C Income Tax Act, and not under the section 153 Income Tax Act. Therefore, the assessee could not be imposed with penalty under the above provision.
Thus the bench allowed the appeal filed by the assessee.
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