THE DCIT, CIRCLE-7, AHMEDABAD vs. SMT. GEETABEN CHANDULAL PRAJAPATI, AHMEDABAD

This is an appeal by the Revenue and Cross Objection by the assessee preferred against the order of the CIT(A)-10, Ahmedabad dated 09.11.2015 pertaining to assessment year 2006-07.

The solitary grievance of the Revenue is that the CIT(A) has erred in deleting the penalty levied by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961 (‘the Act’ hereinafter) amounting to Rs.20,32,218/-.

Subsequently penal proceedings were initiated under section 271(1)(c) of the Act and the assessee was show caused to explain why penalty should not be levied on the income disclosed in the return filed pursuant to the notice under section 148 of the Act. The assessee filed a detailed reply strongly contending that the returned income was accepted as such and it is not a case of any concealment of income or filing inaccurate particulars of income. The contention of the assessee did not find any favour with the Assessing Officer who proceeded by levying penalty of Rs.20,32,218/-. The assessee agitated the matter before the CIT(A) and pointed out that the Assessing Officer vide order dated 28.03.2013 had dropped the said penalty proceedings. Therefore, the Assessing Officer has erred in revisiting the same issue by levying penalty under section 271(1)(c) of the Act.

After considering the facts and submissions, the CIT(A) found that vide order dated 28.03.2013 the Assessing Officer had dropped the penal proceedings. The CIT(A) was convinced that penalty cannot be levied and the order passed by the Assessing Officer is not as per the provisions of the Act.

Before us, the learned Departmental Representative strongly supported the findings of the Assessing Officer. Per contra, learned counsel for the assessee reiterated what has been stated before the lower authorities.

We have given a thoughtful consideration to the orders of the authorities below. The order dated 28.03.2013 passed by the Assessing Officer read as under :-

In our considered opinion, once the penalty proceedings have been dropped by the Assessing Officer, after considering the submissions made by the assessee, penalty cannot be imposed later on for the same assessment year on the same issue. Considering the facts in totality in the light of aforementioned order of the Assessing Officer, we decline to interfere with the findings of the CIT(A).

Appeal filed by the Revenue is accordingly dismissed.

Cross Objection of the assessee is in support of the order of the CIT(A) and, therefore, needs no separate adjudication.