NEHA SAMYAK LODHA,,NASHIK vs. INCOME-TAX OFFICER,,

The assessee in appeal has raised six grounds challenging the levy of penalty on merits, as well as on the legal grounds.

Shri Pramod Shingte appearing on behalf of the assessee submitted that a perusal of assessment order dated 29-12-2011 passed u/s. 143(3) of the Act would show that the Assessing Officer has recorded satisfaction for initiating penalty proceedings u/s. 271AAA of the Act. The notice dated 29-12-2011 has been issued to the assessee for levy of penalty u/s. 271AAA r.w.s. 274 of the Act, whereas, the penalty has been levied by the Assessing Officer for furnishing inaccurate particulars of income u/s. 271(1)(c) of the Act. The manner in which penalty has been levied clearly shows non-application of mind by the Assessing Officer. The ld. AR submitted that this anomaly was pointed to the Commissioner of Income Tax (Appeals), however, the Commissioner of Income Tax (Appeals) without considering the submissions of the assessee dismissed the appeal and confirmed the levy of penalty u/s. 271(1)(c) of the Act.

Shri Ashok Babu representing the Department vehemently supporting the findings of Commissioner of Income Tax (Appeals) prayed for dismissing the appeal of assessee.

We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. A perusal of the assessment order shows that the Assessing Officer has initiated penalty proceedings on the addition of Rs.11,02,500/- u/s. 271AAA of the Act. Thereafter, notice was issued to the assessee u/s. 271AAA r.w.s. 274 of the

Initiation of penalty under the provisions of section 271AAA and levy of penalty under the provisions of section 271(1)(c) by the Assessing Officer shows complete non-application of mind by the Assessing Officer. Both the sections i.e. 271AAA and 271(1)(c), operate under different set of circumstances. A perusal of penalty order dated 24-10-2013 shows complete negligence on the part of the Assessing Officer in passing order and levying penalty under the provisions of section 271(1)(c) disregarding the fact that satisfaction has been recorded for levy of penalty u/s. 271AAA and the notice has also been issued under the provisions of section 271AAA r.w.s. 274 of the Act. We observe that the Commissioner of Income Tax (Appeals) has also erred in not realizing the fact that after recording of satisfaction u/s. 271AAA levy of penalty u/s. 271(1)(c) is not sustainable. We find merit in the submissions of the assessee and quash the impugned order.

In the result, the appeal of assessee is allowed.