2013 (9) TMI 1221 - AT - Income Tax

ITAT Upholds CIT(A) Decision on Penalty Deletion Under Section 271AAA

The ITAT upheld the Ld. CIT(A)'s decision to delete the penalty imposed under section 271AAA of the Act. The case involved unaccounted income discovered ... - Issues involved: Appeal against order of Ld. CIT(A)-II Ahmedabad directing deletion of penalty u/s. 271AAA of the Act.Summary:The case involved a search u/s. 132 at the residence of a partner of a firm, leading to disclosure of unaccounted income. The AO levied a penalty of &8377; 5,20,500 u/s. 271AAA for failure to describe the manner in which the income was derived. However, the Ld. CIT(A) deleted the penalty, stating that section 271AAA is applicable only when a search u/s. 132 has been initiated, which was not the case for the appellant firm. The Ld. CIT(A) also noted that the conditions for penalty u/s. 271AAA were not fulfilled. The ITAT upheld the Ld. CIT(A)'s decision, as no search operation u/s. 132 was conducted in the assessee's case, rendering section 271AAA inapplicable. The ITAT dismissed the revenue's appeal, affirming the deletion of the penalty.