Penalty under Income Tax Act: Directors' admissions crucial. Precedent upheld, penalties deleted. No question of law.

The High Court considered the correctness of penalties imposed under Section 271AAA of the Income Tax Act, 1961. The penalties imposed on two Directors were deleted by the Appellate Commissioner, as the admission required under Section 271AAA was lacking. Following precedent, the ITAT upheld the deletion of penalties, citing a previous order. The Court dismissed the appeals, finding no substantial question of law.

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Issues involved:
- Correctness of penalty imposed under Section 271AAA of the Income Tax Act, 1961.

Analysis:
The High Court addressed the question of law regarding the correctness of the penalty imposed under Section 271AAA of the Income Tax Act, 1961. The case involved search assessments completed under Section 153A for the assessment year 2010-11. The Assessing Officer imposed penalties on two Directors based on additions made during the assessment. However, the Appellate Commissioner reversed the findings and deleted the penalties. The ITAT observed that the imposition of penalty under Section 271AAA is contingent on the admission made during search proceedings, which was not present in this case. Citing a previous order in Addl. Commissioner of Income Tax v. Emirates Technologies Pvt. Ltd., the ITAT deleted the penalty. The Court noted that the decision in Emirates Technologies Pvt. Ltd. was upheld in a subsequent appeal by the Revenue. Consequently, the Court found no substantial question of law in the appeals and dismissed them accordingly.

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