Incorrect Penalty Imposed under Income Tax Act; Tribunal Orders Deletion

The tribunal found the penalty imposed under section 271(1)(c) of the Income Tax Act for the assessment year 2009-10 to be legally flawed as it should have been imposed under section 271AAA. The tribunal directed the deletion of the penalty, ruling that the imposition under section 271(1)(c) was not in accordance with statutory provisions. The assessee's appeal was allowed, and the penalty amount was ordered to be deleted by the tribunal.

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Issues:
Imposition of penalty under section 271(1)(c) of the Income Tax Act concerning assessment year 2009-10.

Analysis:
The appeal was filed by the assessee against the penalty of Rs. 24,08,800 confirmed by the CIT(A) under section 271(1)(c) of the Act. The search conducted under section 132 of the Income Tax Act led to the initiation of proceedings under section 153A. The assessee declared total income at Rs. 1,60,08,210, including a disclosure of Rs. 61,94,647 made during the search. The AO imposed a penalty based on the additional income declared by the assessee. The CIT(A) upheld the penalty. The assessee contended that no incriminating material was found to support the alleged bogus transaction except for oral evidence. The AO accepted the income disclosed by the assessee without any additions. The AR argued that no concealment of income could be inferred when the return filed under section 153A was accepted without variations. The AR also highlighted the contradictory stand of the AO regarding the specified year, arguing that penalty under section 271AAA should have been invoked instead of section 271(1)(c).

The DR supported the lower authorities' actions and cited a judgment of the Calcutta High Court. The tribunal observed that the AO's invocation of penalty under section 271(1)(c) was not in line with the statutory provisions. The undisclosed income related to a specified year, and the penalty should have been imposed under section 271AAA. The tribunal found the AO's actions under section 271(1)(c) to be legally flawed and directed the deletion of the penalty. The tribunal held that the penalty imposed was not sustainable in law and allowed the assessee's appeal.

In conclusion, the tribunal found that the penalty imposed under section 271(1)(c) was not legally valid due to the incorrect invocation of the penalty provision. The tribunal directed the AO to delete the penalty amount levied under section 271(1)(c) of the Act.

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