ITAT Indore Bench upholds deletion of penalty under section 271AAB for AY 2016-17

The ITAT Indore Bench upheld the deletion of a penalty amounting to Rs. 73,16,502/- imposed under section 271AAB of the Income-tax Act, 1961 for assessment-year 2016-17. The Bench found that since a similar issue had been decided in favor of the assessee for the assessment-year 2015-16, the penalty for 2016-17 was also not sustainable. As a result, the ITAT dismissed the Revenue's appeal on 28.06.2022.

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Issues:
1. Appeal against penalty-order under section 271AAB for assessment-year 2016-17.

Analysis:
The appeal filed by the Revenue challenges the order of the learned CIT(A)-3, Bhopal, concerning the penalty-order passed by the learned ACIT(Central)-2, Indore, under section 271AAB of the Income-tax Act, 1961, for assessment-year 2016-17. The search conducted under section 132 of the Act at the premises of Moira Group of Indore revealed undisclosed income, out of which a portion related to the assessment year 2016-17. The penalty imposed by the assessing officer was challenged, leading to the present litigation before the ITAT Indore Bench.

The key contention raised by the Revenue was the deletion of the penalty amounting to Rs. 73,16,502/- by the learned CIT(A). The Revenue argued that the factual matrix of the surrender and assessment for both assessment years, 2015-16 and 2016-17, was identical, and therefore, the decision of the ITAT Indore Bench in favor of the assessee for the assessment-year 2015-16 should apply equally to the assessment-year 2016-17. The Revenue sought to apply the same decision to uphold the penalty imposed for the latter assessment year.

Upon careful consideration, the ITAT Indore Bench found merit in the arguments presented by the assessee's representative. The Bench observed that the issue was already settled in favor of the assessee for the assessment-year 2015-16, leading to the deletion of the penalty. Consequently, the Bench concluded that the penalty imposed for assessment-year 2016-17 was also not sustainable based on the same reasoning. Therefore, the ITAT upheld the deletion of the penalty made by the learned CIT(A) for the assessment-year 2016-17, resulting in the dismissal of the Revenue's appeal.

In conclusion, the ITAT Indore Bench dismissed the Revenue's appeal, pronouncing the order in accordance with Rule 34 of the I.T.A.T. Rules 1963 on 28.06.2022.

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