TaxTMI 
TaxTMI 
2011 (1) TMI 538
X X X X Extracts X X X X
X X X X Extracts X X X X
.... questions of law:- "(i) Whether on the facts and in the circumstances of the case and in law, the Ld. ITAT was right in deleting the penalty imposed u/s 271E of the I.T. Act, 1961 on the ground that the deletion of penalty proceedings itself was illegal as no proceedings were pending before the AO, despite the fact that imposition of penalty u/s 271E is not subject to pendency of any type of proceedings? (ii) Whether on the facts and in the circumstances of the case and in law, the Ld. ITAT was right in accepting the contention of the assessee that the penalty notice was issued when there were no proceedings pending before the AO qua the assessee and the action of penalty may be permissible only after assessment without tak....
X X X X Extracts X X X X
X X X X Extracts X X X X
....003 declaring an income of Rs.1,35,010/-. The said return was processed under Section 143(1)(a) vide order dated 31.12.2003. The assessee had old deposit of his wife, brought forward, as on 1.4.2002 amounting to Rs.13,31,999/- in her account who further deposited Rs.11,66,000/- during the year and interest of Rs.34,950/- was credited to her account as on 31.3.2003. The assessee and his wife jointly purchased property against considerations of Rs.17,00,000/- and Rs.15,00,000/- from M/s Ansal Housing & Estate Pvt. Ltd. and Babyloan Builders Pvt. Ltd. vide tripartite agreement dated 9.5.2001 to get prepared the building plans of raising of construction of a commercial complex. From the account of the wife of the assessee with M/s Fancy Wool En....
X X X X Extracts X X X X
X X X X Extracts X X X X
....been deleted by the Tribunal. The Tribunal while deleting the penalty recorded that the return of the assessee was processed as on 31.12.2003 and the notice u/s 274 read with section 271E of the Act was issued on 12.06.2007. Such notice was issued when there was no proceedings pending before the Assessing Officer. Relying upon Delhi High Court judgment in Commissioner of Income Tax v. Standard Brands Ltd. (2006) 285 ITR 295, the Tribunal further observed that action for penalty may be permissible only after regular assessment has been framed and since no regular assessment order had been passed in this case, the recourse to penalty proceedings under Section 271E were not justified. The findings recorded by the Tribunal read thus:- &....