2018 (11) TMI 1721

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....Ld. CIT(A) in deleting the penalty levied u/s. 271AAB of the Income-tax Act, 1961 (hereinafter referred to as the "Act") in violation of Rule 46A of the I. T. Rules, 1962 and the Cross Objection of the assessee is that of the AO ought not to have levied penalty u/s. 271AAB of the Act since no search was initiated in the case of the assessee company u/s. 132 of the Act. 3. We not that the assessee has raised the legal issue in its Cross Objection so we are inclined to adjudicate the same first. Though the Ld. CIT, DR vehemently opposed the admission of the legal issue for the first time before us, we taking note of the Hon'ble Supreme court decision in NTPC Vs. CIT 229 ITR 383 (SC) are inclined to admit the legal issue which the assessee ....

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....iding this issue. Sd/- (SSG)                                                                                            Sd/ (PMJ) JM                             &nb....

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....ee, penalty provisions envisaged in sec. 271AAB of the Act cannot be initiated against the assessee. A perusal of the heading to the provision of sec. 271AAB reads as "penalty where search has been initiated" and on further perusal of the provision of section 271AAB it reveals about the assessee's disclosure by statement u/s. 132(4) about any undisclosed income in the course of search. Admittedly, in the present case, there has been no search u/s. 132 of the Act. Search happened in the case of Ghanshyam Misra Group of cases on 16.10.2012 and admittedly there was survey proceeding u/s. 133A on 16.10.2012 against the assessee company. We note that the AO has not initiated any 153A proceeding pursuant to the search and in case if the assessee ....

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....d the penalty on the ground that there was no search in the case of the assessee firm. The revenue has not been able to point out as to how this finding of the learned CIT(A) is erroneous. This being so the finding of the learned CIT(A) on this issue stands confirmed." Since we allow the legal issue raised by the assessee in its Cross Objection in respect of penalty proceedings u/s. 271AAB of the Act, the revenue appeal has become academic and infructuous. Therefore, we dismiss the revenue's appeal and allow the Cross Objection of the assessee. 6. In the result, the appeal by the revenue is dismissed and the cross objection of assessee is allowed. Order pronounced in the open court on 28th November, 2018. ============= Document....