2013 (4) TMI 822 - AT - Income Tax

Summary

Issues involved: Appeal against penalty u/s.271(1)(c) of Rs. 75,79,740 arising from assessment order quashed by ITAT "A" Bench Ahmedabad.

Summary:

The appeal was filed by the Assessee challenging the penalty u/s.271(1)(c) of Rs. 75,79,740 imposed for A.Y. 2006-07. The assessment order made u/s.143(3) rws 153C rws 153B(1)(b) of the IT Act was quashed by ITAT "A" Bench Ahmedabad, rendering the penalty invalid. The Tribunal held that the initiation of search is necessary for the applicability of Section 153A of the IT Act. The completed assessments for relevant years would get reopened irrespective of incriminating material found. As the assessment order was quashed, the consequential penalty u/s.271(1)(c) did not survive. Therefore, the penalty was directed to be revoked, and the Assessee's appeal was allowed.

In conclusion, the penalty u/s.271(1)(c) was revoked as the assessment order was quashed by ITAT "A" Bench Ahmedabad, rendering the penalty invalid. The Tribunal emphasized the necessity of search initiation for the applicability of Section 153A of the IT Act, leading to the reopening of completed assessments. The decision highlights the legal principles governing the reopening of assessments in cases of search operations under the IT Act.