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TMI Blog2015 (11) TMI 1784X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions. So initiating the penalty proceedings on the basis of void assessment order are not sustainable in the eyes of law. Assessee is well within his right to take this defence of challenging the assessment order even though assessment order has not been challenged, at the time of challenging the penalty order. In the case entitled ACIT v. Smt. Surinder Kaur [ 2008 (4) TMI 367 - ITAT LUCKNOW-A] decided the identical issue in the identical circumstances in favour of the assessee, which is applicable to the facts and circumstances of the case. So, when the foundation of addition on unaccounted income of ₹ 4,95,000/-, though not challenged by the assessee, is not sustainable in the eyes of law, the question of imposing penalty qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that too @ 300% is bad in law and against the facts and circumstances of the case. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty u/s. 271(1)(c) in respect of the income of ₹ 4,95,000/- and framing the impugned assessment order u/s. 143(3) 1153B(1)(b) dated 19-12-2008 is also contrary to law and facts. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty u/s. 271(1)(c) which is bad in law being beyond jurisdiction and barred by limitation and contrary to the principles of natural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted by the A.O. 3. During the course of search of locker No. 152 maintained with State Bank of India, Rewari in the joint names of assessee and his wife, cash amount of ₹ 15,50,000/- was found and seized. However, the assessee failed to explain the source of cash in question found in the locker despite availing several opportunities, consequently, A.O. treated the cash found form the locker as unaccounted money and made addition of ₹ 15,50,000/-. Finding concealment of income of ₹ 20,54,000/- (4,95,000/- + 15,50,000/-), penalty @ 300% i.e. ₹ 20,79,453/- has been imposed. 4. The assessee carried the matter before Ld. CIT(A) who has partly allowed the appeal by deleting the penalty am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital cum residence of the assessee, documents/bank slips dated 14.06.2004 showing purchase of demand drafts to the tune of ₹ 4,95,000/- and unaccounted cash of ₹ 15,50,000/- were seized from the locker maintained with SBI, Rewari in the joint name of the assessee and his wife, the seized and unaccounted income of ₹ 20,45,000/- (₹ 4,95,000+15,50,000) has been assessed during the assessment year 2007-08 vide assessment order dated 19.12.2008 on the basis of which penalty proceedings have been initiated. 9. Now, the sole question arises for determination in this case is, as to whether penalty order passed by ACIT is without any jurisdiction, having been passed on the basis of bank slips dated 14.06.2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered the amount of ₹ 4,95,000/- to buy peace of mind and to avoid the protracted litigation; Second, when the revenue has statutory power to proceed against the assessee by reopening the assessment of a particular assessment year and then initiating the penalty proceedings, it cannot be allowed to proceed mechanically to invoke the penal provisions. So initiating the penalty proceedings on the basis of void assessment order are not sustainable in the eyes of law. Assessee is well within his right to take this defence of challenging the assessment order even though assessment order has not been challenged, at the time of challenging the penalty order. 12. Coordinate Bench in the case entitled ACIT v. Smt. Surinder Kaur 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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