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Income Tax Penalty proceeding u/s 271E cannot be initiated while completing assessment proceedings

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Income Tax Penalty proceeding u/s 271E cannot be initiated while completing assessment proceedings

Revenue Tax Penalty continuing u/s 271E can’t be initiated whereas finishing evaluation proceedings

The Revenue Tax Appellate Tribunal (ITAT), within the matter of Late Shri Pawan Kumar Vs. JCIT, ordered that an Revenue Tax Penalty continuing u/s 271E can’t be initiated whereas finishing evaluation proceedings.

Key factors of the Judgment:

The enchantment filed by the assessee is directed in opposition to the order dated 02.02.2023 of the Ld. Commissioner of Revenue Tax (Appeals), NFAC, Delhi [“CIT(A)”], whereby he confirmed the penalty of Rs. 1,40,000 imposed by the JCIT, Vary-2, Ghaziabad underneath part 271E of the Revenue Tax Act, 1961 (the “Act”) pertaining to Evaluation Yr (“A.Y.”) 2014-15 on reference made by the ITO, Ward-2(1), Ghaziabad (“AO”).

The assessee has challenged the order of the Ld. CIT(A) on the next grounds:

“1. On the information and circumstance of the case, the order handed by the Ld. Commissioner of Revenue Tax (Appeals) (CIT(A)] NFAC dt. 02.02.2023 is unhealthy each within the eye of Regulation and on information and determined the enchantment on the bottom which had been by no means raised by the appellant.

2. That the discovered CIT(A) erred in not deciding the next grounds as raised by the appellant (I) That the Realized JCIT concern the penalty order U/s 271E imposing penalty of Rs. 140000.00 with out jurisdiction unlawful, incorrect, void and liable to be canceled.

(II) That no reason for motion come up to provoke the penalty continuing for AY 2014-15 which was the inspiration of penalty continuing was not in existence on the time of concern penalty discover i.e. no continuing for related AY 2014-15 had been Pending on the related level of time. That in any case penalty discover and order for AY 2014-15 is past jurisdiction and untenable in legislation as per coated case judgment.

3. That the Realized CIT(A) additional erred in passing the order within the title of deceased particular person whereas the actual fact is that the appellant expired on 22.11.2018 and authorized inheritor had been place on the enchantment file information.

4. The Applicant craves depart so as to add, amend, or alter any of the grounds.”

Related Textual content of the Order:

11. It’s a longtime undeniable fact that penalty underneath part 271E of Act for A.Y. 2014-15 within the case of the assessee has been initiated whereas finishing evaluation proceedings for A.Y. 2015-16. This, in our view, shouldn’t be legally tenable. Penalty proceedings might be initiated at any time whereas the Ld. AO is in seisen of the evaluation proceedings of the related A.Y. wherein the default occurred and never afterwards. On information much like that of the assessee, the Hon’ble Punjab & Haryana Excessive Court docket held in Mahonar Lal Thakral (supra) that it being a case of processing the return of earnings, there isn’t a discovering within the assessing officer’s order with regard to the applicability or in any other case of part 269T of the Act to the assessee’s case. It was throughout the purview of the AO to carry the assessee’s case to scrutiny and to make common evaluation underneath part 143(3) of the Act. It was additionally throughout the energy of the AO on the

applicable stage to provoke proceedings underneath part 147 of the Act in opposition to the assessee. No such motion was taken.

12. It’s not in dispute that there have been no proceedings pending earlier than the Ld. AO qua the assessee for A.Y. 2014-15. We, subsequently maintain that initiation of penalty proceedings underneath part 271E of the Act on the idea of evaluation order for A.Y. 2015-16 is unhealthy in legislation and imposition of impugned penalty by Ld. JCIT and affirmation thereof by the Ld. CIT(A) shouldn’t be sustainable. The plea of Ld. Sr. DR that penalty underneath part 271D and 271E might be initiated dehors any pending proceedings for related A.Y. is devoid of advantage.

13. We agree with the rivalry of the assessee that the Ld. CIT(A) determined the enchantment on floor of ‘cheap trigger’ which was not raised by the assessee earlier than him. The assessee has additionally challenged the order of the Ld. CIT(A) on the bottom that it has been handed within the title of deceased particular person which too is deadly.

14. On the information and within the circumstances of the case, we maintain that the impugned penalty shouldn’t be sustainable. It doesn’t relaxation on sound authorized footing. We, subsequently delete it. 

For Official Judgment Obtain the PDF Given Beneath:

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