Lauda Samabay Krishi Unnayan Samity Limited Vs ACIT (ITAT Kolkata)
The issue before the ITAT was whether a penalty under Section 271AAC(1) of the Income-tax Act, 1961 could be sustained after the underlying addition under Section 69A, made in an assessment under Section 147 read with Section 144B, had been deleted in revision proceedings under Section 264.
The assessee, a registered co-operative society functioning as a Primary Agricultural Credit Society, was assessed under Section 147 read with Section 144B for AY 2019-20. The Assessing Officer made an addition of Rs. 7,95,66,456 under Section 69A, invoked Section 115BBE, and raised a tax demand. Subsequently, the Principal Commissioner of Income Tax, exercising powers under Section 264, deleted the entire addition. The Assessing Officer thereafter passed an order giving effect to the revision order and assessed the income of the assessee as NIL.
Despite the deletion of the addition, the Assessing Officer proceeded to pass a penalty order under Section 271AAC(1). The assessee challenged the penalty, contending that once the addition had been deleted and the assessment order had merged with the revision order under Section 264, no basis remained for imposing penalty. The first appellate authority dismissed the appeal, leading to the present appeal before the ITAT.
