Penalty of 100% of tax sought to be evaded u/s 271AAA was Not “Typographical Error”

Fahmida International Vs ACIT (ITAT Cuttack)

Conclusion: Penalty leviable u/s.271AAA was 10% of the concealed income whereas under section 271(1)(c), the penalty was leviable at 100% of the tax sought to be evaded, therefore, the claim of AO that show cause notice had been issued under both under section 271AAA and section 271(1)(c) was not correct and it was not a typographical error.

Held: In the instant case, assessees filed  the appeal against the order of the CIT (A) for the assessment year 2009-10 against the confirmation of penalty levied under section 271(1)(c). Assessee contented that search in the case of the assessee took place the specified period 2009-10 for  purpose of levying the penalty, if at all, was under section 271AAA of the Income Tax Act 1961  and not under section 271(1)(c). AO contented that a show cause notice had been issued under both the under section 271AAA of the Income Tax Act 1961 and section 271(1)(c) of the Income Tax Act 1961 and it was only a typographical error. It was held that the penalty leviable u/s.271AAA was 10% of the concealed income whereas under section 271(1)(c), the penalty was leviable at 100% of the tax sought to be evaded. A perusal of the order of AO showed that AO had levied penalty at 100% of tax sought to be evaded. Consequently, the order passed by the AO could not be held as typographical error. In regard to levy of penalty u/s.271AAA, assessment year 2009-10 was the specified year in respect of the assessee, as the search took place on 28.5.2008. Respectfully following the decision of the Co-ordinate bench of this Tribunal in the case of S.M.Enterprises, the penalty levied u/s.271(1)(c) by the AO and confirmed by the CIT(A) stood deleted.

FULL TEXT OF THE ORDER OF ITAT CUTTACK

2. This is an appeal filed by the assessee against the order dated 30.3.2013 of the ld CIT(A)-1,Bhubaneswar in Appeal No.0339/10-11 for the assessment year 2008-09.

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