Case Law Details
Shri Vijay Kumar Reddy Vs ACIT (ITAT Hyderabad)
ITAT), Hyderabad bench has issued an order pertaining to the application of penalties under section 271AAC of the Income Tax Act in the case of Shri Vijay Kumar Reddy Vs ACIT. The Tribunal asserted that penalty under this section is not applicable if the tax under section 115BBE of the Act is nil. The case necessitates readjudication, bearing implications for the enforcement of penalties for undisclosed income.
The ITAT bench pointed out that the penalty imposed under section 271AAC is predicated on the tax payable under section 115BBE. The appellant, Shri Vijay Kumar Reddy, emphasized that in his case, the tax calculated under this section amounted to zero. Hence, by extension, the penalty applied under section 271AAC should be invalidated.
The appellant contended that despite the cash seized during an operation under section 132A, the tax levied under section 115BBE was nil as per the computation sheet. Hence, the penalty under section 271AAC, which is calculated based on the tax levied under section 115BBE, should not be applicable.
On hearing the arguments from both sides, the Tribunal decided to restore the issue to the CIT (A) for readjudication. The Tribunal, considering the totality of facts, deemed it appropriate to provide the appellant one final opportunity to present his case.
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