The Commissioner Of Income Tax, Central-I, Mumbai v. Ms. Aishwaraya K. Rai

IN THE HIGH COURT OF JDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 2752 OF 2010 The Commissioner of Income Tax, Central-I, MumbaiVs.Ms. Aishwaraya K. Rai ...Appellant. ..Respondent. Mr. Suresh Kumar for the Appellant. Mr. Mr. P. J. Pardiwala with Mr. S.G. Lakhani for the Respondent. CORAM : J.P. DEVADHAR AND A.A. SAYED, JJ. DATE : 21ST JULY, 2011. P.C. 1.The question of law raised by the revenue in this Appeal reads thus: "Whether, on the facts and circumstances, of the case and in law, the Hon'ble Tribunal was correct in upholding the CIT(A) order in deleting the penalty levied by Assessing Officer u/s 158BFA(2) of the Income Tax Act, 1961?" 2.In the present case, pursuant to search proceedings Block assessment proceedings were initiated against the assessee. The block return filed by the assessee was accepted by the assessing officer in so far as the undisclosed income is concerned. In the appeal filed by the assessee against the block assessment relating to other claims disallowed by the assessing officer, the CIT(A) while allowing the claim of the assessee, made additions to the extent of Rs. 9,85,461/-. The said addition was upheld by the ITAT. 3.The penalty imposed against the assessee was deleted by the ITAT on the ground that the enhancement was made by the CIT(A) in the appellate proceedings and that if the enhanced amount is excluded, the undisclosed income determined by the assessing officer would go below the undisclosed income returned by the assessee. The Tribunal has further noted that the CIT(A) while enhancing the amount did not initiate penalty proceedings. 4.In the circumstances, no fault can be found in the order of ITAT in deleting the penalty. Accordingly appeal is dismissed with no order as to costs. ( A.A. SAYED, J. ) ( J.P. DEVADHAR , J.)