INCOME TAX ACT, 1961

Section 271AAB

Penalty under section 271AAB - Leviability - Whether mandatory or discretionery -

Assessee challenged finding of CIT(A) that penalty under section 271AAB is mandatory in nature.Held: section 271AAB begins with the stipulation that AO may direct assessee and assessee would pay penalty as per clause (a) to (c) so satisfied in sub-section (1) to section 271AAB. Further, as per sub-section (3) of section 271AAB, the provisions of section 274 and section 275 as far as may be applied in relation to penalty under this section which means that before levying penalty, the AO has to issue a show-cause granting an opportunity to assessee. Thus, levy of penalty is not automatic but AO has to decide based on facts and circumstances of the case after giving a reasonable opportunity to the assessee. In light of this levy of penalty under section 271AAB is not mandatory in nature and it needs to be examined whether there is any basis for levy of penalty and whether assessee has satisfied necessary conditions for levy of penalty under section 271AAB.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-16

INCOME TAX ACT, 1961

Section 271AAB

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