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Koyna Glass Works P Ltd., 2/C Lawerence & Mayo House, 276 Dr. D N Road Road, Mumbai 400 001 Vs. ITO Ward 1 (2)(2), Mumbai
October, 23rd 2015
               ,   Û `',  
                    MUMBAI BENCHES "A", MUMBAI

             Before Shri G S Pannu, AM & Shri Sanjay Garg, JM

                   ITA No.4827/Mum/2011
                 [ [ / Assessment Year : 2000 - 01

Koyna Glass Works P Ltd.,                 ITO Ward 1 (2)(2),
2/C Lawerence & Mayo House,               Mumbai
276 Dr. D N Road Road,              Vs
Mumbai 400 001
     ( /Appellant)                               (×/Respondent)

           Appellant By      : Shri Vimal Punmiya
           Respondent By     : Shri E Shridhar

     /                                      /
Date of Hearing :28.07.2015.             Date of Pronouncement :21.10.2015


Per Sanjay Garg, Judicial Member:

     The present appeal filed by the assessee is directed against the order

of the CIT(A) -2, Mumbai, dated 03.03.2011 pertaining to A.Y. 2000-01.

2.   The    assessee    in   this    appeal     has   agitated   the   levy   of

penalty under section 271B of the Income tax Act for non compliance of the

provisions of section 44 of I.T.Act by the Assessing Officer holding that the

assessee had failed to get his accounts audited in respects of previous year

despite its turnover of more than Rs.6 Cores.

                                                               ITA 4827/Mum/11
                                                             Koyna Glass Pvt. Ltd.

3.   The learned AR of the assessee, at the outset, has stated that in this

case, the Assessing Officer has failed to take necessary prior approval from

Joint Commissioner of Income Tax as per the provisions of section 274 of

the I.T.Act. The learned DR could not disprove or deny this fact on the file.

The penalty levied by the lower authorities is thus bad in law as the same

being hit by the provisions of section 274 of the Act as the amount of

penalty exceeds twenty thousand rupees and the Assessing Officer was

required to get the prior approval of the Joint Commissioner before

proceeding to levy the penalty under section 271B of the Act. The case is

squarely could by the order of the co-ordinate Benches of this Tribunal

dated 20.05.2015 in the case of M/s. Precision Shears & Knives Pvt. Ltd. for

A.Y. 2000-01, wherein it has been held as under:

     "8.1 A perusal of the above section clearly shows that the AO
     had to take permission from the Joint Commissioner before
     levying the penalty as the amount exceeded Rs.10,000/-. There
     is nothing in the order of the penalty which could show that the
     ITO has taken prior permission from the Joint Commissioner.
     When a statute required a thing to be done in a certain manner,
     it shall be done in that manner alone. When a particular
     authority has been designated to record his satisfaction on any
     particular issue, then it is that authority along who should apply
     his independent mind to record his satisfaction and satisfaction
     so recorded should be independent and not borrowed or dictated
     satisfaction. Considering the facts of the case, in the light of the
     provisions of Sec. 274 of the Act, we have no hesitation to hold
     that the AO has levied penalty in contravention to the provisions
     of Sec. 274 of the Act and, therefore, the order of the First

                                                                   ITA 4827/Mum/11
                                                                 Koyna Glass Pvt. Ltd.

        Appellate authority is liable to be set aside. We direct the AO to
        delete the penalty so levied."

        In view of the above decision of the Tribunal, the penalty levied by

 the lower authorities is not sustainable in the eyes of law and the same is

 accordingly ordered to be deleted.

 4.     In the result, the appeal of the assessee is hereby allowed.

        Order pronounced in the open court on 21st October, 2015.

                       Sd/-                               Sd/-
                (G S PANNU)                        (SANJAY GARG)
             ACCOUNTANT MEMBER                   JUDICIAL MEMBER
   Mumbai;  Dated : 21 October, 2015.


         /Copy of the Order forwarded to :
1.     /The Appellant.
2.    × / The Respondent.
3.      () / The CIT(A), Mumbai.
4.       / CIT
5.     ,   ,   / DR, `A' Bench, ITAT,

                                                   / BY ORDER,
 ×  //True Copy//

                                      /  (Dy./Asstt. Registrar)
                                  ,  / ITAT, Mumbai
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