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Whether the Income Tax Appellate Tribunal was right in law in holding that the penalty levied under Section 271(1)(c) has to be sustained when in its earlier order dated 25.11.2016, the assessee's appeal was allowed and the Departmental appeal was dismissed ?

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Sec. 271(1)(c) of Income Tax Act, 1961 - Penalty - After holding that the assessee was liable to penalty under Section 271(1)(c) of the Act, the Tribunal proceeded to consider the question as to whether the CIT(A) was justified in giving a direction to the AO to levy penalty under Section 271AAA of the Act. After considering the effect of the said provision, the Tribunal held that the CIT(A) does not have power to give a direction to the AO to levy penalty under Section 271AAA of the Act on the undisclosed income and accordingly set aside that direction. Therefore, the appeal filed by the assessee stood allowed only to that extent and not in deleting the penalty levied by the AO under Section 271(1)(c) of the Act. Hence, the Tribunal, in the impugned order, rightly observed that when the Tribunal held that the penalty could not be levied under Section 271AAA of the Act, it is automatic that the levy of penalty made under Section 271(1)(c) of the Act was confirmed. The assessee had not challenged the levy of penalty under Section 271(1)(c) of the Act. Appeal of the assessee dismissed. - R. MAHALAKSHMI V/s ASSTT. CIT - [2020] 273 TAXMAN 017 (MAD)