JITENDRA SHIVPRASAD DAVE,AHMEDABAD vs. ITO, WARD-5(2)(1), AHMEDABAD

The assessee has filed an application for grant of early hearing on the ground that the quantum addition made by the Assessing Officer has been set aside to the file of the Assessing Officer for re-adjudication and, therefore, the very genesis to visit the assessee with penalty is no more in existence.

With the assistance of learned representatives, we have gone through the record carefully. It is observed that the additions have been remitted back to the file of the Assessing Officer for re-adjudication by the Tribunal

Jitendra Shivprasad Dave Vs. ITO AY : 2010-11 2 in decided on 25.10.202. Sub clause (iii) of Section 271(1)(c) of the Act contemplates computation of penalty. It provides that if any addition is being made to the total income of the assessee, then either equivalent to the taxes or three times of the taxes could be imposed upon the assessee as a penalty for furnishing inaccurate particulars or concealment of income under Section 271(1)(c) of the Act. Thus, the computation of penalty is depended ultimately on the quantum addition made to the total income of the assessee. In the quantum appeal, the addition of Rs.85,65,026/- has been remitted back to the file of Assessing Officer for re-adjudication. Therefore, we find a good case for grant of early hearing. Since the quantum addition has been remitted back to the file of Assessing Officer and the penalty is depended upon the ultimate determination of income; therefore, we confronted with the learned DR as to why this issue be not remitted back to the file of Assessing Officer. Learned DR pointed out that he does not possess the file as it is listed in the cause-list under the head “application for early hearing”. However, he has no objection if the appeal is taken out of turn.

We find that the appeal is time barred by 214 days before the learned CIT(A). We further find that when the assessee filed quantum appeal in 2019, i.e. vide which the ex-parte assessment order passed under Section 144 of the Act was upheld, there also the appeal before the CIT(A) was time barred by 152 days. The learned CIT(A) did not condone the delay, but the Tribunal not only condoned the delay but also remitted the issue back to the file of the Assessing Officer for adjudication on merits. Taking a clue from there and keeping the issue in mind as also the punishment in the shape of penalty amounting to Rs.25,47,750/- , we are of the view that this penalty is far disproportionate to the negligence, if any, of the assessee for not filing the appeal in time. Taking into consideration

As observed earlier, the computation of penalty is dependent upon the determination of income in quantum proceedings which is already remitted back to the file of the Assessing Officer for fresh adjudication by virtue of order of Tribunal dated 25.10.2021 passed in in quantum proceedings; therefore, we remit this issue also to the file of the Assessing Officer. The learned Assessing Officer shall re-adjudicate the issue as to whether the assessee deserves to be visited with penalty or not after passing a fresh assessment order against the assessee in pursuance of the Tribunal’s order.

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