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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI B.R. BASKARAN & SHRI SANDEEP SINGH KARHAIL
The present appeal has been filed by the legal heir on behalf of the assessee challenging the impugned order dated 26/06/2023, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, [“learned CIT(A)”], for the assessment year 2008-09.
In this appeal, the assessee has raised the following grounds:–
“The Hon'ble CIT(A) has erred in law and in facts by imposing penalty of Rs 829673 u s 271 1 c of the Income Tax Act, 1961 in gross contravention of the principles of natural justice
Shri Ashish Ramakant Kadam L/H of Late Shri Ramakant Kadam ITA no.2999/Mum./2023
The Hon'ble CIT(A) erred in upholding the contention of the Ld AO by dismissing the appeal and imposing a huge penalty of Rs 829673 us 271 1 c of the Income Tax Act 1961, disregarding the facts of the case. The appellant craves leave to add/modify/amend or delete the aforesaid grounds of appeal.”
3. The only grievance of the assessee, in the present appeal, is against the penalty levied under section 271(1)(c) of the Act.
4. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is an individual and earned income under the head income from house property, income from other sources, interest income and subletting, profit from firms, and long-term capital gain on the sale of certain assets. For the year under consideration, the assessee filed his return of income on 23/03/2009 declaring a total income of Rs. 43,96,810. The return filed by the assessee was selected for scrutiny and statutory notices under section 143(2) as well as section 142(1) of the Act were issued and served on the assessee. The scrutiny assessment was concluded by the Assessing Officer (“AO”) vide order dated 27/10/2010 passed under section 143(3) of the Act assessing the total income of the assessee at Rs. 1,47,98,940, after making the following additions/disallowances:-
(i) addition of the Rs. 1,31,73,956 under the head “long-term capital gains” after disallowing exemption claimed under section 54F of the Act; (ii) disallowance of Rs. 3,89,458 on account of interest on income from other sources; and Shri Ashish Ramakant Kadam L/H of Late Shri Ramakant Kadam ITA no.2999/Mum./2023
(iii) disallowance of Rs. 4,05,676 on account of interest on income from business.
In further appeal, the learned CIT(A) deleted all the above additions vide order dated 28/04/2014. In the quantum appeal by the Revenue against the aforesaid order passed by the learned CIT(A), the coordinate bench of the Tribunal vide order dated 05/04/2018 passed in ITA No.4514/Del./2014 set aside the order passed by the learned CIT(A) and restore the same to the file of the AO with a direction to examine the issue afresh in accordance with the law after affording adequate opportunity of being heard to the assessee.
Meanwhile, vide penalty order dated 31/03/2016 passed under section 271(1)(c) of the Act, the AO levied a penalty of Rs. 8,29,673 on the basis that the assessee has furnished inaccurate particulars of its income. In further appeal, learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on the basis that the assessee has requested for withdrawal of the appeal. Being aggrieved, the assessee is in appeal before us.
From the perusal of the impugned order we find that the assessee requested to drop the appellate proceedings before the learned CIT(A) on the basis that in the remand proceedings before the AO, pursuant to directions by the coordinate bench of the Tribunal, the AO has passed the order accepting the returned income and therefore the levy of penalty is not sustainable. We are of the considered opinion that since in the quantum appeal, the coordinate bench of the Tribunal has already restored the matter to the file of the AO for de novo assessment, the penalty as levied under section 271(1)(c) of the Act, at this stage, does not survive and therefore is set aside. Further, Page | 3
Shri Ashish Ramakant Kadam L/H of Late Shri Ramakant Kadam ITA no.2999/Mum./2023 we find that pursuant to the Tribunal’s direction, the AO has passed the order dated 08/12/2019 under section 143(3) read with section 254 of the Act accepting the returned income of the assessee. Therefore, in view of the facts and circumstances as noted above, the penalty levied under section 271(1)(c) of the Act is not sustainable and thus is quashed.
In the result, the appeal by the assessee is allowed. Order pronounced in the open Court on 29/12/2023