SHRI JANAKBHAI SEVANTILAL BHOJAK,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-1(3), BHAVNAGAR

The solitary ground of appeal of the assessee is against the decision of ld. CIT(A) in confirming the action of the assessing officer in levying the penalty of Rs. 3,42,850/- u/s. 271(1)(c) of the act.

The fact in brief is that assessment u/s. 143(3) of the act was completed on 27th December, 2010 and total income was assessed at Rs. 12,04,330/-. During the course of assessment, the assessing officer has mainly made addition of Rs. 10,32,000/- on account of unexplained cash deposited in the bank account. Thereafter, the assessing officer has levied penalty of Rs. 3,42,850/- vide order u/s. 271(1)(c) of the act dated 8th August, 2017. The ld. CIT(A) has sustained the penalty levied vide order dated 23rd April, 2018.

During the course of appellate proceedings before us, the ld. counsel at the outset submitted that quantum addition on the basis of which the impugned penalty was imposed had been restored to the file of assessing officer for deciding afresh vide ITAT order dated 18-06-2019 in & 251/Ahd/2014 in the case of Janakbhai Sevantilal Bhojak Vs. ITO. On the other hand, the ld. departmental representative could not controvert these undisputed facts.

We have heard both the sides and perused the material on record. We have gone through the decision of ITAT in the case of assessee in respect of quantum addition on the basis of which the impugned penalty was levied and it is noticed that the issue was restored to the file of assessing officer vide & 251/Ahd/2014 dated 18-06-2019. In the light of the above facts and circumstances, the penalty levied has become infructuous as the issue on which penalty was levied had been restored to the file of assessing officer for deciding afresh. The assessing officer may consider Page No 3 Janakbhai Sevantilal Bhojak vs. ITO issue of penalty on the outcome of set aside proceedings. Therefore, this ground of appeal of the assesse is allowed.