RATHI BARS LIMITED,NEW DELHI vs. ACIT, CC-16, NEW DELHI

We have considered rival submissions and perused material on record. As could be seen from the facts on record, while completing the assessment under Section 143(3) of the Act, the assessing officer made the following additions:

Assessee contested the aforesaid additions before learned Commissioner (Appeals). Learned Commissioner (Appeals) granted partial relief to the assessee by sustaining the additions made on account of difference in stocks to the extent of Rs.17,67,071. Against the order of learned Commissioner (Appeals), assessee preferred an appeal before the Tribunal. However, during the pendency of the assessee’s appeal before the Tribunal, the assessing officer passed an order on 30.03.2019 imposing penalty of Rs.12,21,997 under Section 271AAB of the Act on the additions remaining after order of learned Commissioner (Appeals). The penalty so imposed was also confirmed by learned Commissioner (Appeals).

We have observed, while deciding assessee’s appeal contesting the additions sustained by learned Commissioner (Appeals), the Tribunal vide order dated 28.02.2022 in and Ors. has deleted the two additions out of the three made by the assessing officer. In other words, the Tribunal deleted the additions of Rs.23,735 and Rs.2,45,856. In so far as addition of Rs.17,67,071 made on account of difference in stock, the Tribunal has restored the issue to learned Commissioner (Appeals) for de novo adjudication. Thus, in view of the changed scenario because of the decision of the Tribunal in the quantum proceedings, in our opinion, the issue relating to imposition of penalty under Section 271AAB of the Act has to be restored back to the assessing officer as factual position relating to the additions based on which penalty was imposed have changed.

Needless to mention, before imposing penalty, the assessing officer must extend adequate opportunity of being heard to the assessee by following the procedure laid down in the Statute.