SHRI KAILASH CHANDRA GARG,INDORE vs. ACIT CENTRAL -2, INDORE

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ITA 850/IND/2017Status: DisposedITAT Indore27 February 2019AY 2005-065 pages
AI SummaryAllowed

What did the Tribunal hold?

The tribunal held that since the original assessment order, which formed the basis for the penalty, was set aside by the ITAT, the penalty order cannot survive. Furthermore, a subsequent assessment order passed after the ITAT's remand did not make any additions.

What were the facts?

The assessee's income was initially assessed at Rs. 2,77,218, but later reopened and assessed at Rs. 2,29,07,220. The CIT(A) confirmed this assessment. The ITAT had previously set aside the assessment order on which the penalty was levied.

What were the issues?

Whether a penalty order can survive when the assessment order on which it was based has been set aside by a higher tribunal. Whether penalty is sustainable when subsequent assessment order results in no addition.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 254

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI V. DURGA RAO & SHRI MANISH BORAD

For Appellant: Shri R.S. Mandora, A.R
For Respondent: Shri K.G. Goyal, Sr. D.R
Hearing: 25.02.2019Pronounced: 27.02.2019

आदेश / O R D E R

PER V. DURGA RAO, J.M: This appeal filed by the assessee is directed against order of the CIT(A)-III, Indore dated 29.9.2017 for the assessment year 2005-06.

[ITA 850/Ind/2017] [Shri Kailash Chandra Garg, Indore

2.

Facts are in brief that the assessee is an individual filed his return of income for the assessment year 2005-06 on 31.10.2005 by declaring total income of Rs.2,77,218/-.

1.

Subsequently, the case of the assessee was reopened and assessment was completed u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) on 28.3.2013 by assessing total income of Rs.2,29,07,220/-.

On appeal, the Ld. CIT(A) confirmed the order of the A.O.

Assessee carried matter in appeal before the Hon'ble ITAT.

The Hon'ble ITAT has remitted the matter back to the A.O. again for fresh adjudication in for the A.Y. 2005-06 by order dated 16.1.2018. Subsequently, the A.O. has passed assessment order u/s 143 r.w.s.

147/254 of the Act dated 20.12.2018. Before us, the Ld. Counsel for the assessee has submitted that the basis on which penalty was levied by the ACIT, Circle-2, Indore dated 17.12.2015 has been set aside by the Hon'ble ITAT in [ITA 850/Ind/2017] [Shri Kailash Chandra Garg, Indore for the A.Y. 2005-06 dated 16.1.2018 and submitted that penalty order cannot survive.

3.

On the other hand, the Ld. D.R. has not raised any objection.

4.

We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The penalty has been levied in this case based on the assessment order dated 28.3.2013.

The very same order has been set aside by the Hon'ble ITAT in for the A.Y. 2005-06 dated 16.1.2018. Subsequently, assessment was completed u/s 143(3) r.w.s. 147/254 of the Act dated 20.12.2018. The return of income filed by the assessee was originally accepted by the A.O. without making any addition. The present penalty order confirmed by the Ld. CIT(A) was [ITA 850/Ind/2017] [Shri Kailash Chandra Garg, Indore based on the original assessment order dated 28.3.2013.

Once that order has been already set aside by the Hon'ble ITAT, penalty order cannot survive. Even otherwise, consequent to the order passed by the Hon'ble ITAT, the A.O. passed the assessment order and no addition is made.

Therefore, the penalty order passed by the A.O. confirmed by the Ld. CIT(A) cannot survive. In view of the above, the appeal filed by the assessee has to be allowed. Accordingly, the appeal filed by the assessee is allowed.

5.

In the result, the appeal filed by the assessee is allowed.

Order was pronounced in the open court on 27 .02.2019.

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