SHRI DEEPAK MADANLAL MALIWAL,AHMEDABAD vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-6(1), AHMEDABAD

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ITA 1036/AHD/2017Status: DisposedITAT Ahmedabad29 January 2019AY 2009-103 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that since the quantum additions were set aside, the basis for imposing the penalty no longer survived. Therefore, the action of the CIT(A) in sustaining the penalty was set aside.

What were the facts?

The assessee's appeal was against a penalty order under Section 271(1)(c) for AY 2009-10. The penalty was levied on disallowance of interest. However, the quantum additions that formed the basis for the penalty were subsequently set aside by a co-ordinate bench of the Tribunal.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying quantum additions have been set aside. Whether the penalty proceedings were validly initiated and conducted.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR

For Appellant: Shri Sakar Sharma, A.R, Shri Sumeet Kumar Verma

आदेश/O R D E R

PER PRADIP KUMAR KEDIA - AM:

The captioned appeal has been filed at the instance of the Assessee against the order of the CIT(A)-6, Ahmedabad (‘CIT(A)’ in short), dated 28.02.2017 arising in the penalty order dated 23.02.2016 passed by the Assessing Officer (AO) under S.

ITA No. 1036/Ahd/17 [Deepak M. Maliwal vs.DC IT] A.Y. 2009-10 - 2 -

271(1)(c) of the Income Tax Act, 1961 (the Act) concerning AY 2009-10.

2.

The grounds of appeal raised by the assessee read as under:

“1. The Ld. CIT (A) erred on facts and in law in confirming action of Assessing Officer levying penalty of Rs. 9,01,368/- without appreciating the fact that there was no initiation of penalty proceedings in the assessment order. 2. The Ld. CIT (A) erred on facts and in law in confirming action of Assessing Officer in issuing notice u/s 271(1)(c) r.w.s. 274 even though there was no initiation of penalty proceedings in the assessment order. 3. The Ld. CIT(A) erred on facts and in law in confirming action of Assessing Officer even though the notices issued u/s 271(1)(c) r.w.s. 274 were not in accordance with the provisions of the Act in as much as printed notice was issued in mechanical manner. 4. The Ld. CIT(A) erred on facts and in law in confirming action of Assessing Officer in levying penalty u/s 271(1)(c) on disallowance of interest of Rs. 28,33,624/- for furnishing of inaccurate particulars of income and concealment of income.”

3.

When the matter was called for hearing, the learned AR for the assessee submitted that the quantum additions/disallowances giving rise to the imposition of penalty in appeal has been set aside by the co-ordinate bench of Tribunal in ITA No. 1363/Ahd/2014, order dated 07.07.2017 in the quantum proceedings to the file of the CIT(A).

4.

In view of the fact that the quantum additions/disallowances itself has been set aside having regard to the appellate order of the ITAT in quantum proceedings, the very basis for imposition of penalty under s. 271(1)(c) does not survive at present. Therefore,

ITA No. 1036/Ahd/17 [Deepak M. Maliwal vs.DC IT] A.Y. 2009-10 - 3 -

the action of the CIT(A) towards sustaining penalty is set aside and restored back to the file of CIT(A) for fresh adjudication in the light of quantum appeal.

5.

In the result, the appeal of the Assessee is allowed for statistical purposes.

This Order pronounced in Open Court on 29/01/2019

Sd/- Sd/- (MAHAVIR PRASAD) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 29/01/2019 True Copy S. K. SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।

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