SHREE SARVODAY CREDIT CO-OP SOCIETY LIMITED,RAJKOT, GUJARAT vs. ITO WARD 1(2)(1), RAJKOT, VATIAKA, RAJKOT, GUJARAT

At the time of hearing, the Ld. AR submitted that, except for the difference in the assessment years and the respective provisions under which the penalty proceedings were initiated, the issues involved in these appeals are interconnected with the corresponding quantum proceedings. With regard to Assessment Year 2015-16, the Ld. AR submitted that the quantum appeal has already been set aside by the Ld. CIT(A) vide order dated 28.01.2026, whereby the matter was restored to the file of the Assessing Officer with a direction to examine the issue afresh. Accordingly, it was submitted that the penalty proceedings under section 271B, being consequential to the quantum proceedings, also deserve to be restored to the file of the Assessing Officer for fresh adjudication in accordance with the outcome of the quantum proceedings. In respect of ITA Nos. 101 and 102, relating to Assessment Year 2018-19, the Ld. AR submitted that the corresponding quantum appeals are still pending adjudication before the Ld. CIT(A). Therefore, these penalty appeals may also be restored to the file of the Ld. CIT(A), with a direction to adjudicate the penalty proceedings after deciding the corresponding quantum appeals and, if necessary, to pass appropriate orders in accordance with law. As regards ITA Nos. 103, 118 and 119/Rjt/2026, relating to Assessment Year 2020-21, the Ld. AR submitted that the corresponding quantum proceedings have already been restored to the file of the Assessing Officer for fresh adjudication vide order dated 13.01.2026. Since the quantum proceedings are presently pending before the Assessing Officer, the connected penalty proceedings may also be restored to his file for consideration after disposal of the quantum proceedings.

We have heard the rival submissions and perused the material available on record. It is an undisputed position that the penalty proceedings in all these appeals are connected with the respective quantum proceedings. Insofar as Assessment Year 2015-16 is concerned, since the corresponding quantum proceedings have already been restored to the file of the Assessing Officer, the connected penalty proceedings also deserve to be restored to the file of the Assessing Officer. Accordingly, ITA No. 102/Rjt/2026 is restored to the file of the Assessing Officer with a direction to adjudicate the penalty proceedings afresh after disposal of the quantum proceedings and in accordance with law. In respect of Assessment Year 2020-21, since the corresponding quantum appeal have already been restored to the file of the Assessing Officer and are pending adjudication, the connected penalty proceedings in ITA Nos. 103, 118 and 119/Rjt/2026 are also restored to the file of the Assessing Officer. The Assessing Officer shall adjudicate the penalty proceedings, if necessary, after deciding the corresponding quantum proceedings and in accordance with law.

Coming to ITA Nos. 101 and 102/Rjt/2026 relating to Assessment Year 2018- 19, we note that the corresponding quantum appeal is presently pending before the Ld. CIT(A). Therefore, these penalty appeals are also restored to the file of the Ld. CIT(A), with a direction to adjudicate the penalty proceedings after disposing of the corresponding quantum appeals and, if the circumstances so warrant, to pass appropriate orders in accordance with law.

In terms of the above observations and directions, all the appeals filed by the assessee are allowed for statistical purposes.