P.M.ABDUL NAZEER, vs. THE ASSISTANT COMMISSIONER OF INCOME TAX,

PDF · subscribers
WP(C)/12654/2023HC KeralaKLHC01027897202321 December 2023Author: HONOURABLE MR. JUSTICE D. K. SINGH6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the penalty orders passed under Sections 271(1)(c) and 271AAB of the Income Tax Act, 1961, must be revised in light of the fresh assessment orders that would be passed on remand. The Court reasoned that the revenue did not dispute this fact, and the assessee's submission was accepted. The ratio decidendi is that penalty orders are consequential to assessment orders, and any revision in the assessment necessitates a review of the penalties. The Court directed the respondent (Assistant Commissioner of Income Tax) to revise the penalty orders after fresh/revised assessment orders are passed for assessment years 2008-09 to 2014-15. The petitioner was to be afforded an opportunity of hearing as per Section 75(1A) before revising the penalty orders. The Assessing Officer was directed to expedite the revision proceedings, preferably within one month.

What were the facts?

The petitioner, P.M. Abdul Nazeer, filed a writ petition challenging penalty orders dated March 31, 2023, issued by the Assistant Commissioner of Income Tax. These penalty orders pertained to assessment years 2008-09 to 2014-15 and were passed under Sections 271(1)(c) and 271AAB of the Income Tax Act, 1961. The original assessment orders for these years were passed on March 31, 2016. Appeals against these assessment orders were dismissed by the CIT(A) on December 2, 2021. Subsequently, penalty proceedings, which were kept in abeyance, revived. The petitioner had approached the Income Tax Appellate Tribunal (ITAT) against the CIT(A)'s order. The ITAT modified the assessment orders and remanded the matter to the assessing officer for fresh assessment. The petitioner's counsel argued that fresh assessment orders would necessitate revision of the penalty orders.

What were the issues?

1. Whether the penalty orders passed under Sections 271(1)(c) and 271AAB of the Income Tax Act, 1961, need to be revised in light of fresh assessment orders passed on remand by the Income Tax Appellate Tribunal? Assessee's contention: The assessee argued that following the ITAT's order remanding the matter for fresh assessment, any penalty orders passed based on the original assessment orders would require revision. The assessee relied on the principle that penalties are consequential to the assessment and should align with any revised assessment. Revenue's contention: The revenue, through its learned Standing Counsel, did not dispute the assessee's contention. The revenue conceded that in light of fresh assessment orders passed on remand, the penalty orders would indeed need to be revised.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 271AAB,Section 75(1A)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH THURSDAY, THE 21ST DAY OF DECEMBER 2023 / 30TH AGRAHAYANA, 1945 WP(C) NO. 12654 OF 2023 PETITIONER: P.M.ABDUL NAZEER, AGED 59 YEARS S/O LATE KUNHABDULLA, RESIDING AT FIELD HOUSE, KUTTIADI, KOZHIKODE-673 508. BY ADVS. M.P.SHAMEEM AHAMED AKHIL PHILIP MANITHOTTIYIL RESPONDENT: THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, KOZHIKODE, AAYAKAR BHAVAN, NORTH BLOCK, NEW ANNEX BLDG., MANANCHIRA, KOZHIKODE -673001. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

JUDGMENT Dated this the 21st day of December, 2023 The present writ petition has been filed for quashing of Exts. P5 to P11 penalty orders dated 31.03.2023 passed by the respondent against the petitioner in respect of the assessment years 2008-09 to 2014-15 under Sections 271(1)(c) and 271AAB of the Income Tax Act, 1961. The assessment order in respect of the assessment year 2008-09 to 2014-15 were passed on 31.03.2016 and for penalty proceedings show cause notices were issued under Section 271(1)(c) for the assessment years 2008-09 to 2013-14 and for the assessment year 2014-15, notice under Section 271AAB was issued. The petitioner-assessee had filed reply to the said show cause notices. The petitioner had filed appeals against the said assessment orders before the CIT(A). During the pendency of the appeals before the CIT(A), the penalty proceedings were kept in abeyance. The CIT (A) has vide common order dated 02.122021 dismissed the appeals affirming the assessment orders. Since as the appeals got dismissed, the penalty proceedings revived and the petitioner was issued with notices on 27.03.2023. Aggrieved by the order passed the CIT(A), the petitioner has approached the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal had modified the assessment orders and remanded the matter to the assessing officer vide Ext.P1 order for passing a fresh assessment order. The learned counsel for the petitioner submits that on remand, fresh assessment order can be passed and in view of the fresh assessment orders passed, the penalty orders may be revised.

2.

The learned Standing Counsel for the Income Tax Department does not dispute this fact that in light of the fresh assessment orders passed on remand, the penalty orders have to be revised.

Thus, considering the aforesaid fact and the stand of the learned counsel for the Income Tax Department as well as the submission advanced on behalf of the learned counsel for the petitioner, the present writ petition is disposed of, with a direction to the respondent to revise the penalty orders in light of the fresh/revised assessment orders passed in respect of the assessment year 2008-09 to 2014-15 on remand. The petitioner should be afforded an opportunity of hearing as provided under Section 75(1)A before revising the penalty orders. Needless to mention that the Assessing Officer shall expedite the proceedings for revising the penalty orders, preferably within a period of one month. DINESH KUMAR SINGH JUDGE AP

Appendix — schedule of exhibits
APPENDIX OF WP(C) 12654/2023 PETITIONER EXHIBITS EXHIBIT P-1 COPY THE ORDER DATED 28.10.2022 ISSUED BY THE INCOME TAX APPELLATE TRIBUNAL EXHIBIT P-2 COPY OF THE NOTICE NO. ITBA/PNL/F/271(1) (C)/2022-23/1051419183(1) DATED 27.02.2023, ISSUED BY THE RESPONDENT, FOR THE ASSESSMENT YEARS 2008-09 TO 2013-14 EXHIBIT P-3 COPY OF THE NOTICE NO. ITBA /PNL/F/271AAB(1) /2022-23/ 1051418785 (1) DATED 27.02.2023, ISSUED BY THE RESPONDENT, FOR THE ASSESSMENT YEAR 2014-15 EXHIBIT P-4 COPY OF THE EMAIL DATED 30.03.2023 SENT BY THE RESPONDENT TO THE PETITIONER'S CHARTERED ACCOUNT EXHIBIT P-5 COPY OF THE PENALTY ORDER ALONG WITH THE COMPUTATION SHEET DATED 31.03.2023 FOR THE ASSESSMENT YEAR 2008-09 UNDER SECTION 271 (1) (C) OF THE ACT EXHIBIT P-6 COPY OF THE PENALTY ORDER ALONG WITH THE COMPUTATION SHEET DATED 31.03.2023 FOR THE ASSESSMENT YEAR 2009-10 UNDER SECTION 271 (1) (C) OF THE ACT EXHIBIT P-7 COPY OF THE PENALTY ORDER ALONG WITH THE COMPUTATION SHEET DATED 31.03.2023 FOR THE ASSESSMENT YEAR 2010-11 UNDER SECTION 271 (1) (C) OF THE ACT EXHIBIT P-8 COPY OF THE PENALTY ORDER ALONG WITH THE COMPUTATION SHEET DATED 31.03.2023 FOR THE ASSESSMENT YEAR 2011-12 UNDER SECTION 271 (1) (C) OF THE ACT EXHIBIT P-9 COPY OF THE PENALTY ORDER ALONG WITH THE COMPUTATION SHEET DATED 31.03.2023 FOR THE ASSESSMENT YEAR 2012-13 UNDER SECTION 271 (1) (C) OF THE ACT EXHIBIT P-10 COPY OF THE PENALTY ORDER ALONG WITH THE COMPUTATION SHEET DATED 31.03.2023 FOR THE ASSESSMENT YEAR 2013-14 UNDER SECTION 271 (1) (C) ACT EXHIBIT P-11 COPY OF THE PENALTY ORDER ALONG WITH THE COMPUTATION SHEET DATED 31.03.2023 FOR THE ASSESSMENT YEAR 2014-15 UNDER SECTION 271 AAB OF THE ACT WP(C) No.12654 of 2023 6 RESPONDENT ANNEXURES ANNEXURE R(A) TRUE COPY OF THE RELEVANT SCREEN SHOT. ANNEXURE R(B) TRUE COPY OF THE RELEVANT WHATSAPP SCREEN SHOT.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →