RANJU SAYALL,NEW DELHI vs. ACIT, CENTRAL CIRCLE-8, NEW DELHI

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ITA 5044/DEL/2018Status: DisposedITAT Delhi14 October 2021AY 2011-123 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that since the quantum addition, which formed the basis for the penalty, was restored to the CIT(A) for fresh decision, the penalty appeal could not survive. Therefore, the penalty appeal was also restored to the CIT(A).

What were the facts?

The assessee appealed against a penalty imposed under Section 271(1)(c) of the Income Tax Act. The penalty was levied on additions made in the quantum assessment proceedings. The quantum appeal related to these additions had been restored back to the CIT(A) for fresh adjudication.

What were the issues?

Whether a penalty under Section 271(1)(c) can survive when the underlying quantum addition is restored for fresh adjudication. The procedural fairness of not providing an opportunity of being heard was also raised.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘F’ NEW DELHI

Before: SHRI KUL BHARAT & SHRI O.P. KANT

Hearing: 06.10.2021Pronounced: 14.10.2021

Date of hearing 06.10.2021 Date of pronouncement 14.10.2021 ORDER PER O.P. KANT, AM:

The present appeal by the assessee is directed against order dated 23.05.2018 passed by the learned Commissioner of Income Tax (Appeals)-24, New Delhi [in short ‘the learned CIT(A)’] for the assessment year 2011-12 raising the grounds as under:

1. 1. The Learned Commissioner of Income-tax (Appeals) (‘Ld. CIT(A)’) has grossly erred both on facts and in law in confirming the action of the Learned Assessing Officer (‘Ld. AO’) of imposing penalty u/s 271(1)(c) of the Act, without considering the fact that no opportunity of being heard was given to the Appellant.

2. Without prejudice to Ground No. 1, the Ld. CIT (A) has grossly erred both on facts and in law in confirming the penalty order passed by the Ld. AO, without acknowledging the fact that the quantum appeal was still pending before the Hon’ble ITAT and that there was no requirement to pass the penalty order till the disposal of appeal proceedings before the ITAT.

3.

Without prejudice to Ground No. 1 & 2 above, the Ld. CIT (A) has grossly erred both on facts and in law in confirming the penalty imposed by Ld. AO by holding that the assessee has provided inaccurate particulars of its income, in complete ignorance of the fact that the quantum appeal is still pending to be adjudicated by Hon’ble ITAT.

4. The Appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal

at any time before or at the time of hearing of the appeal.

2. At the outset, the learned counsel for the assessee submitted that the quantum addition, in respect of which the penalty has been levied, has been restored back to the file of the learned CIT(A) for deciding the appeal afresh. It is further submitted that as the quantum addition has already been sent back to the file of the learned CIT(A), the present appeal for levy of penalty under Section 271(1)(c) of the Income-tax Act, 1961 (in short ‘the Act’) cannot survive and accordingly the same may be restored back to the file of the learned CIT(A).

2. On the contrary, the learned DR did not controvert the facts.

3. We have heard the rival submissions of the parties and perused the relevant material on record. We find that the Assessing Officer has levied the penalty in respect of the cash and jewellery found and addition for which enhanced by the learned CIT(A) to Rs. 35,69,810/-. Further, we find that in quantum proceeding, the Tribunal in has restored this issue to the learned CIT(A) for deciding the appeal afresh. The relevant part of the order of the Tribunal is reproduced as under:

“7. We have heard rival submission of the parties and perused the relevant material on record. In our opinion, the assessee is a non-resident and, if she could not file documentary evidence in support of her claim before the lower authorities, in the interest of substantial justice, one more opportunity can be granted to the assessee to file required documentary evidences. In view of the facts and circumstances of the case, we feel it appropriate to restore both the issues of addition of the jewelry and cash found to the file of the Ld. CIT(A) for deciding afresh with the direction to the assessee to produce all the necessary evidences in support of her claim on first date of hearing before the learned CIT(A). The learned CIT(A) is also directed to examine claim of the assessee for benefit of CBDT Instruction (supra) in view of the decisions cited by the learned counsel of the assessee. It is needless to mention that both the assessee as well as the Assessing Officer shall be afforded adequate opportunity of being heard. The grounds of the appeal raised by the assessee are accordingly allowed for statistical purposes.”

4.

In view the above facts, as the quantum addition, in respect of which penalty has been levied by the Assessing Officer, has already been restored back to the file of the learned CIT(A), the impugned penalty levied by the Assessing Officer cannot survive. Accordingly, we restore the present appeal to the file of the learned CIT(A) for deciding afresh after passing order in quantum proceeding.

5.

In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 14th October, 2021

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