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Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI
Before: SHRI KUL BHARAT & SHRI O.P. KANT
ORDER PER O.P. KANT, AM:
This appeal by the assessee is directed against order dated 22/02/2018 passed by the learned Commissioner of Income-tax (Appeals)-30, New Delhi [in short ‘the Ld. CIT(A)’] in relation to penalty levied under section 271(1)(c) of the Income-tax Act, 1961 (in short ‘the Act’) for assessment year 2007-08. The grounds raised by the assessee are reproduced as under:
1. That the Commissioner of Income Tax (Appeals) [‘CIT (A)’] erred on facts and in law in not holding that the impugned order dated 22-
02-2018, levying penalty under section 271 (1 )(c) of the Income- tax Act, 1961 (‘the Act’), is without jurisdiction, bad in law and void-ab-initio. 1.1. That the CIT (A) erred in not appreciating that the impugned penalty order was passed without recording requisite satisfaction in the assessment order passed under section 143(3) r.w.s. 153A of the Act, which is sine qua non for assumption of jurisdiction. 1.2. That the CIT (A) erred in not appreciating that the impugned penalty order was passed in undue haste, without affording adequate opportunity of being heard to the appellant, contrary to the express provisions of section 275(1 )(a) of the Act. Without prejudice: 2. That the CIT (A) erred in confirming penalty of Rs. 12,687 levied under section 271 (1 )(c) of the Act in respect of addition of Rs.37,675, made on account of difference in peak balance in alleged foreign bank account maintained by the appellant. 2.1. That the CIT (A) erred in not appreciating that penalty was levied solely on the basis of findings given in the assessment proceedings (wherein, too, no reasons have been given), failing to appreciate that penalty proceedings are separate and independent from assessment proceedings. 2.2. That the CIT (A) erred in not appreciating that addition in the case of the appellant was made solely on the basis of some unauthenticated/ general/ vague information/ piece of paper, the source of which is also unknown and thereby the same could not be the basis for levying penalty under section 271(1 )(c) of the Act 2.3. That the CIT (A) erred in not considering the order passed by the Tribunal in the quantum appeal preferred by the appellant for assessment year 2006-07, wherein primary addition made on account of alleged deposit in foreign bank account has been deleted and set-aside to the file of the Assessing Officer. 2.4. That the CIT (A) erred in not appreciating that the addition made in assessment year 2007-08, the year under consideration, was merely nominal differential increase in the alleged peak balance which was already added in assessment year 2006-07 and consequently, the said addition was completely dependent upon finding in assessment year 2006-07, which has already been deleted and set aside by the Tribunal. 2.5. That the CIT (A) erred in not considering the order passed by the CIT (A), deleting the penalty levied under section 271(1 )(c) of the Act for the assessment year 2006-07. The appellant craves leave to add, alter, amend or vary from the aforesaid grounds of appeal at or before the time of hearing.
2. At the outset, the learned Counsel of the assessee submitted that the addition in dispute for which the impugned penalty is levied and sustained by the Learned CIT(A), has already been set aside by the Tribunal and the matter has been restored to the file of the Assessing Officer for deciding afresh and therefore, the penalty in dispute does not survive. The Learned DR though relied on the order of the lower authorities, however, could not controvert the position of the addition for which penalty was levied.
We have heard both the parties, who appeared through video conference facility. We find that addition of residuary balance of peak credit in foreign bank account with HSBC, Geneva, was made by the Assessing Officer and which was sustained by the Learned CIT(A). The Assessing Officer levied penalty under section 271(1)(c) of the Act of ₹ 12,687/- for furnishing inaccurate particulars of the income, in relation to the addition sustained. But we find that Tribunal in for AY : 2007-08 has set aside the order of the Ld. CIT(A) and restored the matter back to the file of the Assessing Officer to adjudicate afresh observing as under: “3. We find that similar matter in assessee’s own case for the assessment year 2006-07 in ITA No. 5448/Del/2016 stands adjudicated by the Co-ordinate Bench of ITAT Delhi wherein it was held that “the Assessing Officer informed the assessee about the copy of bank account obtained under DTA. However, a contradictory observation has been made in para 6 of the assessment order that the requisite information from Swiss Banking Authority had not been received. We, therefore, considering the totality of the facts as discussed hereinabove, set aside the impugned order and restore the matter back to the file of the Assessing Officer to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard and by confronting the assessee with the documents which relates to him. 4s regards to the legal issue relating to the validity of the assessment u/s 153A of the Act, it is noticed that the assessee in para 2.20 of his written submissions dated 22.08.2016 stated that the search team had confronted the assessee with unauthentic document. In the present case, it is not clear as to whether any authentic document was confronted to the assessee or not. The Assessing Officer also mentioned that a reference was made on 27.11.2012 but it is not clear for which purpose the said reference was made. So in the absence of clear facts on record, this issue is also set aside to the file of the Assessing Officer to be adjudicated afresh, in accordance with law after providing a due and reasonable opportunity of being heard to the assessee". Since, the verbatim of the order, in the present case is also same, and in the absence of any change in the material facts, we hereby remand the matter back to the file of the Assessing Officer to adjudicate afresh, in accordance with law after providing opportunity of being heard to the assessee.”
3.1 In our opinion, once the addition in dispute has been set aside and restored to the file of the Assessing Officer to be decided afresh, the penalty levied in respect of the addition cannot be survived and it would be at the discretion of the Assessing Officer to re-initiate the penalty proceedings as per law. Accordingly, penalty levied in the case of the assessee is deleted. The grounds of the appeal of the assessee are accordingly allowed.
In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 16th July, 2021.