MR SHEKHAR DADARKAR PROP. M/S S.D. CONSTRUCTION,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX-31(3), MUMBAI

Facts

The assessee filed a return of income, and subsequent assessment led to additions. The assessee appealed to the CIT(A), who confirmed some additions. A second appeal to the Tribunal resulted in setting aside certain issues to the AO. The AO reframed the assessment, and the CIT(A) again confirmed additions related to TDS non-deduction and deemed rent.

Held

The Tribunal held that the original assessment order was replaced by a set-aside order, rendering the penalty order based on the original assessment infructuous. Consequently, the appeal against the penalty was also infructuous.

Key Issues

Whether the penalty levied under Section 271(1)(c) is sustainable when the original assessment order was set aside and replaced by a subsequent order, making the penalty infructuous.