VITTHAL MANIK DHAWALE,,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 8,, PUNE

Shri Suhas Bora appearing on behalf of the assessee submitted at the outset that in assessment proceedings, the Assessing Officer had made addition of Rs.1,67,42,000/- on account of unexplained cash deposits in saving bank account of assessee. Penalty proceedings u/s. 271(1)(c) of the Act were initiated on the aforesaid addition. The Assessing Officer vide order dated 30-03-2015 levied penalty of Rs.57,14,633/- on the said addition. The assessee filed appeal against the aforesaid addition. The First Appellate Authority upheld the same. In second appeal before the Tribunal, the assessee succeeded. The Tribunal vide order dated 05-04- 2018 set aside the issue back to the file of Assessing Officer. Thus, the entire addition was knocked down by the Tribunal. The ld. AR furnished a copy of the order of Tribunal in ITA No. 980/PUN/2014 for assessment year 2009-10 decided on 05-04-2018.

Shri Pankaj Garg representing the Department fairly admitted that the Tribunal in quantum appeal by the assessee has restored the issue back to the file of Assessing Officer. The ld. DR submitted that the present penalty appeal can also be restored to the file of Assessing Officer.

We have heard the submissions made by representative of rival sides and have perused the orders of authorities below. The assessee is in appeal against levy of penalty u/s. 271(1)(c) of the Act. The Co-ordinate Bench of Tribunal in quantum appeal by the assessee in ITA No. 980/PUN/2014 (supra) has restored the issue back to the file of Assessing Officer for de-novo adjudication. Since, the substratum for levy of penalty has eroded, the penalty u/s. 271(1)(c) of the Act would not survive.

In the result, the appeal of assessee is allowed.