ACIT, CENTRAL CIRCLE- 7, NEW DELHI vs. DEVYANI FOODS INDUSTRIES PVT. LTD., NEW DELHI

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ITA 7213/DEL/2017Status: DisposedITAT Delhi09 February 2021AY 2012-133 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the quantum appeal had been set aside and remanded to the Assessing Officer. Therefore, the penalty issue was also remanded back to the Assessing Officer for fresh adjudication.

What were the facts?

The Assessing Officer made additions to the assessee's income for ad-hoc disallowances of expenses and depreciation, leading to penalty proceedings. The CIT(A) deleted the penalty, which the Revenue appealed.

What were the issues?

Whether the penalty imposed under Section 271(1)(c) should be sustained when the underlying assessment order has been remanded. The propriety of the ad-hoc disallowances made by the AO.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3)

AI-generated summary — verify with the full judgment below

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

Before: SHRI R. K. PANDA & MS SUCHITRA KAMBLE

For Appellant: Ms. Nidhi Srivastava, CIT
Hearing: 09.02.2021Pronounced: 09.02.2021

PER SUCHITRA KAMBLE, JM

1.

This appeal is filed by the Revenue against the order dated 25/09/2017 passed by CIT(A)- 24, New Delhi for Assessment Year 2012-13.

2.

The grounds of appeal are as under:-

“1. The order of the Ld.CIT(A) is not correct in law and facts.

2. On the facts and circumstances of the case, the CIT(A) has erred in law in deleting the penalty of Rs.2,13,86,841/- imposed by Assessing Officer u/s 271(1)(c) of the Income Tax Act, 1961.”

3.

The assessment was completed u/s 143(3) of the Income Tax Act, 1961 vide order dated 28/03/2014 at total income of Rs. 20,04,15,670/- against the returned loss amounting to Rs.11,69,00806/- after making addition of Rs. 18,42,70,000/- on account of 50% of ad-hoc disallowance under the head other expenses as the assessee failed to furnish any details along with documentary evidence and Rs. 13,30,46,472/- on account of 50% ad-hoc disallowance of depreciation. The penalty proceedings were initiated u/s 271(1)(c) of the Income Tax Act for concealment of income. The Assessing Officer passed the penalty order vide order dated 30/03/2017 thereby imposing the penalty of Rs. 2,13,86,841/-.

4.

Being aggrieved by the penalty order, the assessee filed before the CIT(A). The CIT(A) deleted the penalty and allowed the appeal of the assessee.

5.

The Ld. DR relied upon the assessment order and the order of the penalty.

6.

The Ld. AR submitted that the quantum appeal filed before the Tribunal has been set aside to the file of the Assessing Officer.

7.

We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the quantum appeal has been decided by the Tribunal and remanded back to the file of the Assessing Officer, therefore, it will be appropriate to remand back the penalty issue as well to the file of the Assessing Officer. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Thus, the appeal of the Revenue is partly allowed for statistical purpose.

8.

In result, the appeal of the Revenue is partly allowed for statistical purpose.

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