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Facts
The assessee filed an appeal against the order of the CIT(A) which confirmed the penalty levied under section 271AAC(1) of the Act. The assessee argued that the penalty should not survive as the quantum proceedings were remitted to the AO for fresh consideration by a Co-ordinate Bench.
Held
The Tribunal held that since the penalty was based on the quantum proceedings, and those proceedings were remitted back to the AO for a fresh consideration, the penalty proceedings should also be remitted back to the AO.
Key Issues
Whether the penalty order under section 271AAC(1) is sustainable when the underlying quantum proceedings have been remitted to the Assessing Officer for fresh consideration.
Sections Cited
271AAC(1), 250, 143(3)
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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K
Per Laxmi Prasad Sahu, Accountant Member :
This is an appeal filed by the assessee against CIT(A)’s order vide DIN & Order No: ITBA/NFAC/S/250/2024-25/1075226330(1) dated 29.03.2025.
The sole and substantive issue raised by the assessee in this appeal is regarding penalty levied under section 271AAC(1) of the Act. The learned Counsel submitted that the learned CIT(A) issued notices under section 250 of the Act on 23.03.2024, 07.06.2024, 17.01.2025 and 27.03.2024 for furnishing information on or before 27.03.2024, 14.06.2024, 24.01.2025, 28.03.2025 on ITBA portal. The learned Counsel submitted that the Hon’ble ITAT in quantum proceedings has been remitted to the AO observing as under:
“6. Considering the rival submissions as well as prayer of the assessee and in the interest of justice, we remit the issue to the AO for fresh consideration and decision as per law. The assessee is directed to update its email id, communication address and other details and file necessary documents that would be essential and required for substantiating his case and for proper adjudication by the revenue authorities. Needless to say that reasonable opportunity of being heard be given to the assessee. The assessee is directed to cooperate with the proceedings and in case of further default, the assessee shall not be entitled to any leniency.”
He filed Paper Book containing page Nos.1 to 14 and in page Nos.13 and 14 of his Order of the quantum proceedings of the Co-ordinate Bench in which is available before the learned CIT(A). However, he has passed the Order without going by the direction issued by the Hon’ble Tribunal since the Tribunal has given direction to the AO for a fresh consideration, therefore the penalty will not survive. On the other hand, the learned DR relied onthe Order of the lower authorities and submitted that the penalty Order passed by the Ao and confirmed by the CIT(A) will not be initiated only because of the quantum proceedings has been remitted back to the AO.
Considering the rival submissions, the learned CIT(A) has confirmed the penalty Order under section 271AAC(1) of the Act and passed Order on 29.03.2025. The Co-ordinate Bench in passed the Order on 12.07.2024 and has remitted to the AO for fresh consideration. The quantum proceeding has been remitted to the AO by the co-ordinate bench as per the above observations. Therefore, the penalty proceedings will also go back to the AO since the penalty is based on the quantum proceedings. Therefore, this issue is remitted back to the AO for a fresh consideration.
In the result, appeal filed by the assessee is allowed for statistical purposes.