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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Chandra Poojari, AM & Shri George George K, JM
Per George George K., JM
This appeal at the instance of the Department is directed against the Commissioner of Income-tax (Appeals)’s order dated 19.10.2016. The relevant assessment year is 2008- 2009.
Brief facts of the case are as follow:-
2.1 The assessee is an individual, who is an NRI. For the assessment year 2008-2009, the assessment was completed by denying exemption claimed u/s 54F of the Income-tax Act, 1961. On further appeal before the CIT(A), the view taken by the Assessing Officer was upheld. Subsequent to the CIT(A)’s
ITA No.511/Coch/2016. 2 Dr.K.P.Ali. order, penalty u/s 271(1)(c) of the I.T.Act was imposed amounting to Rs.28,95,080.
Aggrieved by the order imposing penalty, the assessee preferred an appeal to the first appellate authority. The CIT(A) noted that the quantum assessment set aside by ITAT to the A.O. for fresh examination. The CIT(A) held that since the quantum assessment has been set aside the penalty no more remains valid and quashed the same.
Aggrieved by the order of the CIT(A) deleting the penalty imposed u/s 271(1)(c) of the I.T.Act, the Department has filed this appeal raising the following grounds:-
“1. The order of the learned Commissioner of Income Tax (Appeals)-III, Kochi is contrary to the law and facts of the case. 2. The learned Commissioner of Income Tax(Appeals) has erred in treating the penalty levied u/s 271(1)(c) 'no more remains valid', by holding that the Hon'ble IT AT has passed an order in ITA No.229/Coch/2013 dated 17/01/2014 setting aside the order of the ld.CIT(Appeals), Calicut confirming the quantum addition made by the A.O.
The learned Commissioner of Income Tax(Appeals) has erred in dieting the penalty of Rs.28,95,080/ - levied u/ s 271 (1 )(c) relying on the Hon'ble ITAT's above order.
The learned Commissioner of Income Tax (Appeals)-III has erred in not appreciating the fact that set aside assessment as per the direction of the Honble ITAT was completed by the A.O. rejecting the assessee's claim of deduction u/s 54F.
ITA No.511/Coch/2016. 3 Dr.K.P.Ali. 5. The learned Commissioner of Income Tax(Appeals)-III has also erred in ignoring the fact that an appeal No,.ITA-ll / Inter/ EKM/CIT(A)/15-16 dated 10/04/2015 was filed by the assessee against the giving effect order of Honble ITAT.
For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned Commissioner of Income Tax (Appeals)-III, Kochi may be cancelled and that of the A.O. may be restored.”
4.1 The learned Departmental Representative relied on the grounds raised.
4.2 An adjournment application was filed on behalf of the assessee. However, we reject the adjournment application and proceeded to dispose off the appeal on merits.
We have heard the learned DR and perused the material on record. Admittedly the ITAT had set aside the order of the CIT(A) in the quantum assessment and restore of the issues to the files of the Assessing Officer to take appropriate decision in accordance with law. Therefore, the penalty proceedings that is arising out of the quantum assessment order cannot survive and the same has been rightly quashed by the CIT(A). Needless to say, on fresh assessment orders, if penalty proceedings are initiated, the Department is at liberty to impose penalty in accordance with law. It is ordered accordingly.
ITA No.511/Coch/2016. 4 Dr.K.P.Ali. 6. In the result, the appeal filed by the Revenue is dismissed.
Order pronounced on this 02nd day of March, 2018.
Sd/- Sd/- (Chandra Poojari) (George George K.) ACCOUNTANT MEMBER JUDICIAL MEMBER
Cochin ; Dated : 02nd March, 2018. Devdas*
Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT (International Taxation) Bangalore. 4. The CIT(A) – III, Kochi. 5. DR, ITAT, Cochin 6. Guard file.
BY ORDER,
(Asstt. Registrar) ITAT, Cochin