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Facts
The assessee's appeal is against an order confirming a penalty under Section 271(1)(c) for AY 2010-11. An ex-parte assessment order determined income of Rs.10 crores, and subsequently, a penalty of Rs.3,08,01,120/- was imposed.
Held
The Tribunal held that since the quantum addition appeal for the same assessment year was set aside and restored to the CIT(A)/NFAC, the penalty, being consequential, should also be decided afresh after the quantum appeal is disposed of.
Key Issues
Whether the penalty under Section 271(1)(c) can be confirmed when the underlying quantum appeal has been set aside and restored for fresh adjudication.
Sections Cited
271(1)(c)
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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
Assessment Year : 2010-11 Shri Abhijit Uttamrao Vs. ACIT, Circle-3, Deshmukh, Aurangabad. Vithal Niwas, Ganesh Par Road, Parli Vaijanath Beed, Beed- 431515. PAN : AGWPD1032B Appellant Respondent Assessee by : Shri Prateek Jha Revenue by : Shri Amol Khairnar Date of hearing : 29.01.2025 Date of pronouncement : 31.01.2025 आदेश / ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 03.07.2024 passed by Ld. CIT(A)/NFAC confirming the penalty u/s 271(1)(c) of the IT Act for the assessment year 2010-11.
Facts of the case, in brief, are, that the assessee is an individual and an ex-parte assessment order was passed in his case wherein income of Rs.10 crores was determined by the Assessing Officer. Subsequently, penalty of Rs.3,08,01,120/- was also imposed u/s 271(1)(c) of the IT Act by an ex-parte order. Ld. CIT(A)/NFAC dismissed the appeal against the penalty order by observing that the quantum proceedings have already reached finality.
In this regard, it was contended by Ld. Counsel of the assessee that the quantum order on the basis of which penalty was imposed has already been set-aside by a Co-ordinate Bench of this Tribunal in assessee’s own case vide for assessment year 2010-11 order dated 31.12.2024 wherein the appeal against the quantum addition has been restored back to the file of Ld. CIT(A)/NFAC for deciding the appeal afresh on merits of the case. Under the above facts of the case, it was requested by Ld. Counsel of the assessee that the penalty being consequential in nature, the order confirming the penalty u/s 271(1)(c) passed by Ld. CIT(A)/NFAC may also be set-aside and the matter may kindly be remitted back to the file of Ld. CIT(A)/NFAC to decide the penalty appeal afresh after deciding the appeal in quantum case.
4. Ld. DR appearing from the side of the Revenue did not raise any serious objection to the request made by the assessee.
We have heard Ld. Counsels from both the sides and perused the material available on record. In this regard, we find that it is the contention of Ld. Counsel of the assessee that the appeal against the quantum addition has not been finalized yet and still pending for disposal before Ld. CIT(A)/NFAC. Admittedly, the penalty u/s 271(1)(c) should not be imposed before disposal of first appeal in quantum case. Therefore, considering the totality of the facts of the case, we deem it appropriate to set-aside the impugned order passed by Ld. CIT(A)/NFAC and remand the matter back to his file with a direction to decide the penalty appeal afresh as per fact & law after disposing of quantum appeal of the same assessment year. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and produce requisite documents/evidences/explanations in support of grounds of appeal without taking any adjournment under any pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass an appropriate order as per