SARVAM DEVELOPERS,VADODARA, GUJARAT vs. INCOME TAX OFFICER, WARD 1(2)(2), VADODARA, GUJARAT
Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI NARENDRA PRASAD SINHA
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”),
National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated
29.03.2025 passed for A.Y. 2017-18. 2. The assessee has taken the following grounds of appeal:
“1. Whether on the facts and circumstances of the case and in law, the Ld.
Commissioner of Income-tax (Appeals-NFAC) was justified in passing appellate order u/s 250 of the Act wherein penalty of Rs. 72,000 has been imposed on the addition of Rs.12,00,000 despite the fact that the quantum appeal to which such penalty relates to has been set aside by the Hon’ble Commissioner of Income-tax (Appeals-NFAC) vide order dated 29/03/2025.”
The brief facts and issue for consideration before us is that the Counsel for the assessee has contended that once the assessment proceedings have been set aside to the file of the Assessing Officer for de-novo consideration, Sarvam Developers vs.ITO Asst. Year –2017-18 - 2–
then the penalty order, is not sustainable in the eyes of law. The Counsel for the assessee submitted that while framing the appellate order, CIT(Appeals) has dismissed the appeal of the assessee against levy of penalty, with the following observations:
“3. I have considered the grounds of appeal and seen the submission/statement made by the appellant and perused the penalty order passed u/s 271AAC(1) of IT Act,
1961. The Appellant has taken grounds which are all related to levying the penalty u/s 271AAC(1) of the IT Act. In this case, the quantum addition has been set aside vide appellate order dated 29.03.2025. Therefore, the grounds of appeal have become infructuous. As such it has become infructuous, accordingly, this appeal is dismissed.
Hence, the grounds of appeal of the appellant are dismissed as infrustuous.
In the result, the appeal of the appellant is dismissed.”
Therefore, as per the Counsel for the assessee, the appeal of the assessee should have been allowed.
In response, the Ld. DR submitted that on a reading of order passed by CIT (Appeals), the reasonable interpretation is that since the matter in quantum proceedings has been restored to the file of the Assessing Officer for de-novo consideration, then this inevitably means that penalty cannot be levied and hence the appeal of the assessee is infructuous per se.
In our view, the only limited issue for consideration before us is that once (admittedly) the appeal of the assessee has been restored to the file of the Assessing Officer for de-novo consideration with respect to quantum proceedings, then there cannot be any basis for sustaining levy of penalty with respect to those additions. Both parties before us are in agreement that there is no dispute with regards to this legal proposition. Therefore, we make it clear that since the matter relating to quantum proceedings has been restored to the file of the Assessing Officer by CIT(Appeals), then the penalty Sarvam Developers vs.ITO Asst. Year –2017-18 - 3–
proceedings in relation such quantum additions are also directed to be restored to the file of the Assessing Officer.
In the result, the appeal of the assessee is allowed for statistical purposes. This Order is pronounced in the Open Court on 04/08/2025 (NARENDRA P. SINHA) JUDICIAL MEMBER Ahmedabad; Dated 04/08/2025
TANMAY, Sr. PSआदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to :
1. अपीलाथŎ / The Appellant
2. ŮȑथŎ / The Respondent.
3. संबंिधत आयकर आयुƅ / Concerned CIT
4. आयकर आयुƅ(अपील) / The CIT(A)-
5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाडŊ फाईल / Guard file.
आदेशानुसार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt.