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Facts
The assessee is in appeal against the order of the CIT(A) which upheld the levy of penalty imposed by the AO under Section 271(1)(c) of the Income Tax Act, 1961. The quantum addition on which the penalty was computed was yet to be finalized as the issue had been set aside by the Tribunal to the CIT(A).
Held
The Tribunal held that the penalty was not sustainable as the quantum addition, which formed the basis for the penalty, had not been finalized. The impugned order was set aside and the issue was relegated to the AO for re-examination.
Key Issues
Whether the penalty levied under Section 271(1)(c) is sustainable when the quantum addition forming the basis for the penalty is yet to be finalized.
Sections Cited
271(1)(c)
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Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
आयकर अपील"य अ"धकरण,च"डीगढ़ "यायपीठ, च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ "नधा"रण वष" / Assessment Year: 2011-12 Shri Ajmer Singh, Vs The ITO, C/o Shri Tej Mohan Singh, Advocate, Ward 6(5), # 527, Sector 10-D, Chandigarh. Mohali. "थायी लेखा सं./PAN NO: CWJPS6206H अपीलाथ"/Appellant ""यथ"/Respondent Assessee by : Shri Tej Mohan Singh, Advocate Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr.DR Date of Hearing : 05.06.2025 Date of Pronouncement : 06.06.2025 PHYSICAL HEARING O R D E R PER RAJ PAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 21.08.2024 passed for assessment year 2011-12.
The solitary grievance of the assessee is that ld. CIT (Appeals) has erred in upholding the levy of penalty amounting A.Y. 2011-12 2 to Rs.35,50,641/- which was imposed by the AO u/s 271(1)(c) of the Income Tax Act,1961.
With the assistance of ld. Representative, we have gone through the record carefully. It emerges out from the record that Tribunal vide ITA-1439/CHD/2019 has set aside this issue to the file of CIT (Appeals). Thus, the quantum addition on whose foundation penalty is to be computed under sub-clause
(iii) of Section 271(1)(c) of the Act is yet to be finalized. Hence, the present penalty is not sustainable upon the assessee. The impugned order is set aside and the issue is relegated to the file of AO for re-examining the issue whether assessee deserves to be visited with penalty or not after the decision of the CIT (Appeals) in the quantum appeal against the assessment order which has been restored by the Tribunal to the CIT (Appeals).
In the result, appeal of the assessee is allowed for statistical purposes.