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Facts
The assessee filed an appeal against a penalty order for AY 2011-12, which arose from a penalty order passed by the AO under section 271(1)(c) of the Income Tax Act. The assessee's counsel pointed out that the quantum appeal was pending before the CIT(A) and had not been decided.
Held
The Tribunal noted that the penalty is directly linked to the quantum addition. If the quantum addition is deleted by the CIT(A), the penalty would not stand. Therefore, the penalty appeal was remitted back to the CIT(A) with a direction to adjudicate it based on the outcome of the quantum proceedings.
Key Issues
Whether the penalty appeal should be decided before or after the quantum appeal is adjudicated by the CIT(A)?
Sections Cited
271(1)(c)
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Income Tax Appellate Tribunal, RAJKOT BENCH (SMC
Before: DR. ARJUN LAL SAINI
आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2011-12, is directed against the order passed by the Learned Commissioner of Income Tax(Appeals), National Faceless Appeal Centre, Delhi [in short “the Ld. CIT(A)/NFAC”], dated 26.06.2024, which in turn arises out of a penalty order passed by Assessing Officer (in short ‘the AO”) u/s 271(1) (c ) of ITA 654/Rjt/2024 Smt. Ilaben Mahendrabhai Dave v. ITO the Income Tax Act, 1961 (hereinafter referred to as “the Act”), vide order dated 26.06.2019.
At the outset, the Ld. Counsel for the assessee, begins by pointing out that quantum appeal of the assessee is pending before the Ld. CIT(A) and has not been decided by the Ld. CIT(A), therefore, the penalty appeal, under consideration, under section 271(1)(c) should be remitted back to the file of the ld. CIT(A) to decide the penalty, as per the outcome of quantum proceedings.
On the other hand, the Ld. DR for the revenue submitted that penalty and quantum proceeding are different proceedings, therefore, this penalty appeal may be decided by this Tribunal, instead of sending back to the file of the ld. CIT(A).
4.I have heard both the parties and I note that quantum appeal has not been been decided by the Ld. CIT(A). The penalty is very much linked with quantum addition, if the quantum addition is deleted by ld. CIT(A), then penalty does not have any leg to stand. The Ld. Counsel for the assessee informed the Bench that quantum appeal of the assessee, vide appeal No. CIT(A), Rajkot- 1/10306/2019-20, is pending before ld. CIT( A) for adjudication. Therefore, I remit this penalty appeal back to the file of the ld. CIT(A), with the direction to adjudicate the appeal as per the outcome of the quantum proceedings.
5.In the result, this appeal of the assessee is allowed for statistical purposes only.
ITA 654/Rjt/2024 Smt. Ilaben Mahendrabhai Dave v. ITO
Order is pronounced on 23 /01/2025 in the open court.