Loading judgment…
Facts
The assessee's assessment for A.Y. 2008-09 resulted in an addition of income and a penalty under section 271(1)(c), which was confirmed by the CIT(A). Crucially, the quantum appeal relating to the underlying additions was previously remanded by the ITAT to the CIT(A) for fresh consideration and is still pending adjudication.
Held
Given that the quantum appeal, which forms the basis for the penalty, is pending fresh adjudication before the CIT(A), the tribunal restored the penalty proceedings under section 271(1)(c) back to the CIT(A). The CIT(A) is directed to pass a de novo order on penalty after the quantum appeal is decided and after providing a reasonable opportunity to both sides.
Key Issues
Whether the penalty levied under Section 271(1)(c) is justified when the underlying quantum additions are still subject to fresh consideration and awaiting a final decision.
Sections Cited
Section 271(1)(c), Section 143(3), Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ALLAHABAD BENCH “SMC”, ALLAHABAD
PER ANADEE NATH MISSHRA, A.M.: 1. The present appeal has been filed by the assessee against the impugned appellate order dated 19.03.2015 passed by the Income Tax Department, Gorakhpur under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred as to “the Act”) for the assessment year 2008-09. The grounds of appeal
of the assessee are as under: -
1. Because the Ld. CIT(A) erred in facts and law to pass the order under section 271(1)(c) on 05.03.2024 imposing the penalty of Rs. 3,04,000/- whereas a request letter was submitted before the Ld. AO to keep the penalty proceedings in abeyance till the disposal of appeal by the Hon’ble ITAT Circuit Bench Varanasi but without considering the request of the appellant the LAO has imposed the penalty which is bad in law and against the principle of natural justice and as such penalty imposed by LAO be quashed.
Because the Hon’ble ITAT Circuit Bench Varanasi vide order dated 17.07.2018 has remanded back the quantum appeal before the Ld. CIT (A)- NFAC, for fresh consideration.
Because the Ld. CIT (A) was not justified in dismissing the appeal of the appellant and confirm the penalty order as was passed by the LAO taking the ground that none appeared from the appellant side to argue the case whereas the CIT (A) was duty bound to pass the order on the basis of material available on record for which he failed.
Because the Ld. CIT (A) erred in facts and law to confirm the penalty imposed u/s 271(1)(c) of the If Act, whereas the fact is that neither there is Page 2 of 4 any concealment of particulars of income or furnishing of inaccurate particulars of such income by the appellant and hence confirming the penalty u/s 271(1)(c) is unjustified, bad in law, and against the principle of natural justice and the same deserves to be quashed.
Because on the facts and circumstances of the case the appellant deserves full relief from the stage of Hon’ble Income Tax Appellate Tribunal.
The appellant craves the right to add/modify/alter any others grounds of appeals during the course of hearing of the appeal.” 1.1 The appeal is barred by limitation by 60 days. The assessee has filed an application seeking condonation of delay in filing of this appeal. The application for condonation of delay is supported by an affidavit of the assessee. The Ld. Sr. Departmental Representative for Revenue did not express any objection to the delay being condoned. Being satisfied with the reasons sated in application seeking condonation of delay in filing of this appeal; therefore, we condone the delay in filing of this appeal and admit the appeal for decision on merits.
1. (2) The facts of the case, in brief, are that in this case the assessee is engaged in the business of wholesale grain dealer and rice manufacturer and the assessment was completed u/s 143(3) of the Act at Rs.15,39,490/- as against the returned income of the assessee of Rs.1,49,140/-. The Assessing Officer also initiated penalty proceedings under section 271(1)(c) of the Act. The Assessing Officer also passed order dated 19.03.2015 levying penalty u/s 271(1)(c) of the Act. Being aggrieved, the assessee filed appeal before the learned CIT(A) against the assessment order and also against the order imposing penalty under section 271(1)(c) of the Act. The learned CIT(A) has decided the appeal against order imposing penalty u/s 271(1)(c) of the Act and has dismissed the appeal of the assessee. Now, the assessee is in appeal before the Income Tax Appellate Tribunal against the confirmation of penalty by learned CIT(A).
(2.1). At the time of hearing before us, the Ld. Authorized Representative (“AR”) for the assessee submitted that the Income Page 3 of 4 Tax Appellate Tribunal (ITAT) Circuit Bench Varanasi, vide order dated 17.07.2018 has remanded back the quantum appeal to the Ld. CIT(A) for fresh consideration. She further submitted that the fresh order is yet to be passed by the Ld. CIT(A) in pursuance to the aforesaid order dated 17.07.2018 in the quantum appeal. She further submitted that the matter regarding levy of penalty u/s 271(1)(c) of the Act, which is a subject matter of the present appeal, should also be restored back to the file of the Ld. CIT(A), with the direction to pass fresh order after deciding the quantum appeal in pursuance to the aforesaid order dated 17.07.2018 of ITAT. The learned Departmental Representative for Revenue expressed no objection to this.
(3) Both sides were heard. Materials available on record have been perused. As representatives before us, the quantum appeal in respect of additions made in the assessment order is pending before the Ld. CIT(A) in pursuance of the aforesaid order dated 17.07.2018 of ITAT. In fitness of things, therefore and as Representatives of both sides are in agreement with this, the matter regarding levy of penalty u/s 271(1)(c) of the Act is also restored back to the file of the Ld. CIT(A) to pass de novo order, as deemed fit in accordance with law, after providing reasonable opportunity to both sides and after deciding quantum appeal in pursuance to the aforesaid order dated 17.07.2018 of ITAT.
In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 24/07/2025.