ARIEF NAGOOR ARIEF,CHENNAI vs. DCIT NON CORP CIRCLE 11, CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -13, Chennai, dated 02.02.2018, confirming the penalty levied by the Assessing Officer under Section 271D of the Income-tax Act, 1961 (in short 'the Act') for the assessment year 2013-14.

Shri T. Vasudevan, the Ld.counsel for the assessee, submitted that in the quantum addition made by the Assessing Officer under Section 68 of the Act, this Tribunal remitted back the matter to the file of the Assessing Officer for reconsideration. According to the Ld. counsel, when the Assessing Officer disbelieved the claim of the assessee that funds were received from various persons and addition was made under Section 68 of the Act treating the same as the assessee’s own money, the provisions of Section 269SS of the Act cannot be applied consequentially. Therefore, according to the Ld. counsel, there cannot be any levy of penalty under Section 271D of the Act. Moreover, this Tribunal set aside the orders of the authorities below in the quantum appeal and remitted back the matter to the file of the Assessing Officer for reconsideration. Therefore, according to the Ld. counsel, at this stage, it cannot be said that there was violation of Section 269SS of the Act which warrants levy of penalty under Section 271D of the Act.

We heard Dr. S. Pandian, the Ld. Departmental Representative also. It is not in dispute that the Assessing Officer made disallowance under Section 68 of the Act treating the funds said to be received by the assessee from others as the assessee’s own funds and also levied penalty under Section 271D of the Act. The assessee now claims that this Tribunal remitted back the matter to the file of the Assessing Officer for reconsideration with regard to quantum addition under Section 68 of the Act. In those factual circumstances, this Tribunal is of the considered opinion that the levy of penalty under Section 271D of the Act needs to be re-examined. Accordingly, orders of both the authorities below are set aside and the issue of levy of penalty under Section 271D of the Act is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter in the light of the material that may be filed by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes.