KESARWANI ZARDA BHANDAR,ALLAHABAD vs. JCIT(C.C), ALLAHABAD, ALLAHABAD

Facts

The assessee filed appeals against penalties levied by the Assessing Officer under section 271(1)(c) of the Income Tax Act for assessment years 2004-05 to 2009-10, which were upheld by the CIT(A). These penalties arose from the Department's alleged misinterpretation of a High Court judgment while giving effect to it, leading to incorrect ITNS 150 preparation. Subsequent clarifications by the Tribunal and CIT(A) indicated the need for re-calculation, making the matter currently subjudice with the Assessing Officer.

Held

The Tribunal restored the matter of quantifying the penalty under section 271(1)(c) of the Act back to the Assessing Officer. The AO is directed to re-quantify the penalty by duly considering the orders of the Hon'ble High Court, Income Tax Appellate Tribunal, and CIT(A) in computing the surviving quantum additions and the tax sought to be evaded.

Key Issues

Whether the quantification of penalty under section 271(1)(c) of the Income Tax Act was correct, given the department's previous misinterpretation of a High Court judgment and subsequent clarifications by the Tribunal and CIT(A).