ERICSSON TELEPHONE CORPORATION INDIA AB (INDIA BRANCH),NEW DELHI vs. DDIT, NEW DELHI

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ITA 3461/DEL/2011Status: DisposedITAT Delhi04 July 2018AY 2000-014 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal decided to remit the penalty proceedings to the Assessing Officer. This was because the quantum additions, on which the penalties were based, had already been remitted back to the Assessing Officer for fresh determination.

What were the facts?

The Assessing Officer made additions to the assessee's income for assessment years 2000-01 and 2001-02. The CIT(A) confirmed certain additions, leading to the imposition of penalties under Section 271(1)(c). The assessee appealed against the confirmation of these penalties.

What were the issues?

Whether penalty proceedings under Section 271(1)(c) should be sustained when the underlying additions to income have been remitted back to the Assessing Officer for fresh adjudication.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCHES : B : NEW DELHI

Before: SHRI R.S. SYAL & SHRI K. NARASIMHA CHARY

For Appellant: Shri Sajit Parakh, CA, Shri Santdas, Shri Tarun Gupta, CA, Shri Girish Dave, Advocate
For Respondent: Shri Surender Pal, Sr. DR
Hearing: 02.07.2018Pronounced: 04.07.2018

Assessee By : Shri Sajit Parakh, CA, Shri Santdas Wadhwani, CA, Shri Tarun Gupta, CA, Shri Girish Dave, Advocate Department By : Shri Surender Pal, Sr. DR Date of Hearing : 02.07.2018 Date of Pronouncement : 04.07.2018 ORDER PER R.S. SYAL, VP: These two appeals filed by the assessee arise out of the orders passed by the CIT(A) on 04.04.2011 confirming the penalties imposed by the & 3462/Del/2011 Assessing Officer u/s 271(1)(c) of the Income-tax Act, 1961 in relation to the assessment years 2000-01 & 2001-02.

2.

Briefly stated, the facts of the case are that certain additions were made by the Assessing Officer in his orders passed u/s 143(3) for the captioned years on 28.03.2003 and 24.03.2004 respectively. The assessee preferred appeals before the ld. CIT(A), who confirmed certain additions.

Pursuant to that, penalties of Rs.2,99,40,068 (for the A.Y. 2000-01) and Rs.1,97,95,292/- (for the A.Y. 2001-02) were imposed. The assessee is aggrieved against the confirmation of such penalties.

3.

We have heard the rival submissions and perused the relevant material on record. Vide separate orders passed today in quantum proceedings, we have remitted the matter to the file of Assessing Officer with a direction to decide the issues of income earned from Indian concerns towards fee for technical services and allocation of expenses afresh in the light of certain directions given. Since the matter in quantum proceedings has been restored to the file of the Assessing Officer, we are of the considered opinion that it would be in the fitness of things if the matter 2 conformity with the view taken by the Assessing Officer in the proceedings pursuant to the directions given by the Tribunal. Our view in restoring the penalty to the AO is fortified by the judgment of the Hon’ble Supreme Court in the case of Mohd. Mohatram Farooqui vs. CIT (SC) 2010-TIOL- 23-SC-IT in which it has been held that if addition is restored to the AO, then penalty should also be restored. The Hon’ble jurisdictional High Court in Sanjay Gupta vs. CIT (2014) 366 ITR 18 (Del) has also held that where the quantum has been remanded to the AO, the question of penalty on account of the said amount being treated as undisclosed income, should also be remanded to the AO. We, therefore, set aside the impugned orders and remit the matter to the file of the AO for determining the question of imposition or otherwise of the penalties, after the passing of fresh assessment orders on this count. Needless to say, the assessee will be allowed a reasonable opportunity of hearing in this regard. & 3462/Del/2011 4. In the result, the appeals filed by the assessee are allowed for statistical purposes.

The order pronounced in the open court on 04.07.2018.

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