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

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.

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.