OM PRAKASH DUDANI,ASANSOL vs. ITO, WD-2(4), , ASANSOL

The assessee in the present case in an individual who filed his return of income for the year under consideration on 25.08.2008 declaring a total income of Rs. 3,98,737/-. In the assessment completed u/s 143(3) vide an order dated 16.12.2010, the total income of the assessee was determined by the AO at Rs. 15,35,085/- after making inter alia addition of Rs. 5,93,500/- u/s 40(a)(ia) of the Act for non-deduction of tax at source from ‘godown rent’ and ‘office rent’ and addition of Rs. 4,83,837/- u/s 68 by treating the loans received by the assessee from his friends and relatives as unexplained cash credit. On confirmation of the said two additions by the Ld. CIT(A) in the quantum proceedings, show cause notice u/s 271(1)(c) was issued by the AO and since the explanation offered by the Assessment Year: 2008-09 Shri Om Prakash Dudani assessee in response to the said notice was not found satisfactory by him, penalty of Rs. 3,73,339/- was imposed by the AO u/s 271(1)(c) of the Act.

The penalty imposed by the AO u/s 271(1))(c) in respect of two additions of Rs. 5,93,500/- and Rs. 4,83,837/- was challenged by the assessee in the appeal filed before the Ld. CIT(A) and after considering the submission made by the assessee as well as the material available on record, the Ld. CIT(A) cancelled the penalty imposed by the AO in respect of the addition of Rs. 5,93,500/- whereas the penalty imposed in respect of the other addition of Rs. 4,83,837/- made u/s 68 on account of loans taken from friends and relatives was confirmed by him. Still aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal before the Tribunal.

I have heard the arguments of both the sides and also perused the relevant material available on record. As submitted by the learned counsel for the assessee, the addition of Rs. 4,83,837/- made by the AO u/s 68 and confirmed by the Ld. CIT(A) was challenged by the assessee in the appeal filed before the Tribunal in the quantum proceedings and vide its order dated 26.04.2017 passed in the Tribunal has remitted the said issue back to the Ld. CIT(A) for deciding the same afresh on merit after giving proper and sufficient opportunity of being heard to the assessee. The issue relating to the said addition in respect of which the impugned penalty u/s 271(1)(c) is imposed thus is now pending before the Ld. CIT(A) in the quantum proceedings and as agreed by the learned

Assessment Year: 2008-09 Shri Om Prakash Dudani representatives of both the sides, the consequential issue relating to the penalty, which is involved in the present appeal, is also required to be sent back to the Ld. CIT(A) for deciding the same afresh depending on his final decision in the quantum proceedings. I accordingly set aside the impugned order of the Ld. CIT(A) confirming the penalty imposed by the AO u/s 271(1)(c) in respect of addition of Rs. 4,83,837/- made u/s 68 and remit the matter back to him for deciding the same afresh after taking into consideration his final decision on the corresponding issue which is pending with him in the quantum proceedings.

In the result, the appeal of the assessee is treated as allowed for statistical purpose. Order Pronounced in the Open Court on 19th November, 2019.