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Facts
The assessee filed an appeal against a penalty of Rs. 1,18,203/- levied under Section 270A/271A, which had been confirmed by the CIT(A). The assessee contended that the penalty order was defective because the original quantum assessment, forming the basis of the penalty, was previously set aside by the ITAT and sent back for fresh consideration.
Held
The Tribunal found that the CIT(A) erroneously confirmed the penalty by reasoning that the quantum appeal was decided against the assessee, even though the underlying quantum additions were set aside by the ITAT. Consequently, the Tribunal set aside the CIT(A)'s order and restored the penalty issue to the Assessing Officer for a de novo order, directing consideration of any consequential assessment order.
Key Issues
Whether the penalty confirmed by CIT(A) is valid when the underlying quantum assessment, on which the penalty is based, was set aside by the ITAT and remitted for fresh consideration.
Sections Cited
Section 270A, Section 271A, Section 147, Section 144B, Section 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ALLAHABAD BENCH “SMC”, ALLAHABAD
Before: SHRI ANADEE NATH MISSHRA & SHRI SUBHASH MALGURIA
2020-21 against impugned appellate order dated 17/01/2025 (DIN & Order No.ITBA/NFAC/S/250/2024- 25/1072291426(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. In this appeal the assessee has raised the following grounds:
“1. Because the order passed by the Ld. CIT(A) is defective and is liable to be set aside as he has confirmed the Penalty of Rs.1,18,203/- when the original Assessment Order was set aside by the Hon'ble ITAT, Allahabad Bench and the order was sent back for the Ld. Assessing Officer for fresh consideration of assessee's claims.
Because the order passed by the Ld. CIT (A) is defective and is liable to be set aside as the Penalty has been confirmed by the Hon'ble CIT(A) by giving the reasoning that "Since, the quantum appeal has been decided against the appellant with regard to the above additions, the penalty order levying penalty of Rs.1,18,203/- u/s 270A is hereby confirmed" whereas the original Assessment Order has been set aside and sent back to Ld. Assessing Officer for fresh consideration by Hon'ble ITAT, Allahabad Bench with regard to the above additions.
Because the authorized representative of the assessee did not file any replies to the assessment questionnaire and the assessee was misled and was totally unaware that no response is being filed to the questions.
Because the order appealed against is contrary to the fact, law and principles of natural justice.”
(B) At the time of hearing, there was no representation from assessee’s side. In absence of any representation from assessee’s side, the learned Sr. Departmental Representative for Revenue was heard. The subject matter of this appeal is the levy of penalty u/s 270A of the Act vide order dated 23/03/2023 passed by the Assessing Officer u/s 270A of the Act. The learned CIT(A) dismissed the assessee’s appeal against levy of penalty u/s 271A of the Act amounting to Rs.1,18,203/-. The relevant portion of the order of learned CIT(A) is reproduced as under:
5. On perusal of the information available with the department, it is found that penalty order u/s 270A passed by Assessing Officer vide order dt. 23.03.2023, against which this appeal has been filed, is enumerated from the Assessment order passed vide order dt. 06.09.2022. In this connection, it pertinent to mention that assessee preferred the appeal against the order; passed u/s 147 read with section 144B on 06.09.2022 before ld. CIT(A). However, Ld. CIT(A) NFAC has dismissed the assessee's plea on the quantum issue by passing the order u/s 250 on 12.03.2024 with ITBA No. ITBA/NFAC/S/250/2023-24/1062458429(1) and sustained the addition made by the Assessing Officer. Since, the quantum appeal has been decided against the appellant with regard to the above additions, the penalty order levying penalty of Rs.1,18,203/- u/s 270A is hereby confirmed.
(C) Aggrieved, the assessee has filed the present appeal in Income Tax Appellate Tribunal. On perusal of grounds of appeal, we find that the assessee has contended in ground No. 1 & 2 of the appeal that the impugned order of the learned CIT(A) is defective as penalty has been confirmed by the learned CIT(A) on the erroneous reasoning that quantum has been decided against the assessee, whereas the dispute regarding quantum addition was set aside and sent back to the file of the Assessing Officer for fresh consideration by Allahabad Bench of Income Tax Appellate Tribunal. In view of the foregoing, the impugned appellate order of the learned CIT(A) is set aside and the issue regarding levy of penalty u/s 271A of the Act is restored back to the file of the Assessing Officer with the direction to pass de novo order in accordance with law, if deemed fit, after providing reasonable opportunity to the assessee, and after taking due consideration of consequential assessment order passed in pursuance of the aforesaid order of the Allahabad, Tribunal.
(D) In the result, the appeal of the assessee is partly allowed.
(Order pronounced in the open court on 04/06/2025)