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Facts
The assessee appealed against a penalty order passed u/s 271(1)(c) for Assessment Year 2013-14, which arose from an alleged wrong claim of deduction of Rs. 4,86,76,333/- u/s 80-IAB of the Income-tax Act. The quantum additions related to this claim were previously set aside by the ITAT to the CIT(A) for re-adjudication and are still pending finality.
Held
The Tribunal observed that the quantum proceedings, forming the basis of the penalty, had not reached finality and were pending before the CIT(A). Therefore, the Tribunal restored the penalty appeal to the CIT(A) for fresh adjudication, instructing them to consider the outcome of the quantum appeal.
Key Issues
Whether a penalty under Section 271(1)(c) for an alleged wrong deduction claim is sustainable when the quantum additions forming the basis of the penalty are still pending final adjudication by appellate authorities.
Sections Cited
Income-tax Act, 1961, Section 250(6), Section 271(1)(c), Section 80-IAB
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Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI PRADIP KUMAR KEDIA & SHRI VIMAL KUMAR
first appellate order dated 31.12.2018 passed u/s 250(6) of the Income-tax Act, 1961, hereafter referred to as the “Act”, which in turn arises from the penalty order passed u/s 271(1)(c) of the Act dated 29.03.2018 passed by the Assessing Officer for the assessment year 2013-14 in question. the outset, submitted that penalty has been imposed u/s 271(1)(c) of the Act alleging wrong claim qua deduction of Rs. 4,86,76,333/- u/s 80-IAB of the Act.
In this case learned counsel pointed out that the subject matter of addition was challenged before the appellate authorities. The ITAT in order dated 1.11.2019, has eventually set aside the quantum additions to the file of the CIT(A) to re-decide the issue in the light of certain submissions made on behalf of the assessee. The quantum additions are thus pending for adjudication before the learned CIT(A).
In the light of submissions made on behalf of the assessee where the quantum proceedings have not reached finality and is subject matter of appeal before the CIT(A), it will be expedient to restore the present appeal against penalty imposed also to the file of CIT(A). The CIT(A) shall adjudicate the grievance of the assessee towards imposition of penalty u/s 271(1)(c) keeping in mind the outcome of quantum appeal which led to penalty in question. The CIT(A) shall pass speaking order after giving opportunity. Matter is thus set aside for adjudication by the CIT(A) in accordance with law.
Order pronounced in open court on 30.10.2024.