ACIT, NEW DELHI vs. MS SUDHA DEWAN, NEW DELHI

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ITA 6159/DEL/2015Status: DisposedITAT Delhi29 November 2017AY 2007-085 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that since the quantum assessment was set aside and restored to the Assessing Officer, the penalty should also be set aside to the Assessing Officer to be decided in consonance with the quantum appeal.

What were the facts?

The Assessing Officer made additions to the assessee's income and initiated penalty proceedings under Section 271(1)(c). The ITAT restored the entire assessment proceedings to the Assessing Officer for a fresh assessment. The CIT(A) deleted the penalty, considering the ITAT's order.

What were the issues?

Whether the penalty order can survive when the underlying assessment order has been set aside and restored for fresh assessment. Whether the CIT(A) erred in deleting the penalty without waiting for the AO's order giving effect to the ITAT's direction in the quantum appeal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 275(1A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES: ‘F’, NEW DELHI

Before: SHRI R.S. SYAL & SMT. BEENA A PILLAI

For Appellant: Shri Atiq Ahmad, Sr.D.R

PER BEENA A PILLAI, JUDICIAL MEMBER

1.

The present penalty appeal has been filed by revenue against order dated 22/04/13 passed by Ld. CIT (A)-10, New Delhi for assessment year 2007-08 on the following grounds of appeal:

1. CIT(A) has erred in law in deleting penalty in violation of provisions of sub section (1A) of section 275 of the IT Act without waiting for the order of the AO giving effect to the order of ITAT in quantum appeal.

ITA 6159/Del/15 Assessment Year 2007-08 Ms Sudha Dewan 2. CIT(A) has erred in law in deleting penalties in violation of machinery provided as per sub section (1a) of section 275 of the IT Act when the ITAT has ordered a fresh assessment.

3.

CIT(A) has erred in law and facts that if the assessment order is set aside, the penalty order does not survive without going into merits of the order of higher authority directing a fresh assessment.

2.

Brief facts of the case are as under: Assessee filed its return of income showing total income of Rs. 38,10,707/- as on 31/10/07. The return was processed under 143(1) and scrutiny assessment under section 143(3) was completed on 31/12/09 at an income of Rs. 3,43,23,330/-. Assessing officer invoked provisions of section 145(3) of the Act and rejected the books of account resulting into a GP addition. Assessing officer initiated penalty proceedings under section 271 (1) (c) of the Act. 2.1. Assessee thereafter preferred appeal before the Ld. CIT (A) to dismiss the appeal, following which assessing officer issued the penalty notice under section 271 (1) (c) of the Act. Assessing officer levied penalty of Rs. 1, 02, 70, 549/-. 2.2. Aggrieved by the penalty order passed by Ld. AO, assessee preferred appeal before the Ld. CIT (A).In the meanwhile assessee preferred appeal before this Tribunal against the quantum addition. This Tribunal restored back the entire assessment proceedings to the file of the AO. Ld. CIT (A) while deciding the penalty appeal took into consideration, order passed by this Tribunal in quantum appeal and deleted the penalty imposed by Ld. AO under section 271 (1) (c) of the Act.

ITA 6159/Del/15 Assessment Year 2007-08 Ms Sudha Dewan 3. Aggrieved by the order of Ld. CIT (A) the revenue is in appeal before us now. 3.1. The Ld. DR contended that when this Tribunal in the quantum appeal has set aside the issue back to Ld. AO, the Ld. CIT (A) should have not deleted the penalty. Ld. DR submitted that the penalty order may also be set-aside back to the file of Ld. AO to be decided in consonance with quantum appeal, which has already been set aside by this Tribunal in quantum appeal. 3.2. Ld. AR do not have any objections to the same.

4.

We have perused the submissions advanced by both sides on the basis of the records placed before us.

5.

As this Tribunal has already set aside the quantum appeal back to the file of Ld. AO, it would be just and proper that penalty may also be set aside to the assessing officer to decide in consonance with the quantum addition. Accordingly we set aside the penalty back to the file of assessing officer.

6.

In the result appeal filed by revenue stands allowed for statistical purposes. Order pronounced in the open court on 29th November, 2017.

Sd/- Sd/- (R.S. SYAL) (BEENA A PILLAI) Vice President Judicial Member Dated: 29th November, 2017. *gmv

ITA 6159/Del/15 Assessment Year 2007-08 Ms Sudha Dewan

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