MAGSTIC PREMISES P.LTD,THANE vs. DCIT CEN CIR 2, THANE

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ITA 2036/MUM/2017Status: DisposedITAT Mumbai17 August 2018AY 2009-104 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the quantum appeal had been restored to the CIT(A) for fresh adjudication. Consequently, the penalty appeal was also remitted to the CIT(A) to be decided after the quantum appeal is resolved.

What were the facts?

The assessee's income was significantly increased during scrutiny assessment, leading to a penalty under Section 271(1)(c). The CIT(A) confirmed the penalty ex-parte as the assessee did not appear. The assessee appealed the penalty confirmation.

What were the issues?

Whether the penalty under Section 271(1)(c) can survive when the quantum appeal, on which the penalty is based, has been restored for fresh adjudication. The procedural fairness of the ex-parte penalty confirmation.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3),Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “I”, MUMBAI

Before: SHRI SHAMIM YAHYA (AM) & SHRI RAM LAL NEGI (JM)

For Appellant: Shri Mani Jain (AR)
For Respondent: Shri Chaudhary Arunkumar Singh (DR)
Hearing: 07/08/2018Pronounced: 17/08/2018

O R D E R

PER RAM LAL NEGI, JM

1.

This appeal has been filed by the assessee against the order dated 25.01.2017 passed by the Commissioner of Income Tax (Appeals) (for short ‘the CIT (A)’)-11, Pune, for the assessment year 2009-10, whereby the Ld. CIT (A) has dismissed the appeal filed by the assessee against assessment order passed u/s 271(1)(c) of the Income Tax Act, 1961 (for short ‘the Act’).

2.

Brief facts of the case are that the assessee filed its return of income for the assessment year under consideration declaring the total income of Rs. 1,71,466/-. Scrutiny assessment, u/s 143 (3) of the Act was completed and the total income of the assessee was declared at Rs. 1,74,71,470/- after making addition of Rs. 1,73,00,000/- u/s 69 of the Act. In the first appeal, the Ld. CIT(A) confirmed the addition made by the AO.

2 Assessment Year: 2009-10 2(a). Accordingly, the AO initiated the initiated penalty proceedings u/s 271(1)(c) of the Act and levied penalty of Rs. 53,45,701/- under the said section. The assessee challenged the penalty order before the CIT(A). However, the assessee did not appear before the Ld. CIT(A) despite service of notices issued from time to time. Ultimately, the Ld. CIT(A) passed exparte order and confirmed the penalty levied by the AO.

3.

Aggrieved by the order of Ld. CIT (Appeals), the assessee has preferred this appeal before the Tribunal on the following effective ground:-

On the facts and circumstances of the appellant’s case and in law the Ld. CIT (A) erred in confirming the A.O. action in imposing penalty of Rs. 53,45,701/- by invoking the provisions of Section 271(1)(c) of the Income Tax Act, 1961.

4.

At the outset the Ld. counsel for the assessee submitted before us that in the present case the Tribunal has restored the quantum appeal to the file of the Ld. CIT(A) for adjudicating the appeal afresh after hearing the assessee. The Ld. counsel further submitted that since the quantum appeal has been restored to the Ld. CIT(A), the penalty does not survive.

5.

On the other hand the Ld. departmental representative did not controvert the fact that the Tribunal has sent the quantum appeal back for fresh adjudication on merits after hearing the assessee.

6.

We have perused the material in the light of the submissions of the Ld. counsel for the assessee. As pointed out by the Ld. counsel the coordinate Bench has sent the quantum appeal back to the Ld. CIT(A) for fresh adjudication. The relevant portion of the order of the coordinate Bench reads as under:-

3 Assessment Year: 2009-10 “We heard the parties and perused the record. We notice that the assessee has been adjournment repeatedly and hence the Ld. CIT (A) has decided the issue without hearing the assessee. However, in the interest of natural justice, we are of the view that the assessee should be given one more opportunity to present its case before Ld. CIT (A). However, since the assessee was seeking adjournments repeatedly before Ld. CIT (A), we are of the view that the assessee should bear a cost. Accordingly we direct the assessee to pay a cost of Rs. 5,000/- (Rupees Five thousand) within one month from the date of receipt of this order to the credit of Income Tax Department. Subject to the payment of the cost cited above, we restore all the issues to the file of the Ld. CIT (A) for adjudicating them afresh after hearing the assessee.”

7.

Since, the coordinate Bench has restored the quantum appeal to the Ld. CIT(A) for adjudicating the same on after hearing the assessee, the present appeal cannot be decided at this stage. Hence, we deem it necessary to restore the same to the Ld. CIT(A) for passing necessary order after deciding the quantum appeal. We, therefore, remit the penalty appeal to the Ld. CIT(A) for taking further necessary action after deciding the quantum appeal.

In the result, appeal filed by the assessee for assessment year 2009- 2010 is treated as allowed for statistical purposes.

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