JSD STEEL (P) LTD.,NEW DELHI vs. ITO, NEW DELHI

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ITA 3638/DEL/2017Status: DisposedITAT Delhi27 September 2017AY 2011-124 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) was not justified in confirming the penalty as the quantum appeal was still pending. The issue was restored to the CIT(A) for fresh decision after the quantum appeal is decided.

What were the facts?

The assessee company failed to file its return of income for the assessment year 2011-12. After a notice under section 148, the assessee filed a return, but the AO made additions and levied a penalty under section 271(1)(c). The CIT(A) upheld the penalty.

What were the issues?

Whether penalty under section 271(1)(c) can be confirmed when the quantum appeal is still pending before the CIT(A). The validity of penalty proceedings initiated before the finalization of quantum assessment.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 148,Section 143(3)/147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: SHRI R.K.PANDA

Hearing: 27.09.2017

ORDER Per R.K.Panda, AM:

This appeal filed by the assessee is directed against the order dated 31st March, 2017 of the CIT(A)-II, New Delhi relating to assessment year, 2011-12. 2. Levy of penalty of Rs. 8,93,535/- u/s 271(1)(c) of the IT Act by the AO and upheld by the CIT(A) is the only issue raised by the assessee in the ground of appeal

3. The facts of the case, in brief, are that the assessee company had not filed its return of income for the impugned 2 (JSD Steel (P) Ltd.) assessment year. In response to notice u/s 148 of the IT act was issued on 21st February, 2014, the assessee filed its return of income on 16 March, 2015 declaring income of Rs. 16,79,349/-. The AO computed the assessment u/s 143(3)/ 147 on a total income of Rs. 45,71,040/- by making addition of Rs. 28,91,688/-. Subsequently, the AO levied penalty of Rs. 8,93,535/- u/s 271(1)(c) of the IT Act which has been confirmed by the CIT(A).

4. Aggrieved with such order of CIT(A), assessee is in appeal before Tribunal.

5.

The ld. Counsel for the assessee at the outset submitted that the quantum appeal is still pending before the CIT(A) and therefore, the order levying penalty u/s 271(1)(c) of the IT Act by the AO and upheld by the CIT(A) is not proper. In his alternate contention, he submitted that he has no objection if the matter is restored to the file of the CIT(A).

6.

The ld. DR also fairly conceded that he has no objection if the matter is restored to the file of the CIT(A) with a direction to decide the issue afresh after the quantum appeal is decided.

7.

After hearing both the sides, I find the quantum appeal is still pending before the CIT(A). Therefore, the CIT(A) was not justified in confirming the penalty levied by the AO u/s 271(1)(c) of the IT Act before passing of the order in the quantum proceeding. Considering the totality of the facts of the case and in the interest of justice, I deem it proper to restore the issue to the file of the CIT(A) with a direction to decide the issue afresh after the quanum appeal is decided. Needless to say the CIT(A) shall give due opportunity of being heard the assessee as per law. I hold and direct accordingly. The 3 (JSD Steel (P) Ltd.) grounds raised

by the assessee are accordingly allowed for statistical purposes.

8. In the result, the appeal filed by the assessee is allowed for statistical purposes. (Order Pronounced in the Court at the time of hearing itself i.e. on 27.09.2017)

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