LALITH SHARMA,CHENNAI vs. ITO, CHENNAI

This appeal by the assessee is directed against the order passed by the learned Commissioner of Income Tax(Appeals)-5,

The assessee has raised several grounds in his appeal however the crux of the issue is the Ld.CIT(A) has erred in confirming

The brief facts of the case are that the assessee is an individual earning commission income, filed his return of income for the assessment year 2011-12 on 31.10.2011 admitting total income of Rs.11,80,010/-. Initially the return was processed U/s.143(1) of the Act and subsequently the case was selected for scrutiny and notice U/s.143(2) of the Act was issued. Finally assessment order was passed U/s.143(3) of the Act on 24.01.2014 wherein the Ld.AO had made several additions. Thereafter the Ld.AO invoking the provisions of Section 271(1)(c) of the Act and levied minimum penalty @ 100% of tax amounting to Rs.7,44,558/-.

At the outset the Ld.AR submitted before us that the Ld.CIT(A) had confirmed the penalty levied by the Ld.AO without adjudicating the quantum appeal pending before him on merits. He therefore pleaded that the matter may be remitted back to the file of Ld.AO who may pass appropriate order after adjudicating the quantum appeal of the assessee which is pending before him. The Ld.DR could not controvert to the submission of the Ld.AR.

We have heard the rival submissions and carefully perused the materials on record. From the facts of the case we find merit in the submissions of the Ld.AR. It is not appropriate on the part of the Ld.CIT(A) to decide the penalty appeal before deciding the quantum appeal on merits. The fact that the quantum appeal is yet to be adjudicated by the Ld.CIT(A) is not in dispute. Therefore in the interest of justice, we hereby remit back the matter to the file of Ld.CIT(A) with directions to decide the penalty appeal in accordance with law and merits after adjudicating the quantum appeal pending before him.

In the result, the appeal of the assessee is allowed for statistical purpose as indicated herein above.