LALITH SHARMA,CHENNAI vs. ITO, CHENNAI

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ITA 536/CHNY/2017Status: DisposedITAT Chennai26 July 2018AY 2011-123 pages
AI SummaryRemanded

What did the Tribunal hold?

The tribunal held that it was inappropriate for the CIT(A) to decide the penalty appeal before adjudicating the quantum appeal on merits. The matter was remitted back to the CIT(A) for a decision after adjudicating the quantum appeal.

What were the facts?

The assessee filed a return of income, which was processed and later selected for scrutiny. The Assessing Officer (AO) made additions and levied a penalty under Section 271(1)(c). The CIT(A) confirmed the penalty without adjudicating the quantum appeal.

What were the issues?

Whether the CIT(A) erred in confirming the penalty before adjudicating the quantum appeal on merits. The procedural correctness of adjudicating penalty before quantum appeal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(1),Section 143(2),Section 143(3),Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI

Before: SHRI A.MOHAN ALANKAMONY & SHRI DUVVURU RL REDDY

Pronounced: 26.07.2018

आदेश / O R D E R

Per A. Mohan Alankamony, AM:-

1.

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

Chennai, dated 14.12.2016 in for the assessment year 2011-12 passed U/s. 250(6) r.w.s. 271(1)(c) of the Act.

2.

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

Ld.AO by invoking the provisions of Section 271(1)(c) of the Act before adjudicating the quantum appeal on merits.

3.

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/-.

4.

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.

5.

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.

6.

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

Order pronounced on the 26th July, 2018 at Chennai.

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