BALAJI SINGH TEEKA,MUMBAI vs. ITO (IT) 4(1)(1), MUMBAI

At the outset, the learned counsel for the assessee, vide letter dated 22.02.2018, requested to withdraw appeals filed by the assessee in for A.Y. 2004-05 and ITA No. 5456/Mum/2016 for A.Y. 2006-07, stating that after the order of the Hon’ble Tribunal in the quantum appeal, the addition has been reduced to ‘nil’ and, hence, there cannot be any penalty for these two years.

The learned counsel for the assessee further submitted that the appeal by the assessee against the quantum additions has been disposed of by the Tribunal for A.Ys 2003-04 to 2009-10 in to 5483/Mum/2013 by order dated 31.07.2015, deleting the addition made by the Assessing Officer in respect of the Annual Letting Value of the commercial properties let out by the assessee. The learned counsel for the assessee submitted before us that the appeals preferred before the learned CIT(A) against imposition of penalty have been taken up for hearing and the learned CIT(A) restored the penalty proceedings to the file of the Assessing Officer to initiate the proceedings – either to impose or drop the penalty, after giving effect to the order of the Tribunal. The learned counsel for the assessee submitted that the grievance of the assessee in the appeals filed against the order of the learned CIT(A) restoring the penalty proceedings to the Assessing Officer is the assessee did not contest the addition made by the Assessing Officer in respect of residential properties i.e. in computing the Annual Letting Value in respect of residential properties but had contested only the addition made with respect to the commercial properties and, therefore, the CIT(A) should not have restored the penalty proceedings to the Assessing Officer instead he himself should have decided. The learned counsel further submitted that the Tribunal in its order has dealt with the addition in respect of commercial properties and, therefore, it is submitted before us that the CIT(A) should not have restored the penalty proceedings to the Assessing Officer in respect of the addition made on residential properties. It is the contention of the learned counsel that the CIT(A) should have decided the imposition of penalty on residential properties instead of remitting the same to the Assessing Officer.

The learned DR before us submitted that since the learned CIT(A) has restored the penalty proceedings to the Assessing Officer to initiate the proceedings - either to impose or drop the penalty, based on the order of the Tribunal, there should not be any grievance to the assessee.

We have heard the rival submissions and have perused the orders of the authorities below. We find that the Assessing Officer imposed penalty on the addition made on account of income from house property in respect of the assets let out by the assessee, both commercial as well as residential. The assessee contested the addition i.e. estimating the Annual Letting Value in respect of commercial properties and the Tribunal by its common order for the assessment years 2003-04 to 2009-10, dated 31.07.2015, deleted the additions. When the penalty appeals came up before the CIT(A), the CIT(A) taking note of the fact that the Tribunal deleted the additions in respect of commercial properties restored the penalty proceedings for initiation either to impose/drop the proceedings of penalty after giving effect to the order of the Tribunal. However, it is the contention of the learned counsel that the CIT(A) should have decided the imposition of penalty on the addition made in respect of residential properties, which were not contested in the quantum appeals. On a perusal of the assessment order as well as penalty order, we find that the penalty was initiated on the addition made towards income from house property, which consisted of both commercial and residential properties. On a perusal of the CIT(A)’s order, we do not find any infirmity in directing the Assessing Officer to re-initiate the proceedings to impose/drop the proceedings of penalty based on the order of the Tribunal as the Tribunal has already deleted the addition partially. The apprehension of the assessee probably was that the CIT(A) directed to initiate the penalty proceedings again. The finding /direction of the CIT(A) is very clear in as much as the direction is only to re-initiate the proceedings either to impose or drop the proceedings of penalty. The Assessing Officer shall take a decision either to impose or drop the penalty proceedings based on the observations made by the Tribunal in the quantum proceedings. In the circumstances, we do not seen any valid reason to interfere with the directions given by the learned CIT(A).

In the result, the appeals filed by the assessee for assessment years 2003-04, 2005-06, 2008-09 and 2009-10 are dismissed and the appeals for the assessment years 2004-05 and 2006-07 are dismissed as withdrawn.