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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’: NEW DELHI
Before: SHRI S.V. MEHROTRA, & SHRI CHANDRA MOHAN GARG
PER CHANDRA MOHAN GARG, JUDICIAL MEMBER
This appeal filed by the assessee is directed against the order of the CIT(A)-X, Delhi, dated 19/02/2014 for A.Y 2006-07 passed in first appeal No. 121/2013-14.
We have heard the arguments of both the sides and have carefully perused the relevant material placed on record on the Tribunal inter alia assessment order and order of the CIT(A). The ld. AR placing a copy of the order of the ITAT ‘C’ Bench dated 31.7.2015 passed in for A.Y 2006-07 and submitted that 14A of the Income-tax Act, 1961 [hereinafter referred to as 'the Act', disallowance being loss on account of forfeiture of advance paid for purchases of property at Rs. 75 lakhs and issue of addition on notional interest as advance to Shri Mahesh Kumar Sharma have been restored to the file of the AO for afresh adjudication. He, therefore, submitted that the penalty on all the three counts/issued levied by the AO cannot be held as sustainable.
The ld. counsel of the Revenue supported the orders of the authorities below. However, the ld. DR fairly accepted that in the quantum appeal the Tribunal has restored all the three issues to the file of the AO and penalty order cannot be held as sustainable. At the same time, he also contended that the AO has valid jurisdiction to initiate and impose penalty as per above appeal effect order passed by the AO. The ld. DR further submitted that he powers of the AO will not be curtailed if the additions are made and penalty is imposable on the issues as per outcome of the appeal effect re assessment order passed in pursuance to the Tribunal order.
On careful consideration of the above, we are of the view that on careful perusal of the Tribunal order dated 31.7.2015 [supra] for A.Y 2006-07 it is amply clear that all the three issues, on which penalty has been levied u/s 271(1)(c) of the Act have AO for afresh adjudication, This penalty order as well as impugned order of the CIT(A) do not survive and we demolish and dismiss the same. Before we part with the order, we make it clear that in the event of additions and disallowances in the appeal effect reassessment order if required the AO will not be prevented from initiating penalty proceedings as per outcome of the said order to be passed u/s 143(3)/154 of the Act.
In the result, the appeal of the assessee stands allowed as indicated above.
The order is pronounced in the open court on 03.08.2016.