NARENDRA SHAH,MUMBAI vs. JCIT 25(1), MUMBAI

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ITA 5117/MUM/2014Status: DisposedITAT Mumbai31 May 2017AY 2009-103 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the quantum assessment appeal concerning the additions on which the penalty was based was restored to the Assessing Officer, the penalty order does not survive and is set aside.

What were the facts?

The Assessing Officer levied a penalty under Section 271(1)(c) based on additions made under Sections 68 and 69. The assessee appealed this penalty to the CIT(A), who upheld it.

What were the issues?

Whether a penalty under Section 271(1)(c) can survive when the underlying additions forming the basis of the penalty have been restored to the Assessing Officer for fresh adjudication.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 68,Section 69

AI-generated summary — verify with the full judgment below

Assessee by Shri Naveen Kumar Mishra : (AR) Revenue by : Shri V.K. Agarwal (DR) Date of hearing : 31.05.2017 Date of Pronouncement : 31.05.2017 Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee u/s. 253 of the Income-tax Act (the Act) is directed against the order of ld. Commissioner of Income Tax-35, Mumbai [the CIT], Mumbai dated 13.05.2014 for the Assessment Year 2009-10. The assessee has raised solitary ground of appeal that ld. CIT(A) erred in upholding the penalty levied by Assessing Officer (AO) u/s 271(1)(c) of the Act of Rs. 43,39,500/- .

2. At the outset of the hearing, the ld. Authorized Representative (AR) of the assessee submitted that the AO levied the penalty on account of additions of Rs.1,03,86,340/- u/s 68 of the Act, addition of Rs. 21,78,517/- u/s 69 and addition of Rs. 2,02,100/- on account of gift u/s 68 of the Act. It was further argued that the Shri Narendra Shah assessee filed appeal before the Tribunal in quantum assessment vide appeal ITA No. 6904/M/2012 which was decided vide order dated 06.08.2015. The Tribunal in its decision restored all the grounds of appeal to the file of AO. Thus, the penalty order does not survive. On the other hand, ld. Departmental Representative (DR) for the Revenue not disputed the factual position argued by ld. AR of the assessee.

3. We have considered the rival submissions of the parties and have gone through the orders of authorities below including the order of Tribunal in assessee’s own case for the same assessment order, wherein the grounds of appeal related to all the additions on the basis of which the penalty was levied, is restored to the file of AO. Considering the fact that all the grounds of appeal arising out of quantum addition have already been restored to the file of AO. Hence, the penalty order under section 271(1) ( c) dated 28.03.2014 does not survive and the same is set- aside. However, the AO will be at liberty to consider the initiation of penalty order in accordance with law, after giving effect to the order of Tribunal in ITA No. 6904/Mum/2012.

4. In the result, appeal of the assessee is allowed.

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