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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
This appeal by assessee is directed against the order dated 17.01.2024 of the Commissioner of Income Tax (Appeal), (National Faceless Appeal Centre (NFAC) Delhi arising from penalty order passed under section 271(1)(c) of the Act for A.Y.2011-12. The assessee has raised following grounds of appeal:
“1. On the facts and circumstances of the case and applicable law, NA Ld. CIT(A) erred in sustaining the penalty order under ITANo.214/Ind/2024 Mustafa Ali section 271(1)(c) which is contrary to the material on records and provisions of the Act, unjust and bad in law.
On the facts and circumstances of the case and applicable law Ld. CIT(A) erred in sustaining the penalty imposed by Ld. Assessing Officer of Rs. 34,91,700 u/s 271(1)(c) more particularly when assessee is a Non Resident Indian and has no income which is chargeable to tax in India.
3. On the facts and circumstances of the case and applicable law, NA both Ld. CIT(A) and Ld. Assessing Officer erred in not giving reasonable opportunity of being heard in the interest of principles of natural justice.
The appellant craves leave to add, amend, alter or otherwise raise any other ground of appeal
.”
2. At the time of hearing Ld. AR of the assessee has submitted that at the penalty u/s 271(1)(c) of the Act has been levied by the AO against the addition made on account of cash deposit in the bank account of the assesse while framing the assessment u/s 144 r.w. section 144 of the Act. She has pointed out that in the quantum appeal this tribunal in ITANo.536/Ind/2023 vide order dated 3rd April 2024 has set aside the matter to the record of the AO for fresh adjudication after giving opportunity of hearing to the assessee. Thus, Ld. AR has submitted that when the addition itself has been set aside then penalty levied by the AO u/s 271(1)(c) is liable to be deleted.
On the other hand, Ld. DR has not disputed the fact that in the quantum appeal the Tribunal has remanded the matter to the record of the AO.
ITANo.214/Ind/2024 Mustafa Ali 4. Having considered rival submissions as well as relevant material on record at the outset, we note that this tribunal in the quantum appeal in ITANo.536 & 537/Ind/2023 for A.Y.2011-12 & 2012-13 respectively remanded the matter to the record of the AO in para 3 as under:
3. Ld. AR then submitted that the AO has passed assessment- orders u/s 147/144 of the Act because of non-compliances of notices sent by AO. But the assessee was a non-resident staying in UAE and not aware of the notices sent by AO. Therefore, the assessee could not make compliances before AO. Ld. AR went on submitting that the assessee is not having any income taxable in India but the AO has assessed hefty incomes while framing assessments u/s 147/144. Ld. AR asserted that, if an opportunity is given, the assessee is ready to represent his cases before AO to enable the AO to make proper adjudication in accordance with the provisions of law. Therefore, the matter may be remanded to the file of AO for a proper adjudication on merit. Ld. DR would not have any objection to the prayer of Ld. AR but makes a request to direct the assessee to represent his cases before AO and do not seek unnecessary adjournments. Having regard to these submissions and also to the principle of natural justice and fair play, we deem it fit to remand these matters to the file of AO for a proper adjudication on merit after giving opportunity of hearing to the assessee, uninfluenced by his earlier orders. The assessee is also directed to stay vigilant and extend full co-operation to AO failing which the AO shall be entitled to pass ex-parte orders in accordance with law. We order accordingly.
Thus, the addition made by the AO is no more in-existence as the matter was already remanded to the record of the AO for fresh adjudication therefore, the penalty levied by the AO u/s 271(1)(c) would not survive. Accordingly we delete the penalty levied u/s 271(1)(c) with the liberty that the AO may initiate the penalty Page 3 of 4
ITANo.214/Ind/2024 Mustafa Ali proceeding u/s 271(1)(c) as per the outcome of the quantum remand proceedings.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 30 .07.2024.