THE STATE TRADING CORPORATION OF INDIA LTD.,,NEW DELHI vs. DCIT, NEW DELHI

This appeal filed by the assessee is directed against the order dated 31.03.2016 of the CIT(A)- 33, New Delhi relating to assessment year 2009-10.

Although a number of grounds have been raised by the assessee, they all relate to the order of the ld. CIT(A) in confirming the penalty levied u/s 271(1)(c) of the I.T. Act, 1961 by the Assessing Officer on account of disallowance of provision for leave encashment. 3. The ld. counsel for the assessee at the outset filed a copy of the order of the Tribunal and submitted that the issue has been restored to the file of the Assessing Officer for fresh adjudication as per para 7 of the order. Therefore, the very basis of levy of penalty does not survive and the penalty so levied should be deleted.

The ld. DR while conceding the above argument of the ld. counsel for the assessee submitted that a direction may be given to the Assessing Officer to initiate the penalty proceedings after the order is passed in the light of the decision of the Tribunal.

After hearing both the sides, we find the penalty has been sustained by the ld. CIT(A) on the addition made on account of disallowance of provision for leave encashment. From the order of the Tribunal in assessee’s own case in order dated 21.01.2016, we find the Tribunal at para 7 of the order has restored the issue to the file of the Assessing Officer for fresh adjudication of the issue. Therefore, penalty at present does not survive and the same is liable to be deleted. However, the Assessing Officer is at liberty to initiate penalty proceedings after completion of the assessment on the basis of the direction of the Tribunal. In view of the above, the grounds raised