AMBEREEN ISLAM,KOLKATA vs. ITO, WARD-40, KOLKATA

The assessee in this appeal has agitated against the levy/confirmation of penalty u/s 271(1)(c) of the Act.

At the outset, the ld. counsel for the assessee has submitted that the Assessing Officer during the assessment proceedings noted that the assessee had raised a claim of duty draw back to the tune of Rs.3,67,376/-, whereas, the assessee had disclosed a sum of Rs.69,525/- under the head ‘duty draw back’. On being asked to explain in this respect, the assessee explained that the balance amount of Rs.2,97,851/- was not received during the year. That the amount of Assessment Year: 2016-17 Ambereen Islam duty draw back was disclosed on actual receipt basis. However, the Assessing Officer was of the view that since the assessee had been following mercantile system of accounting, therefore, the assessee was supposed to include all the amount that had accrued to the assessee on account of duty draw back. He, therefore, made the addition of the balance amount. He also initiated penalty proceedings u/s 271(1)(c) of the Act and held that the assessee had concealed the particulars of the income in respect of the remaining amount of duty draw back and imposed the impugned penalty. Further, the Assessing Officer also levied minor penalty on account of claim of inflated liability to the tune of Rs.1005/-. The ld. counsel has further submitted that the assessee preferred appeal before the ld. CIT(A) relating to quantum additions as well as assailing the impugned penalty levied u/s 271(1)(c) of the Act. That the ld. CIT(A), however, vide impugned order confirmed the penalty, whereas, the appeal against the quantum additions is still pending before the ld. CIT(A). The ld. counsel has further submitted that the assessee has a fair case on merits as the assessee had duly disclosed the remaining amount of duty draw back in subsequent years as and when received. The ld. Counsel has submitted that if the quantum additions stood deleted by the ld. CIT(A), then the impugned penalty would not have any legs to stand. The ld. counsel, therefore, has submitted that the matter relating to the levy of impugned penalty be restored to the file of the ld. CIT(A) so that the same may be decided along with the quantum appeal of the assessee. The ld. counsel in this respect has mentioned that the quantum appeal in this respect has been numbered as Appeal No.CIT(A), Kolkata-12/10068/2019-20.

After hearing the rival submissions of both the parties, we are of the view that it will be in the interests of justice, if the impugned matter regarding the levy of penalty is restored to the file of the ld. CIT(A) with