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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI MANOJ KUMAR AGGARWAL
Captioned appeal at the instance of the assessee is directed against the order dated 3.12.2014, passed by the learned Commissioner (Appeals)–28, Mumbai, confirming imposition of penalty u/s 271(1)(c) for the assessment year 2006-07.
Brief facts are, assessment in the case of assessee was completed u/s 143(3) of the Act on 27.10.2008, determining total income of ` 1,45,330, as against the declared loss of ` 6,10,970. The 2 Shri Dilip N. Yagnik variation in the total income determined by the A.O. was as a result of additions made the A.O. changing the head of income relating to share transaction from the head income from business and profession as claimed by the assessee to capital gain, as a result, the business loss claimed by assessee was disallowed. Being aggrieved, ass preferred appeal before the CIT(A) and being unsuccessful there, went in further appeal before the Tribunal. During the pendency of assessee’s appeal, A.O. initiated proceedings for imposition of penalty u/s 271(1)(c) by issuing a show cause notice and ultimately passed an order on 29.3.2013, imposing penalty of ` 1,92,960 u/s 271(1)(c). Being aggrieved of the penalty order, assessee preferred appeal before the CIT(A).
The CIT(A), however, confirmed the imposition of penalty. Aggrieved, the assessee is in further appeal before the Tribunal.
We have heard the rival contentions and perused the material on record. At the outset, the A.R. submitted before us that the quantum appeal filed by the assessee arising out of the assessment proceedings in the mean while has been heard and disposed off by the Tribunal by restoring the matter to the file of the A.O. for fresh adjudication. He, therefore, submitted, there being no assessment as on date the penalty order passed cannot also survive. D.R. has agreed to the aforesaid factual position. On a perusal of the order dated 24.6.2016,
3 Shri Dilip N. Yagnik passed in ITA no.99/Mum./2011, we have noted that while deciding assessee’s quantum appeal, the Tribunal has restored all the issues pertaining to the additions made by the A.O. back to his file for fresh adjudication. Thus, the additions / disallowance on the basis of which the penalty u/s 271(1)(c) was imposed being no longer in existence, the order passed imposing penalty 271(1)(c) cannot survive. Accordingly, we delete the penalty imposed. However, it is open to the A.O. to initiate penalty proceedings afresh, if warranted, after completion of the assessment in pursuance to the directions of the Tribunal.
In the result, assessee’s appeal stands allowed. Order pronounced in the open Court on 27.10.2016