SMT. KOKILABEN R.RAMANI,AHMEDABAD vs. THE INCOME TAX OFFICER,WARD-11(3), AHMEDABAD

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ITA 2927/AHD/2014Status: DisposedITAT Ahmedabad29 November 2017AY 2009-103 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the quantification of penalty under Section 271(1)(c) is dependent on the additions made to the income. Since the determination of taxable income was still pending before the Assessing Officer, the penalty could not be imposed at that stage.

What were the facts?

The assessee appealed against a penalty imposed under Section 271(1)(c) of the Income Tax Act. The additions made in the quantum assessment, which formed the basis for the penalty, were set aside and restored to the Assessing Officer by a coordinate bench of the Tribunal.

What were the issues?

Whether penalty under Section 271(1)(c) can be imposed when the additions forming the basis for the penalty are set aside and restored to the Assessing Officer for fresh adjudication.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “ A ” BENCH, AHMEDABAD

Before: SHRI S.S. GODARA & SHRI PRADIP KUMAR KEDIA

For Respondent: Shri Aditya Shukla, DR

PER PRADIP KUMAR KEDIA - AM: The captioned appeal filed at the instance of the assessee is against the order of the Commissioner of Income Tax(Appeals)-XVI, Ahmedabad [CIT(A) in short] dated 02/09/2014 whereby action of the CIT(A) in confirming the penalty of Rs.11,09,250/- imposed by the Assessing Officer (AO) under s.271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") has been assailed by the Assessee. Asst.Year – 2009-10

2.

As noted, the solitary grievance in the present appeal is against the imposition of penalty levied under s.271(1)(c) of the Act.

3.

With the assistance of the Ld.AR for the assessee, we find that the additions/disallowances made in the quantum assessment giving rise to the imposition of penalty in appeal has been set aside and restored back to the file of the Assessing Officer (AO) by the Coordinate Bench of Tribunal in quantum in ITA No.1033/Ahd/2013 vide order dated 06/06/2014. On the strength of the Tribunal’s order, it was contended on behalf of the assessee that since the addition/disallowance has been set aside and restored to the file of AO for adjudication, the basis for imposition of penalty does not survive at present.

4.

The Ld.DR relied upon the order of the CIT(A).

5.

On due consideration of the facts and circumstances of the case, we find that sub-clause (iii) of section 271(1)(c) provides mechanism for quantification of penalty. It contemplates that the assessee would be directed to pay a sum in addition to taxes, if any, payable him, which shall not be less than but which shall not exceed three times the amount of tax sought to be evaded by reason of concealment of income and furnishing of inaccurate particulars of income. In other words, the quantification of the penalty is dependent upon the additions made to the income of the assessee. Upto and until the issue regarding determination Asst.Year – 2009-10 of the taxable income is finalized, penalty under section 271(1)(c) of the Act cannot be imposed upon the assessee. The determination of taxable income of the assessee is presently subjudiced before the AO owing to the order of the ITAT in quantum proceedings. After adjudication the issue of quantum on merit, it will be in the discretion of the AO to consider initiation of penalty proceedings on this issue against the assessee afresh in accordance with law. In view of the above, we set aside the penalty order passed by the AO under s.271(1)(c) of the Act.

6.

In the result, appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 29/ 11 /2017 (एस.एस.गोदारा) ("द"प कुमार के"डया) "या"यक सद"य लेखा सद"य Ahmedabad; 29/ 11 /2017 ट".सी.नायर, व."न.स./T.C. NAIR, Sr. PS आदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant

2.

""यथ" / The Respondent. 3. संबं"धत आयकर आयु"त / Concerned CIT 4. आयकर आयु"त(अपील) / The CIT(A)-XVI, Ahmedabad "वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड" फाईल / Guard file. आदेशानुसार/ BY ORDER, //// उप/सहायक पंजीकार (Dy./Asstt.

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