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Facts
The assessee was penalized under Section 271(1)(c) for Rs. 63.22 lakhs, stemming from an assessment order under Sections 144/147. The first appellate authority subsequently set aside the assessment order for fresh assessment.
Held
Since the underlying assessment order, which was the basis for the penalty, has been set aside for fresh assessment by the CIT(A), the penalty imposed under Section 271(1)(c) does not survive and is quashed.
Key Issues
The primary legal issue is whether a penalty imposed under Section 271(1)(c) can survive when the foundational assessment order has been set aside for fresh assessment.
Sections Cited
Section 271(1)(c), Section 144, Section 147, Section 250
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Income Tax Appellate Tribunal, DIVISION BENCH, ‘DB’ AMRITSAR
Before: SHRI MANOJ KUMAR AGGARWAL & SHRI UDAYAN DASGUPTA
O R D E R Per Udayan Dasgupta, J.M.: This appeal is filed by the assessee against the order of the ld. CIT (A) NFAC, Delhi dated 28.12.2023 passed u/s 250 of the Income Tax Act, 1961(henceforth the Act) which has emanated from the order of the AO, Ward-2, Phagwara, dated 26.09.2016 imposing a penalty u/s 271(1) (c) of the Act.
In course of hearing before the tribunal the Ld. AR of the assessee submitted that the only dispute in this case is that a penalty has been imposed by the AO u/s 271(1) (c) amounting to Rs. 63.22 lakhs, which has flown from the assessment order dated 18/03/2016, (incorrectly A.Y. 2009-10 2 mentioned as 26/02/2016 in para -2 of penalty order) passed u/s 144/147 of the Act determining total income at Rs.1.89 crores.
The said assessment order dated 18/03/2016 was challenged before the Ld first appellate authority , NFAC, Delhi and the Ld CIT(A) vide order dated 24/06/2025, passed u/s 250 of the Act , has set aside the matter back to the files of the AO for fresh assessment ( a copy of the said appeal order has been submitted as an enclosure to pb – 8 ) before the tribunal, consequently the penalty imposed u/s 271(1) (c) of the Act, and sustained in first appeal does not survive.
The Ld DR has no objection after verification of records.
As such the penalty order dated 26th September, 2016 imposed u/s 271(1) (c ) amounting to Rs. 63.22 lakhs does not survive and the same is quashed.