ROYAL RICH DEVELOPERS P.LTD,MUMBAI vs. DCIT (OSD) -II CR 7, MUMBAI

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ITA 841/MUM/2015Status: DisposedITAT Mumbai23 June 2016AY 2009-103 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty orders would not survive as the basis for their imposition (the assessment orders) had been set aside. The CIT(A)'s orders confirming the penalties were therefore set aside.

What were the facts?

The assessee appealed against penalty orders levied under Section 271(1)(c) for AY 2009-10 and 2010-11, which were confirmed by the CIT(A). The assessee's primary assessment orders for these years had been set aside by the Tribunal for de novo assessment.

What were the issues?

Whether penalty under Section 271(1)(c) can survive when the assessment order on which it is based has been set aside for de novo assessment.

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, “SMC” BENCH, MUMBAI

Before: SHRI B.R. BASKARAN (AM)

For Appellant: Shri Kirit Sheth
For Respondent: Shri Mohammed Rizwan
Hearing: 23.06.2016Pronounced: 23.06.2016

Both the appeals filed by the assessee are directed against the orders passed by Ld. CIT(A) – 52, Mumbai and they relate to Assessment Years 2009-10 & 2010-11.

2.

The Ld. Counsel appearing for the assessee submitted that the Assessing Officer had estimated the income of the assessee and levied penalty u/s 271(1)(c) of the Income Tax Act, 1961 in both the years. The Ld. CIT(A) has confirmed the penalty in both the years and hence

2 M/s. Royal Rich Developers Pvt. Ltd. & 842/Mum/2015 assessee has filed these appeals before us. The Ld. Counsel submitted that the assessee had challenged the assessment orders of both the years before the Tribunal and the Tribunal, vide its order dt. 27.5.2016 passed in & ITA No. 4184/Mum/2013, has set-aside the orders passed by the Ld. CIT(A) and restored the matter to the file of the Assessing Officer for doing de novo assessment. Accordingly, the Ld. Counsel submitted that the impugned penalty orders will not survive in view of the orders passed by the Tribunal.

3.

The Ld. DR did not contradict the factual aspects presented by the Ld. Counsel for the assessee.

4.

Since the assessment orders, on the basis of which the impugned penalty orders have been passed, have been set-aside by the Tribunal and the matters have been restored back to the file of the Assessing Officer for carrying out de novo assessment, I find merit in the contention of the assessee. Accordingly, I set-aside the orders passed by the Ld. CIT(A) in both the years under consideration. However, I may state that the Assessing Officer is at liberty to initiate penalty proceedings afresh in the set-aside proceedings, if so advised.

5.

In the result, both the appeals filed by the assessee are treated as allowed.

Order pronounced in the open court on 23rd June, 2016.

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