V.S.MADASAMY,CHENNAI vs. ITO, VILLUPURAM

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ITA 1428/CHNY/2015Status: DisposedITAT Chennai09 June 2016AY 2009-104 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 since the quantum addition was set aside and remitted, the penalty levied at that stage was not sustainable. Therefore, the penalty was deleted.

What were the facts?

The Assessing Officer levied penalty under Section 271(1)(c) for excess expenditure in purchasing paddy. The Tribunal had previously set aside the quantum addition and remitted the issue back to the Assessing Officer for reconsideration.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying addition has been set aside and remitted for reconsideration.

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, ‘D’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY

For Respondent: Shri G. Johnson, JCIT
Hearing: 30.05.2016Pronounced: 09.06.2016

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Puducherry, dated 30.01.2015 for the assessment year 2009-10, confirming the penalty levied by the Assessing Officer under Section 271(1)(c) of the Income-tax Act, 1961 (in short 'the Act').

2.

Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the Assessing Officer levied penalty under Section 271(1)(c) of the Act in respect of the excess expenditure incurred by the assessee in purchase of paddy. Ld.counsel submitted that when the issue of quantum addition made by the Assessing Officer came before this Tribunal in this Tribunal by an order dated 30.06.2015 remitted back the issue to the file of the Assessing Officer for reconsideration. Since the quantum addition made by the Assessing Officer was set aside and the matter was remitted back to the file of the Assessing Officer, according to the Ld. counsel, the penalty levied by the Assessing Officer at this stage may not survive.

3.

On the contrary, Shri G. Johnson, the Ld. Departmental Representative, submitted that this Tribunal by an order dated 30.06.2015, remitted the matter back to the file of Assessing Officer for reconsideration in respect of the excess expenditure incurred by the assessee to the extent of `12,41,714/- in purchase of paddy.

Since the quantum addition was set aside and the matter was remitted back to the file of the Assessing Officer for reconsideration, the penalty proceeding may also be remitted back to the file of the Assessing Officer for reconsideration.

4.

We have considered the submissions on either side and perused the relevant material available on record. Admittedly, the Assessing Officer levied penalty under Section 271(1)(c) of the Act in respect of the so-called excess expenditure said to be incurred by the assessee in purchase of paddy to the extent of `12,41,714/-.

This Tribunal set aside the addition made by the Assessing Officer and remanded the issue back to his file for reconsideration, by order dated 30.06.2015. Therefore, as on today, the addition made by the Assessing Officer does not exist. Hence, the penalty levied by the Assessing Officer is not sustainable. Accordingly, the orders of the authorities below are set aside and penalty levied by the Assessing Officer under Section 271(1)(c) of the Act is deleted. It is open to the Assessing Officer to initiate the penalty proceeding under Section 271(1)(c) of the Act after completion of assessment as per the direction of this Tribunal in the order dated 30.06.2015.

5.

With the above observation, the appeal filed by the assessee is allowed.

Order pronounced on 9th June, 2016 at Chennai.

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