THE DCIT, CIRCLE-1, AHMEDABAD vs. M/S. AMOL DICALITE LTD., AHMEDABAD

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ITA 1125/AHD/2015Status: DisposedITAT Ahmedabad25 September 2017AY 2009-102 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) correctly cancelled the penalty as the original disallowance no longer stood. The CIT(A) had also granted liberty to the AO to initiate fresh penalty proceedings, making the Revenue's appeal baseless.

What were the facts?

The CIT(A) cancelled a penalty levied under Section 271(1)(c) because the related disallowance had been remitted back to the AO for fresh adjudication. The Revenue appealed this cancellation.

What were the issues?

Whether penalty can be sustained when the underlying disallowance has been remitted for fresh adjudication. Whether the Revenue has a valid grievance when the CIT(A) allows liberty to initiate fresh penalty proceedings.

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, AHMEDABAD “D” BENCH, AHMEDABAD

ITA No. 1125 & CO No. 108/Ahd/2015 DCIT vs. Amol Dicilate Ltd Assessment year: 2009-10 Page 1 of 2 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH, AHMEDABAD [Coram: Pramod Kumar AM and S S Godara JM] ITA No.1125Ahd/2015 & CO No.108/Ahd/2015 Assessment Year: 2009-10 The DCIT .......…………...........Appellant Circle 1(1)(1), Ahmedabad Vs. M/s. Amol Dicalite Ltd ........................Respondent & 301, “Akshay”, Shrimali Cross-Objector Society, Navrangpura, Ahmedabad - 380009 [PAN : AABCA 2807 K ] Appearances by: VK Singh for the appellant None for the respondent Date of concluding the hearing : 25.09.2017 Date of pronouncing the order : 25.09.2017 O R D E R Per Pramod Kumar, AM: 1. This appeal by the Revenue and the cross-objection thereof by the assessee are directed against the order dated 26.02.2015 passed by the learned CIT(A)-6, Ahmedabad in the matter of penalty under Section 271(1)(c) of the Act for the Assessment Year 2009-10. 2. The cross-objection raised by the assessee is merely in support of the order of the learned CIT(A) and is thus dismissed as infructuous. 3. The grievance raised by the Assessing Officer is as follows:- “The ld. CIT(A) has erred in law and on facts in cancelling the penalty order by holding that the disallowance made by the AO no longer survives as the issue was remitted back to the AO for deciding afresh and the penalty of Rs.33,63,900/- levied with reference to the said disallowance cannot stand on its own.” 3. There is no dispute so far as the quantum disallowance of Rs.96,76,737/- is concerned. The matter has been remitted back to the file of the Assessing Officer for adjudication de novo and it was in this backdrop the CIT(A) has cancelled the related penalty, which is in impugned appeal before us, by observing as follows:-

ITA No. 1125 & CO No. 108/Ahd/2015 DCIT vs. Amol Dicilate Ltd Assessment year: 2009-10 Page 2 of 2

“3.4 As seen from the Tribunal’s order [reproduced at para 3.2 above], the issue was remitted back to the AO for deciding afresh. Therefore, the disallowance made by the AO no longer survives. Penalty [levied w.r.t. the said disallowance] cannot stand on its own. Impugned penalty order is cancelled. However, AO is at liberty to initiate penalty proceedings afresh while passing the assessment order u/s 143(3) r.w.s. 254. This ground of appeal is allowed for statistical purposes.”

4.

The Assessing Officer, however, aggrieved by the relief so granted, is in appeal before us.

5.

We have heard the learned Departmental Representative, perused the material on record and duly considered facts of the case in the light of applicable legal position.

6.

We have noted that, while cancelling the impugned penalty, CIT(A) has given liberty to the Assessing Officer to initiate penal proceedings afresh, if deciding the matter afresh. In this view of the matter, the Assessing Officer cannot have any grievance against the relief granted by the CIT(A) as to whether the issues of Assessment Year 2008-09 and 2009-10 are similar or not. All these things are open before the Assessing Officer and the Assessing Officer has to take a fresh call on correctness of the disallowance. The grievance of the Assessing Officer is thus devoid of any basis and we reject the same.

7.

The appeal of the Assessing Officer is, thus, dismissed. 8. To sum up, the appeal and the cross-objection, both are dismissed. Pronounced in the open court today on the 25th of September, 2017.

Sd/- Sd/- S S Godara Pramod Kumar (Judicial Member) (Accountant Member) Ahmedabad, the 25th day of September, 2017 **bt Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad

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