AISHA AFATAB PATEL,MUMBAI vs. ASST CIT CEN CIR 13, MUMBAI

The present appeal has been preferred by the assessee against the order dated 18.02.2014 of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as CIT(A)] relevant to assessment year 2003-04.

The assessee has agitated the action of the Ld. CIT(A) in confirming the penalty levied by the Assessing Officer (hereinafter referred to as the AO) under section 271(1)(c) of the Income Tax Act. At the outset, the Ld. A.R. has stated that in relation to quantum additions, the matter has been set aside to the file of the AO by the Tribunal vide order dated 08.02.2015 passed in & 793/M/2010 for decision afresh. Since the very basis upon which the penalty was levied has ceased to exist, therefore, the consequential penalty is not sustainable in the eyes of law and the same is accordingly ordered to be deleted.

However, before parting with the order it is clarified that if the AO will find during the fresh assessment proceedings that the case of the assessee is also fit for levy of penalty in terms of the fresh assessment order, he will be at liberty to initiate fresh penalty proceedings accordingly.

In the result, the appeal of the assessee is hereby allowed.