SH.ASHOK KUMAR,MOGA vs. INCOME TAX OFFICER, MOGA

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ITA 25/ASR/2019Status: DisposedITAT Amritsar03 August 2023AY 2007-083 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 under Section 271(1)(c) is not maintainable when the quantum addition is set aside for de novo assessment. The AO is at liberty to initiate penalty proceedings afresh after the de novo assessment.

What were the facts?

The assessee filed an appeal against the penalty levied under Section 271(1)(c). The quantum addition, which formed the basis for the penalty, had been remitted back to the Assessing Officer (AO) for de novo assessment by a previous Tribunal order.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the quantum addition is remitted for de novo assessment. The AO's satisfaction for levying penalty was also questioned.

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, AMRITSAR BENCH, AMRITSAR

Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE

Hearing: 01.08.2023Pronounced: 03.08.2023

This appeal has been filed by the by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-3, Ludhiana dated 24.10.2018 in respect of Assessment Year: 2007-08.

Ashok Kumar v. ITO 2. The counsel has raised the amended grounds of appeal vide application dated 30.06.2023 which reads as under:

“1. That Ld. A.O has not recorded any satisfaction in quantum order indicating on which limb he is relying to levy penalty u/s 271(l)(c) and is bad-in-law.

2.

That Ld. A.O has not recorded/ indicated the limb on which he has levied penalty u/s 271(l)(c) in his penalty order and is bad-in-law.

3. That the quantum order of the appellant has been remitted back by Hon'ble ITAT dtd. 12-05-23 to A.O for fresh adjudication on the basis of evidence/ explanations submitted by appellant before ITAT, Hence no penalty stands when the matter is denovo to A.O.”

3.

At the outset, the ld. counsel for the appellant has submitted that the appeal of the assessee in quantum addition has been remitted to the AO by the Tribunal to pass denovo assessment order in vide Tribunal order dated 12.05.2023 with the direction to adjudicate afresh after considering the evidence and an explanation filed by the assessee on record. Accordingly, he requested that the penalty may also be remanded back to the AO, as no penalty stands when the matter is remanded back to the AO to pass denovo assessment.

4.

Per contra, the ld. DR failed to rebut the contention of the ld. counsel.

Ashok Kumar v. ITO 5. Heard both the sides, perusal of the record and the impugned order.

We find that the quantum appeal of the assessee has been restored to the AO to pass denovo assessment order after examining the evidence and explanations filed on record and granting sufficient opportunity of being heard. In our view, the penalty levied u/s 271(1)(c) shall not be maintainable when the quantum addition is set aside by Tribunal to the file of the Assessing Officer. We make it clear that the AO shall be at liberty to initiate the penalty proceedings afresh on the basis of its finding in the denovo assessment proceedings. Accordingly, penalty levied u/s 271(1)(c) is set aside.

6.

In the backdrop of the aforesaid discussion, the appeal of the assessee is disposed of in the terms indicated as above.

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