Substantial modification of Quantum order by CIT(A) renders penalty proceedings non-existent

It was held that Once the assessment order of the AO in the quantum proceedings was altered by the CIT (A) in a significant way, the very basis of initiation of the penalty proceedings was rendered non-existent. The AO could not have thereafter continued the penalty proceedings on the basis of the same notice. By the impugned order the ITAT affirmed the order of the Commissioner of Income Tax (Appeals) [CIT(A)] deleting the penalty imposed by the Assessing Officer (‘AO’) under Section 271(1)(c) of the Income Tax Act, 1961 (‘Act’). The ITAT has in the impugned order noted that in the a...