Anjanadri Fuel Station Vs ITO (Karnataka High Court)
Karnataka High Court held that till disposal of the appeals filed by the Assessee, it is necessary to keep the penalty orders and notices in abeyance. Thus, demand notice kept in abeyance.
Facts- Petitioner, being aggrieved by the Assessment Order dated 30.03.2023, has preferred an appeal on 12.05.2023. It is the grievance of the petitioner that despite pendency of the appeal before the Appellate Authority, the respondents have proceeded to issue penalty notice and show-cause notice followed by the impugned penalty orders and demand notice, which are assailed in the present petition.
Conclusion- This Court in the case of Mr. B.S. Uday Shetty Vs. The Assistant Commissioner of Income Tax has held that since the appeals were pending, it would be necessary to keep the penalty orders and demand notices in abeyance till disposal of the appeals.
A perusal of Section 275 of the I.T. Act will indicate that there is clear embargo/bar on proceeding to pass penalty order if an appeal is pending on the Assessment Order. As rightly contended by the learned counsel for the petitioner in S. Uday Shetty’s case, under identical circumstances, where the petitioner-Assessee did not file an appeal against the Original Assessment Order, this Court came to the conclusion that till disposal of the appeals filed by the Assessee, it is necessary to keep the penalty orders and notices in abeyance.
