DCIT Vs Uthangarai Sri Vidhya Mandir Educational & Social Welfare Trust (ITAT Chennai)
CIT(A) Didn’t ‘Set Aside’—He Just Told AO to Do the Maths! ITAT Slams Revenue’s Hyper-Technical Appeal- ITAT Chennai dismisses Revenue’s appeals – CIT(A)’s direction to recompute 271AAB penalty is NOT “setting aside”, but a valid corrective instruction
Revenue filed three appeals for AYs 2015-16 to 2017-18 against the common order of the CIT(A), who had directed the AO to levy penalty u/s 271AAB only after due verification of facts & after considering the ITAT’s earlier order. Revenue argued that such a direction amounted to “setting aside” the penalty order dated 08.02.2022, which is beyond the powers of the CIT(A) because Sec 251 does not allow the CIT(A) to set aside penalty orders for fresh adjudication.
Assessee, a charitable trust running educational institutions, countered that AO had mechanically levied penalty u/s 271AAB without considering the ITAT’s earlier order in quantum appeals (ITA Nos.714-717/Chny/2020 dated 10.04.2024). CIT(A) had recorded that AO himself had passed an appeal giving effect order dated 16.07.2024 reducing assessed income as per ITAT’s directions, but the penalty order remained unchanged. Therefore, CIT(A)’s instruction was only to recompute penalty in line with the modified income & was not a fresh adjudication or setting aside.
