VRML Constructions Pvt Ltd Vs Union of India & Ors (Bombay High Court)
Bombay HC Order on quashing penalty being imposed by AO on ITBA technical glitch with option to impose penalty as per appeal decision
Basis for levy of penalty
The relevant paragraph from the impugned penalty order
“The assessee has offered explanation in response to the notices issued during the course of penalty proceedings but was not found satisfactory because as per ITBA data there Form no. 35 is not found whereas assessee is claimed he is in before CIT(A) as facts are not verifiable. I have no alternate but to import penalty. Accordingly, the penalty proceeding is decided based on the information available on records
Observation and decision:-
This is not a case where the Assessing Officer, after being conscious of the institution of the Appeal, has nevertheless deemed it appropriate to exercise the powers under Section 275(1)(a) of the IT Act. The Assessing Officer has only observed that since the ITBA data did not reflect the institution of the quantum Appeal, the Assessing Officer felt that he had no alternative but to impose a penalty.
Thus, this is not a case where the penalty was imposed after independent application of mind. The main grounds for imposing the penalty were because the Assessing Officer felt that he had no alternative but to impose the penalty in the absence of the ITBA portal, reflecting the institution of the quantum Appeal by the Petitioner.




