Case Law Details
Chaturbhoj Vs ITO (ITAT Delhi)
The case of Chaturbhoj Vs ITO was heard by the Income Tax Appellate Tribunal (ITAT) Delhi. The appeal was filed by the assessee against the penalty order issued under Section 271(1)(c) of the Income Tax Act. The ITAT held that if the matter is restored to the Assessing Officer for passing a rectification order, the penalty imposed under Section 271(1)(c) does not survive. This article provides an analysis of the case and its implications.
Analysis: The assessee submitted that the ITAT SMC Bench had already restored the matter to the file of the Assessing Officer for making necessary rectifications. Therefore, the penalty imposed under Section 271(1)(c) should be deleted as it does not survive. The learned Senior DR agreed that the matter was restored for rectification but argued that the Assessing Officer could take appropriate action for imposing the penalty based on the outcome of the rectification order.
After considering the submissions, the ITAT observed that the assessee had challenged the addition of long-term capital gain in the quantum appeal. The penalty was imposed by the Assessing Officer based on the same issue. Since the quantum appeal was restored for rectification, the penalty imposed on the assessee did not survive. The ITAT directed the Assessing Officer to delete the penalty. However, it clarified that the Assessing Officer could initiate and pass an appropriate penalty order under Section 271(1)(c) based on the outcome of the rectification order.
Conclusion: The ITAT Delhi, in the case of Chaturbhoj Vs ITO, ruled that if a matter is restored to the Assessing Officer for passing a rectification order, the penalty imposed under Section 271(1)(c) does not survive. The ITAT directed the Assessing Officer to delete the penalty in this case but clarified that the Assessing Officer could initiate penalty proceedings based on the outcome of the rectification order.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
