2019 (3) TMI 1956 - AT - Income Tax

Penalty imposed u/s 271(1)(c) - diversified views - HELD THAT - Members constituting the co-ordinate Bench passed the divergent orders qua imposition and affirmation of penalty u/s 271(1)(c) therefore reference u/s 255(4) of the Act was made to the Hon ble President of ITAT for adjudication of the issues under consideration by Ld. Third Member 2019 (6) TMI 1283 - ITAT AMRITSAR who decided the issues in favour of the assessee and directed the registry to list these appeals before the Division Bench for passing an order in confirmity with the majority view (kindly refer para no. 9 to 12 of the order) . As per section 255(4) of the Act the majority view is final and consequential order is required to be passed and hence as per majority view the penalty imposed by the Assessing Officer and sustained by the ld. CIT(A) is liable to be deleted. Consequently the penalty stands deleted.

Summary

Issues:
Appeal against penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 for assessment years 2006-07, 2007-08, and 2008-09.

Analysis:

1. Imposition of Penalty by Assessing Officer and CIT(A):
The appellant filed appeals against the penalty imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961, which was subsequently upheld by the CIT(A)-Jammu. The Members of the co-ordinate Bench passed divergent orders regarding the imposition and affirmation of the penalty, leading to a reference under section 255(4) of the Act to the Hon'ble President of ITAT for adjudication. The Third Member, in a decision dated 06.02.2019, ruled in favor of the assessee, directing the appeals to be listed before the Division Bench for a final order in accordance with the majority view. Pursuant to section 255(4) of the Act, the majority view is considered final, resulting in the deletion of the penalty imposed by the Assessing Officer and sustained by the CIT(A).

2. Consequential Order and Deletion of Penalty:
The Third Member's decision in favor of the assessee led to the deletion of the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961. As per the majority view, the penalty was deemed to be not applicable, and the appeals filed by the assessee were allowed. Consequently, the penalty that was initially imposed and sustained by the CIT(A) was set aside, and the appeals were decided in favor of the assessee. The order pronouncement in the open Court on 26.03.2019 finalized the deletion of the penalty, bringing the matter to a close in favor of the appellant.

This detailed analysis of the judgment highlights the legal proceedings involving the imposition and subsequent deletion of the penalty under section 271(1)(c) of the Income Tax Act, 1961, for the relevant assessment years, ultimately resulting in a favorable outcome for the assessee.