2018 (12) TMI 1994 - AT - Income Tax

Penalty u/s 271(1)(c) - additions to the total income of the assessee, including STCG, LTCG, future option loss, and administrative expenses - HELD THAT - We find that sub-clause (iii) of section 271(1)(c) provides mechanism for quantification of penalty. It contemplates that the assessee would be directed to pay a sum in addition to taxes, if any, payable him, which shall not be less than , but which shall not exceed three times the amount of tax sought to be evaded by reason of concealment of income and furnishing of inaccurate particulars of income. In other words, the quantification of the penalty is depended upon the addition made to the income of the assessee. Penalty in the present case was imposed qua disallowance in respect of future and option loss. This issue has been set aside by the Tribunal in the appeal of the assessee in 2016 (9) TMI 918 - ITAT AHMEDABAD to the file of the ld. AO for fresh adjudication. Therefore, since set aside proceedings qua addition on which impugned penalty has been imposed, is pending before the Assessing Officer, penalty at this stage is not sustainable. Assessee appeal allowed.

Summary

Issues involved: Appeal against deletion of penalty u/s 271(1)(c) of the Income Tax Act, 1961 by ld. CIT(A) for the Asstt. Year 2009-10.

Summary:
1. The Revenue appealed to the Tribunal against the deletion of a penalty of Rs. 26,39,116/- imposed by the Assessing Officer u/s 271(1)(c) for the Asstt. Year 2009-10.
2. The Assessing Officer had made additions to the total income of the assessee, including STCG, LTCG, future & option loss, and administrative expenses.
3. The ld. CIT(A) deleted the penalties related to STCG and LTCG, but confirmed the disallowance of future & option loss. Both Revenue and assessee appealed to the ITAT against these decisions.
4. The penalty u/s 271(1)(c) was imposed by the Assessing Officer for the disallowance of future & option loss. However, the Tribunal set aside this issue for fresh adjudication.
5. The Tribunal held that since the issue on which the penalty was imposed was pending before the Assessing Officer, the penalty was not sustainable. The ld. CIT(A) cancelled the penalty, which was upheld by the Tribunal.
6. The cross objection (CO) of the assessee supported the ld. CIT(A)'s order and did not raise any new grievances. It was dismissed as infructuous.
7. The appeal of the Revenue and the CO of the assessee were both dismissed by the Tribunal on 10th December, 2018 at Ahmedabad.