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2024 (12) TMI 821 - AT - Income TaxPenalty levied u/s 271AAB(1A) and section 271AAB - Quantum addition disputes leading to penalty proceedings - HELD THAT - As per Section 275(1A), AO is empowered in passing an order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty on the basis of assessment as revised by giving effect to the orders passed by the Joint Commissioner (Appeals) or the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court or Revision Order passed u/s. 263 or 264, by giving reasonable opportunity of hearing to the assessee and within six months from the receipt of the said appellate or revision order. Thus in our considered view, in the event of the order passed by the Tribunal is modified by Hon ble High Court of Gujarat, the AO is required to give effect to the judgment passed by the Hon ble High Court by invoking provisions of Section 275(1A) of the Act and revise the penalty order accordingly. Thus we do not find any infirmity in the orders passed by Ld. CIT(A) who has duly followed Co-ordinate Bench decision of this Tribunal and deleted proportionate penalty levied by the Assessing Officer. Further the Revenue could not place on record, whether any order staying the operation of the impugned Tribunal order issued by the High Court of Gujarat. Thus we do not find any infirmity in the order passed by the Ld. CIT(A) confirming the penalty to the extent of additions confirmed by the ITAT. Ground raised by the Revenue is devoid of merits and liable to be dismissed.
Issues:
1. Penalty levied under section 271AAB of the Income Tax Act for Assessment Years 2017-18 & 2018-19. 2. Quantum addition disputes leading to penalty proceedings. 3. Appeal against quantum addition before ITAT. 4. Effect of ITAT's order on penalty determination. 5. Dispute over penalty deletion by CIT(A) pending High Court appeal. 6. Interpretation of Section 275(1A) for penalty imposition. Detailed Analysis: 1. The judgment concerns two appeals filed by the Revenue against a common appellate order confirming penalties under sections 271AAB(1A) and 271AAB of the Income Tax Act for the Assessment Years 2017-18 & 2018-19. The penalties were imposed due to differences between returned and assessed incomes. 2. The assessment order for the year 2017-18 resulted in penalty proceedings under section 271AAB(1A)(b) due to discrepancies in income. The CIT(A) confirmed a partial addition, leading to the imposition of a penalty by the Assessing Officer. Subsequently, the ITAT reduced the quantum of addition, affecting the penalty determination. 3. The assessee appealed against the quantum addition before the ITAT, which resulted in varying confirmations and deletions of additions/disallowances by the CIT(A) and ITAT. The ITAT's decision influenced the penalty calculation by the Assessing Officer. 4. Following the ITAT's order modifications, the CIT(A) adjusted the penalty amount, deleting a portion based on the quantum deleted by the ITAT and confirming the balance. This process was repeated for the Assessment Year 2018-19, leading to penalty adjustments based on the ITAT's decisions. 5. The Revenue challenged the CIT(A)'s deletion of a portion of the penalties, arguing that pending High Court appeals against quantum proceedings should impact the penalty determination. However, the CIT(A) and the ITAT found no merit in the Revenue's argument and upheld the penalty adjustments based on the ITAT's decisions. 6. The judgment also delves into the interpretation of Section 275(1A) of the Income Tax Act, which empowers the Assessing Officer to revise penalty orders based on revised assessments following appellate or revision orders. The Tribunal dismissed the Revenue's appeals, emphasizing the need for the Assessing Officer to give effect to High Court judgments on penalty revisions. In conclusion, the Tribunal dismissed the Revenue's appeals, upholding the penalty adjustments made by the CIT(A) based on the ITAT's decisions and highlighting the importance of following statutory provisions for penalty revisions post-appellate or revision orders.
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