9911796707
TMI Blog2011 (7) TMI 1399X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case and in law, the Ld. CIT(A) erred in cancelling the penalty order passed under section 271(1)(c) as the quantum appeal has been set aside by the ITAT and had been restored to the file of the Assessing Officer to consider the matter afresh. 2. Whether the order of the Ld. CIT(A) is not contrary to the decision of Hon'ble Madras High Court in the case of CIT Vs. Hind Mercantile Corporation (177 ITR 149, (MAD) CIT Vs. V. Ramakrishna Sons (P) Ltd. (192 ITR 282, (MAD). 3. The facts of the case are that the A.O., vide order dated 29.12.2006 passed under section 144 of the I.T. Act did not allow the exemption claimed under section 10A and brought to tax. He initiated proceedings under section 271(1)(c). When the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant year has been set aside. When the assessment itself was set aside, the question of levy of penalty could no longer be a live issue. In order that the penalty proceedings should survive, the assessment proceedings should be alive. As the assessment had been set aside, the penalty proceedings could not have been terminated by the cancellation of penalty. The question as to whether penalty was leviable or not has to be considered in the light of the findings in the assessment to be made as a result of directions given by the Tribunal while setting aside the same. In these circumstances, the Tribunal acted erroneously in cancelling the penalty. In fact, the questions as framed appear to answer themselves as the questions are answere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in regard to the loss in the spun pipe plant and the excess remuneration and remitted to the Appellate Assistant Commissioner the issue regarding the unexplained hundi credits. In the course of the penalty proceedings, the Inspecting Assistant Commissioner considered the disallowances made by the Income-tax Officer for levy of penalty. The Tribunal which held that no penalty was leviable in respect of disallowances in regard to the loss in the spun pipe plant and the excess remuneration paid to the financial adviser which had been allowed in the appeal from the assessment orders, also held that, as the assessee had produced the discharge hundi khokas in proof of the genuineness of the loans and in the absence of materials to establish that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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