Tribunal overturns penalty under Income Tax Act, citing assessment order.

The Tribunal set aside the Commissioner of Income Tax (Appeals) order and directed the deletion of the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961. This decision was made as the disputed issue was referred back to the Assessing Officer for reexamination in a quantum appeal, rendering the penalty unsustainable based on the assessment order. The Tribunal cited a similar case and instructed the Assessing Officer to delete the penalty, ultimately allowing the appellant's appeal.

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Issues:
Challenge to levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961.

The judgment pertains to an appeal filed against the order of the Commissioner of Income Tax (Appeals) under Section 271(1)(c) and 250 of the Income Tax Act, 1961. The appellant, engaged in real estate business, had entered into a Joint Development Agreement (JDA) with co-owners. The Assessing Officer found income had escaped assessment and issued notices. The appellant filed replies and attended hearings. The Assessing Officer determined total income, including the share of profit from co-owner properties, and passed an order under Section 143(3) r.w.s. 147 of the Act. Subsequently, penalty proceedings were initiated, and despite the appellant's submissions, the penalty was levied and upheld by the CIT(Appeals).

During the appeal hearing, the appellant contended that the CIT(Appeals) erred in confirming the penalty as the Show Cause Notice did not specify whether it was for concealment of income or furnishing inaccurate particulars. The appellant had also appealed the assessment order, which was set aside by the Tribunal for reexamination. The Tribunal observed that since the disputed issue was referred back to the Assessing Officer for verification in the quantum appeal, the penalty based on the assessment order could not be sustained. Citing a similar case, the Tribunal directed the Assessing Officer to delete the penalty and allowed the appellant's appeal.

The Tribunal, after considering the arguments and perusing the records, found that the penalty under Section 271(1)(c) could not be upheld due to the quantum appeal's outcome and the directions given by the Tribunal in a similar case. As the disputed issue was referred back to the Assessing Officer for reexamination, the Tribunal set aside the CIT(Appeals) order and directed the deletion of the penalty, allowing the appellant's appeal for statistical purposes.

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