Independent section 271D penalty appeal restored for merits after mistaken treatment as withdrawn on a separate proceeding

A withdrawal request relating to a separate penalty appeal under section 270A could not be used to treat an appeal against penalty under section 271D as withdrawn or infructuous. The 271D penalty for violation of section 269SS was independent of the quantum assessment, and the appeal had been dismissed without any merits adjudication on that penalty. The dismissal as withdrawn was therefore unsustainable, and the matter was restored to the CIT(A) for disposal on merits.

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Issues: Whether the appeal against penalty under section 271D of the Income-tax Act, 1961 could be treated as withdrawn or infructuous on the basis of a letter relating to a separate penalty appeal under section 270A, and whether the matter required restoration to the CIT(A) for decision on merits.

Analysis: The withdrawal request on record related to a different penalty proceeding under section 270A and not to the appeal against penalty under section 271D. The penalty under section 271D for violation of section 269SS was independent of the quantum assessment and was not rendered infructuous by the circumstances referred to by the CIT(A). Since the appeal had been dismissed without adjudication on the merits of the 271D penalty, the dismissal as withdrawn could not be sustained.

Conclusion: The appeal was restored to the file of the CIT(A) with a direction to dispose of it on merits; the assessee succeeded to that extent.

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