Penalty Appeal Restoration remitted for decision after quantum appeal, with direction to afford an opportunity of hearing expeditiously.

Restoration of the penalty proceeding is directed where the penalty appeal was dismissed for non compliance while the quantum appeal remained pending; the Tribunal held the penalty question depends on the quantum determination and therefore remitted the penalty appeal to the Ld. CIT(A)/NFAC to be adjudicated only after the quantum appeal is decided. The Ld. CIT(A)/NFAC is directed to afford the assessee an opportunity of hearing and decide the penalty matter on facts and law in the interest of justice.

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Issues: Whether the penalty appeal u/s 270A of the Income-tax Act, 1961 should be restored to the file of the Ld. CIT(A) / NFAC for adjudication after disposal of the pending quantum appeal.

Analysis: The Tribunal noted that the penalty appeal before the Ld. CIT(A) / NFAC was dismissed for non-compliance while the quantum appeal remained pending. The Tribunal held that the penalty question is dependent on the outcome of the quantum proceedings and observed that the penalty appeal ought to be decided only after the quantum appeal is adjudicated. Considering the facts and in the interest of justice, the Tribunal found it appropriate to remit the penalty issue to the Ld. CIT(A) / NFAC to be decided after the quantum appeal, with directions to afford the assessee an opportunity of hearing and decide the matter on facts and law.

Conclusion: The penalty appeal is restored to the file of the Ld. CIT(A) / NFAC for adjudication after the quantum appeal is decided; decision given in favour of the assessee (grounds allowed for statistical purposes).

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