Penalty Proceeding

[Awdhesh Kumar Singh]

Hi

Please let me know about this query:

There were three different additions made by AO  in an assessment for AY08-09. The assessee has filed appeal before cit (A) against the above arder but has raised only one point in appeal filed and has not contested on other two points.

Now assessee need to appaer before same AO for penalty initiated by AO in assessment order for AY 08-9. Kindly let me know can penalty be levied when appeal is pending before CIT (A).

 

Thanks

[CAGOPALJI AGRAWAL]

Practically, the AO may be requested to keep the penalty proceedings in abeyance till the order of the appeal. Since AO never asks for copy of appeal filed except the receipt.

Legally, the AO may initiate the penalty proceedings even on the grounds of appeal also. Of course there are many catches to avoid the penalty also.

AI Summary

Penalty proceedings may be initiated even while a substantive appeal is pending, though abeyance can be requested. The assessing officer may be requested to keep penalty proceedings in abeyance pending the appeal, and frequently does not require a copy of the appeal; however, the officer is legally permitted to initiate penalty proceedings even on matters under challenge in a pending appeal, though taxpayers retain procedural and substantive defences to contest or avoid the penalty.