2010 (1) TMI 1172

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....essment year 2003-04. 2. When it was pointed out to the learned Department Representative that, by way of order dated 30th July 2009, passed by a coordinate bench of this Tribunal, the related quantum additions have been restored to the file of the Assessing Officer for fresh consideration, he suggested that the penalty matter should also be restored to the file of the Assessing Officer. 3. Learned counsel for the assessee, however, contends that once the quantum additions, in respect of which impugned penalty was levied, are not approved by the Tribunal, the very cause of action for the penalty does not survive, and the penalty should be quashed for this reason alone. Without prejudice to this argument, he further submits that the ve....

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....e an addition to income is made, the Assessing Officer, or the CIT(A) as the case may be, has also to satisfy himself that it is a fit case for initiating the penalty proceedings as well. Only then, and only in respect of such additions which are also considered appropriate for being visited with initiation of penalty proceedings, the penalty proceedings under section 271(1)(c) are initiated. It is a natural corollary of the quantum addition being restored to the file of the A.O. or the CIT(A) that the addition, even if repeated - wholly or partly, does not necessarily exist in the same form. The reasons of, and circumstances surrounding the said authority confirming the quantum additions again, may vary in such a situation. Therefore, the ....