2025 (2) TMI 159

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....nder Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), for the Assessment Year (AY) 2011-12. Facts of the case: 2. The assessment was completed under Section 143(3) of the Act on 30.08.2013, wherein the AO made an addition of Rs. 12,18,000/- by treating supervision income as "Income from Other Sources" instead of allowing it as manufacturing income eligible for deduction under Section 80-IB of the Act. Based on this addition, the AO initiated penalty proceedings under Section 271(1)(c) of the Act and levied a penalty of Rs. 1,13,900/- vide order dated 23.03.2016. 3. The CIT(A), vide order dated 25.10.2024, upheld the penalty without considering the assessee's submission that the ITAT had already ....

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....me of Rs. 12,18,000/- as income from manufacturing activity for the purpose of computing deduction under section 80IB of the Act and as such addition made is deleted. Copy of ITAT order dated 14.10.2019 was submitted vide our submission dated 16.10.2024. As such there is no difference between assessed income and return income. This submission is fully ignored by CIT Appeal Therefore, penalty u/s. 271(1) (c) of the income tax act. 1961 is not justified and deserve to be cancelled. 4. The appellant craves leave to add, alter or modify the above grounds of appeal at the time of hearing. 5. The Authorized Representative (AR) of the assessee submitted that the Ahmedabad Bench, vide order dated 14.10.2019, held that supervision income....

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....oned decision. 7.2. Most glaringly, the assessee had specifically submitted the ITAT's order dated 14.10.2019, wherein the very basis of the penalty-the addition of Rs. 12,18,000/--was deleted. Despite this crucial piece of evidence, the CIT(A) chose to completely ignore it and proceeded to confirm the penalty in a perfunctory manner. This conduct is highly arbitrary and in gross violation of the principles of natural justice and disrespect to the orders passed by higher judicial Forums. 7.3. It is well established principle that an order which lacks reasoning and fails to deal with the submissions of the parties is liable to be set aside. Many judicial precedents also held that an appellate authority must pass a reasoned and speaking....