2025 (11) TMI 171

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....he Petitioner. One of the main grounds of challenge to the impugned penalty order is that the same could never have been passed because from the main quantum proceedings, the Petitioner has already filed an Appeal before the ITAT which is pending. Once this is the case, the penalty proceedings ought to have been kept in abeyance till a decision was rendered in the Appeal filed by the Petitioner, and pending before the ITAT. 2. In this regard, Mr. Mistri brought to our attention the provisions of Section 275(1)(a) of the Income Tax Act, 1962 as it stood prior to its amendment on 1st April 2025. Mr. Mistri also brought to our attention an order passed by this Court in R.B. Shreeram Durgaprasad V/S Commissioner of Income-tax, Nagpur [2016] ....

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....eration before a Division Bench of this Court in R.B. Shreeram Durgaprasad (supra). After analyzing the said provisions, this Court inter alia held that the language of Section 275(1)(a) clearly shows that the order imposing penalty cannot be passed if the Appeal against the basic order of assessment is pending before the Competent superior Authority. The relevant portion of this decision read thus:- "9. The provisions of Section 275(1)(a) of the Act need to be looked into for considering the answer to second question. It is provided that no order imposing a penalty shall be passed where the assessment order is subject to appeal to the Commissioner (Appeals) or to further appeal to the Appellate Tribunal, after the expiry of period....

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....to ITAT, as per scheme of Section 275(a), the penalty on amount of Rs.10 lacs could not have been levied. It is contended that thus, the notices issued for initiating penalty proceedings and the order dated 24.2.1972 are premature. 11. With reference to various precedents placed on record, learned Chartered Accountant invited our attention to the order imposing penalty to show that in paragraph 6, it has been observed that the I.T.O. has in its order for the assessment year 1954-55 given specific instances of suppression of receipts. Absence of such finding in addition to assessment year 1959-60, was brushed aside by pointing out the specific instances which were relevant for the assessment year 1954-55. The grievance about additio....