This case involves an appeal by Chaturbhoj against the order dated 04.08.2022 by the Ld. NFAC, New Delhi, pertaining to the assessment year 2009-10.
The grievance was regarding a penalty of Rs.5,22,600 imposed under section 271(1)(c) of the Income-tax Act, 1961, for failing to report long term capital gain correctly. The penalty was initially imposed based on an assessment order that was later questioned and required rectification.
The Tribunal noted that the quantum appeal was restored to the file of the Assessing Officer for rectification, implying that the basis for the penalty no longer existed. Therefore, it directed the deletion of the penalty. It was also noted that the Assessing Officer retains the right to initiate penalty proceedings afresh depending on the outcomes of the rectification order.
The Tribunal’s decision emphasizes the need for accuracy in the initial assessment proceedings and the procedural fairness in imposing penalties. By deleting the penalty, the Tribunal provided relief to Chaturbhoj, reinforcing the principles of justice and correct assessment in tax proceedings.
The appeal by Chaturbhoj was allowed, and the penalty imposed under section 271(1)(c) was deleted, marking a significant outcome for the taxpayer.
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