Case Number: ITA 2157/DEL/2022
Appellant: Natasha Khanna, Delhi
Respondent: ITO, Ward-30(1), New Delhi
Assessment Year: 2011-12
Date Filed: September 5, 2022
Order Type: Final Tribunal Order
Date of Order: July 10, 2023
Pronounced On: July 10, 2023
Summary:
This case involves Natasha Khanna, a resident of New Delhi, who filed an appeal against the Income Tax Officer (ITO), Ward-30(1), New Delhi. The primary issue revolves around the penalty levied under section 271(1)(c) of the Income-tax Act, 1961, without first resolving the quantum appeal.
Natasha Khanna, residing at P-84, Ground Floor, Chitranjan Park, Alaknanda, New Delhi, challenged the penalty imposed by the Assessing Officer (AO) under section 271(1)(c) of the Income-tax Act, 1961. The penalty was based on additions made during the assessment order dated November 20, 2015, framed under sections 147 and 144 of the Act.
The assessment was contested before the Commissioner of Income Tax (Appeals) [CIT(A)], but while the quantum appeal was still pending, penalty proceedings were initiated separately. The AO subsequently levied a penalty of Rs. 3,88,825/-, which was also challenged before the CIT(A). However, the CIT(A) decided the penalty appeal first without deciding the fate of the quantum additions, leading to procedural concerns.
Natasha Khanna, represented herself, argued that the penalty was levied without a proper resolution of the underlying quantum appeal. She contended that the CIT(A) should have decided the quantum appeal before adjudicating the penalty proceedings.
The Department, represented by Shri M. K. Pandey, Sr. DR, did not contest the procedural irregularity pointed out by the appellant.
The Tribunal, comprising Shri N.K. Billaiya, Accountant Member, and Ms. Astha Chandra, Judicial Member, reviewed the submissions and the materials on record. The Tribunal found that the CIT(A) had indeed erred by deciding the penalty appeal before resolving the quantum appeal. It was noted that procedural fairness required the resolution of the quantum appeal first to establish the foundation for any subsequent penalty.
The Tribunal allowed the appeal for statistical purposes and restored the issue to the file of the CIT(A). The CIT(A) was directed to decide the appeal relating to the levy of penalty under section 271(1)(c) of the Income-tax Act, 1961, after resolving the appeal relating to the quantum addition made in the assessment proceedings. The CIT(A) was also instructed to provide reasonable and adequate opportunity of being heard to the assessee.
Order Pronounced: July 10, 2023
Judges: Shri N.K. Billaiya (Accountant Member) and Ms. Astha Chandra (Judicial Member)
The detailed order underscores the importance of procedural correctness and ensures that appellants receive a fair hearing with all necessary steps followed in the correct sequence.
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