AO found that asssessee concealed particulars of income and levied penalty u/s.271(1)(c) of the Act on assessee company. CIT(A) upheld order of AO. On appeal to the Tribunal held that once addition on which penalty had been levied was set aside to AO for fresh consideration, it is as good as there was no addition for levy of penalty u/s.271(1)(c). AO finalized penalty proceedings before ITAT set aside issue to file of AO. AO levied penalty without waiting for outcome of orders of appellate authorities. Therefore, issue needed to be re-examined by AO in light of provisions of section 275(1A) and therefore issue as set aside to the file of AO.(AY 2003 – 2004)
Asia Investments P.Ltd v. ACIT (2018) 167 DTR 59 / 63 ITR 535 / 193 TTJ 214 (Mum.)(Trib.)
S. 271(1)(c) : Penalty—Concealment-No order of imposing or enhancing or reducing or cancelling penalty or dropping proceedings for imposition of penalty shall be passed unless assessee is heard or has been given a reasonable opportunity of being heard and after expiry of six months from end of year of which order of appellate authority has been received by Commissioner. [S. 275 (IA)]