Penalty for Under-Reporting: ITAT Remands Matter Due to Pending Quantum Appeal Before CIT(A) [Read Order]

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has remanded the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] due to the pending quantum appeal, in a case concerning the confirmation of a penalty for under-reporting of income. 

Sarika Dadaso Zende (assessee) engaged in the business of selling housekeeping materials and providing manpower services, had filed her original return of income on 11.11.2020, declaring a total income of Rs. 30,06,080/-.

The assessee filed a revised return admitting a lower income of Rs. 15,70,920/- and claiming a higher refund. The revised return included a deduction claim of Rs. 24,25,158/- for statutory dues paid in the financial year 2019-20, which were previously disallowed under Section 43B due to delayed payment.

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The Assessing Officer (AO) disallowed the deduction, citing it as an incorrect claim, and added the amount back to the taxable income. The AO also disallowed an interest payment of Rs. 2,07,144/- on delayed service tax liability. The assessee filed an appeal before the CIT(A), against the disallowance of the deduction.

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Additionally, the AO initiated penalty proceedings under Section 270A for under-reporting of income, culminating in a penalty of Rs. 15,48,108/-.

Aggrieved by the penalty, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. However, the CIT(A) confirmed the penalty levied by the AO. Further Aggrieved the assessee filed an appeal before the ITAT. 

The counsel for the assessee submitted that the quantum appeal was restored to CIT(A) with direction. Therefore, the counsel submitted that he had no objection to restoring the penalty matter to the CIT(A). 

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The two-member bench comprising Shri Rama Kanta Panda (Vice President) and Shri Vinay Bhamore (Judicial Member) observed that the quantum appeal was restored for fresh adjudication and it was pending before the CIT(A).

Therefore, The tribunal restored the issue of penalty to CIT(A) for fresh adjudication. Thereby., the appeal of the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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