By K. B. BHUJLE
Advocate
The assessee did not file the
return of income for the year under consideration, though she received a total
sum of Rs. 62 lakh out of the sale consideration for sale of the land and
thereafter she filed the return of income only after notice u/s. 148 of the Act
and offered the aforesaid amount to tax. The income was assessed at Rs. 62
lakh. However, the Assessing Officer also initiated the penalty proceedings to
which the assessee filed the reply. The Assessing Officer dropped the penalty
proceedings considering the reply submitted by the assessee. Against the
assessment order the assessee filed appeal before the Commissioner (Appeals).
The said appeal came to be dismissed by the Commissioner (Appeals). Thereafter,
the Assessing Officer issued the fresh notice to the assessee for imposing the
penalty u/s. 271(1)(c) and passed the order imposing the penalty u/s.
271(1)(c).
On appeal, the Commissioner (Appeals)
cancelled the penalty levied u/s. 271(1)(c). The Tribunal confirmed the order
of the Commissioner (Appeals).
On appeal by the Revenue, the
Gujarat High Court upheld the decision of the Tribunal and held as under:
“i)
It can be said that fresh penalty proceedings are permissible only with
a view to give effect to the order of the higher Forum revising the assessment
and a fresh penalty order can be passed and/or penalty can be imposed,
enhancing, reducing or canceling the penalty or dropping the proceedings for
the imposition of the penalty on the basis of the assessment as revised by
giving effect to such order of the Commissioner (Appeals) …. etc.
ii)
Therefore, in a case where the assessment was not required to be revised
pursuant to the order passed by the Commissioner (Appeals) or the Appellate
Tribunal or the High Court or the Supreme Court, as the case may be, the power
u/s. 275(1A) cannot be exercised and the fresh penalty proceedings cannot be
initiated once earlier the penalty proceedings were dropped after considering
the reply submitted by the assessee, as there is no revised assessment which is
required to be giving effect to. Therefore, it is to be noted that the
Commissioner (Appeals) as well as the Tribunal are justified in deleting the
penalty imposed u/s. 271(1)(c) faced with a situation that earlier the penalty
proceedings were dropped after considering the reply submitted by the assessee
and that thereafter the assessment was not required to be revised giving effect
to the order passed by the learned Commissioner (Appeals) as the Commissioner
(Appeals) simply confirmed the assessment order determining the income at Rs.
62 lakh. In the facts and circumstances of the case narrated herein above, the
order passed by the Tribunal deleting the penalty u/s. 271(1)(c) is to be
confirmed.
iii) No substantial question of law arises and
hence, present Tax Appeal deserves to be dismissed.”
