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Judgment
Dr.Vineet Kothari,J
The Assessee has filed this Tax Case (Appeal) under Section 260-A of the Income Tax Act by raising the following purported substantial questions of law arising from the order passed by the Income Tax Appellate Tribunal on 21.9.2016 for the Assessment Year 2012-13 whereby the Tribunal has remitted the matter back to the Assessing Authority on the issue of certain additions including penalty imposed under Section 271(1)(c) of the Act:-
"i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in giving liberty to the Assessing Officer to initiate the penalty proceedings after giving effect to the Tribunal's order in the issue of quantum additions, when admittedly, the subject matter of levy of penalty was not an issue raised by the revenue in its quantum appeal?
ii) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in remitting the penalty case before the Assessing Officer, when the only issue in the penalty appeal is on disallowance of depreciation on intangible assets which has no connection with the issues in the appeal by the Department against the quantum order?"
The relevant portion of the order passed by the Tribunal is quoted below for ready reference:-
"ITA No.102/Mds/16(A.Y:2011-12)
Regarding the main grievance of Revenue in this appeal is with regard to direction of Learned Commissioner of Income Tax (Appeals) to deletion of penalty imposed under Section 271(1)(c) of the Act by Assessing Officer.
10.1. The Learned Commissioner of Income Tax (Appeals) was justified in deleting the penalty imposed under Section 271(1)(c) of the Act on the reason that the assessee structured the whole transaction with respect to intangible assets and wrong claim of depreciation with the motive to reduce the tax liability. Against this, the Revenue is in appeal before us.
10.2. The facts of the case are that the assessee filed return of income on 30.9.2011 declaring an income of Rs.24,21,36,760/-. Subsequently, the case was selected for scrutiny and the assessment was completed making additions in respect of disallowance in respect of advance made to M/s.Cibi International P.Ltd., Disallowance under Section 80-IA, disallowance of income from sale of scribes, disallowance in respect of amount spend on leasehold land, disallowance of depreciation claimed on intangible assets, disallowance of TUF reimbursement claimed as capital receipt, disallowance of excess depreciation claimed on machines and disallowance of amount on proto type samples. Further, the Assessing Officer stated in
penalty order that the assessee went in appeal before Commissioner of Income Tax (Appeals) except for addition on disallowance of excess depreciation on machineries and later withdrew the appeal filed on the addition made on disallowance of depreciation of intangible assets. The Assessing Officer elaborately discussed in the penalty order the reasons for levying penalty and levied a penalty of Rs.1,76,63,327/- under Section 271(1)(c) of the Act.
10.3. We have heard both the parties and perused the material on record. In our opinion, it is preposterous to decide the issue of penalty levied under Section 271(1)(c) of the Act at this stage, since certain issue relating to addition of deletion by the Learned Commissioner of Income Tax (Appeals) are remitted by us to the file of Assessing Officer for fresh consideration for the assessment year under consideration. Hence, at this stage, the assessment order on the basis of which penalty has been levied, still the subject matter of litigation, which is not. Hence, in our opinion, the Assessing Officer is at liberty to initiate the penalty proceedings only after giving effect to the Tribunal order by him in the issue of quantum addition.
Accordingly, we vacate the penalty order at this stage. As such we dismiss this appeal of Revenue as infructuous.
In the result, the appeals of the Revenue in ITA No.101/Mds./2016 & ITA No.103/Mds./2016 are partly allowed for statistical purposes and ITA No.102/Mds./2016 is dismissed."
The learned counsel for the Assessee submitted that since the issue relating to depreciation of intangible assets (Goodwill and Trademarks), the same was not pressed and withdrawn by the Assessee before the learned Commissioner of Income Tax (Appeals). It is, therefore, such an issue was not even pending before the learned Tribunal and therefore there was no question of remitting the matter back to the Commissioner of Income Tax (Appeals) on the said issue.
Having heard the learned counsel for the Assessee, we are satisfied that no substantial question of law arises in the present case for consideration by this Court under Section 260A of the Act since the matter has been remitted to the Assessing Officer for re-consideration on the issue of additions made by the Assessing Authority and the penalty under Section 271(1)(c) is a consequential issue it can be considered after a decision is arrived on the issue of additions, the present Appeal is premature one and the Assessee is free to move the Assessing Authority in pursuance of the direction of the Tribunal. Therefore, we are of the considered opinion that no substantial question of law requires our consideration.
The Appeal is devoid of merits and is liable to be dismissed. Accordingly, it is dismissed. No order as to costs.