U.B.S Bedi, J.M:— This appeal of the Revenue was earlier dismissed by this bench vide order dated 12.12.2006 Against such order of dismissal of appeal by ITAT, the department went in appeal before Hon'ble Delhi High Court u/s 260A of the I.T Act, 1961. The Hon'ble Delhi High Court has directed vide judgment dated 25.08.2008, while remitting the case to ITAT, to decide the appeal on merit.
2. At the very outset, Ld. Counsel for the assessee Shri V.K Jain, CA, submitted that there were three issues on which penalty of Rs. 1,25,89,915/- u/s 271(1)(c) of the Act has been imposed and ITAT has set aside two additions in relation to loss of sale of shares of Kajaria Ceramics Ltd. and financial charges disallowed u/s 14A of the Act, amounting to Rs. 1,69,45,512/- and restored it on the file of the Assessing Officer and as regards the third addition on salary and wages paid to Dua Engineering Works Pvt. Ltd. of an amount of Rs. 6 lakhs disallowed by the Assessing Officer is concerned, such disallowance has been deleted in full, by ITAT in I.T.A No. 4457.Del./2003 dated 30.4.2009 by ‘F’ Bench, therefore, penalty on the basis of these additions needs to be set aside and matter requires to be restored on the file of the Assessing Officer for re-deciding the penalty afresh considering the outcome of fresh proceedings with respect to these two additions and to this plea of the Ld. Counsel of the assessee, Ld. DR. did not object and very fairly submitted that matter should go back to the file of the Assessing Officer for re-consideration of the penalty afresh.
3. We have heard both the sides, considered the material on record and find that penalty of Rs. 1,25,89,915/- has been imposed by the Assessing Officer which came to be deleted by CIT(A) in appeal of the assessee and action of the CIT(A) was confirmed by ITAT in department's appeal, against which department filed appeal before Hon'ble Delhi High Court. The Hon'ble Delhi High Court vide judgment dated 25.08.2008 (supra) remitted the matter back to ITAT for re-deciding the appeal on merit. Consequent upon such direction of the Hon'ble Delhi High Court, case was fixed for hearing and both the parties have been heard to decide the penalty matter on merit. It is not disputed that two of the three additions made by the Assessing Officer, on the basis of which penalty has been imposed, has already been set aside and the matter stands restored back on the file of the Assessing Officer by ITAT in quantum appeal of the assessee and third addition has been completely deleted. So, it was pleaded by the Ld. Counsel for the assessee that the matter should be restored back on the file of the Assessing Officer for re-deciding the penalty matter afresh and to this prayer of Ld. Counsel for the assessee, Ld. DR did not object and submitted that matter can go back to the file of the Assessing Officer for re-consideration of the penalty proceedings after quantum additions with respect to two items are decided. As such, while considering entirety of facts, circumstances and material on record, we set aside the order of CIT(A) with respect to penalty u/s 271(1)(c) of the Act, and restore the matter back on the file of the Assessing Officer with the direction to re-decide the penalty matter afresh after two of the three additions made by the Assessing Officer and set aside by ITAT are finally decided after giving due opportunity to the assessee. We hold and direct accordingly.
4. In the result, the appeal filed by the department gets accepted for statistical purposes.