R. BHARATHAN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an appeal filed by the assessee under Section 260A of the IT Act challenging order of the Tribunal confirming penalty levied under Section 271(1)(c) of the IT Act for the asst. yr. 1985 -86. Even though five questions are raised by the assessee as arising from order of the Tribunal, we find only two issues are involved. One is limitation against levy of penalty and the other, whether penalty could be levied on the facts of the case.

(2.) SO far as the first question is concerned, we do not find there is any case for interference on ground of limitation because the penalty proceeding under challenge is a revised proceeding continued by the officer after the Tribunal set aside the penalty in first round and remanded the matter to the AO for reconsideration. In fact the original penalty order was set aside because the quantum of assessment was set aside for reconsideration by the AO. The Tribunal rightly set aside the penalty because since the penalty is based on the finding in the assessment and when such assessment is set aside for reconsideration, necessarily penalty also has to be reconsidered. It is clear from the Tribunal's order that the Tribunal originally did not cancel assessment and penalty orders, but only directed modification after fresh enquiry pertaining to some of the issues, that too, after confirming certain additions in the assessment. Since revised penalty proceeding is only a continuation of the penalty originally initiated in time, the assessee cannot raise limitation. We do not find any ground to interfere with the finding of the Tribunal on this issue.

(3.) WE , therefore, dismiss the appeal.