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2014 (12) TMI 844 - HC - Income TaxAdditions accepted and penalty proceedings initiated u/s 271(1)(c) – Penalty proceedings initiated against deemed dividend and agricultural income - Held that:- Assessee rightly contended that the penalty proceedings u/s 271(1)(c) cannot be pursued when the plea was specifically abandoned at the first instance without reserving any right pending appeal, the orders of both the first and second appellate authorities cannot be sustained, as the point had not been considered at all - the proceedings of the CIT(A) and the Tribunal only state that the explanation offered by the assessee was not correct, meaning thereby that both the authorities went into the merits of the explanation offered by the assessee on penalty and not on the issue whether the original authority had reserved his right to proceed u/s 271(1)(c) relating to the deemed dividend - since there is no consideration by the Tribunal on the ground raised by the assessee, the matter is to be remitted back to the Tribunal to consider the scope of the second penalty order – Decided in favour of assessee.
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