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2015 (5) TMI 1235 - AT - Income TaxPenalty levied u/s 271(1)(c) - appeal against the quantum addition made by the Assessing Officer before the Commissioner of Income Tax (Appeals) was withdrawn by the assessee - CIT (Appeals) power to allow withdrawal of appeal - HELD THAT:- It is not in dispute that assessee filed an appeal against the quantum addition made by the AO before the CIT (Appeals). However, the said appeal was withdrawn by the assessee. It is not known how the CIT (Appeals) permitted the assessee to withdraw the appeal filed before him, when he has no such power to allow the assessee to withdraw the appeal. This Tribunal is of the considered opinion that when appeal was filed before the Commissioner of Income Tax (Appeals), the CIT(A) is bound to dispose of the same on merits. Since the appeal was withdrawn by the assessee, the Commissioner of Income Tax (Appeals) dismissed the appeal as withdrawn and confirmed the penalty levied by the Assessing Officer without any appreciation of materials available on record. It is well settled principles of law that assessment proceedings and penalty proceedings are separate and distinct and therefore, Assessing Officer is excepted to reappreciate the materials available on record. Likewise, when the appeal filed before the Commissioner of Income Tax (Appeals), the Commissioner of Income Tax (Appeals) is also expected to reappreciate the materials available on record while disposing the appeal filed by the assessee. In this case, Commissioner of Income Tax (Appeals) without reappreciation of the materials available on record, simply dismissed the appeal on the ground that appeal against the order of assessment was withdrawn. This Tribunal is of the opinion that merely because appeal was withdrawn by the assessee that cannot be a reason for confirming penalty levied by the Assessing Officer and the Commissioner of Income Tax (Appeals) has to independently examine the materials available on record. Accordingly, the order of the Commissioner of Income Tax (Appeals) is set aside and the issue of penalty is remitted back to the file of the Commissioner of Income Tax (Appeals). Appeal of the assessee is allowed for statistical purposes.
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