Tribunal restores section 270AAC penalty to Assessing Officer after quantum addition is sent back for fresh adjudication

5-Second Takeaway

The Tribunal restored the section 270AAC(1) penalty to the Assessing Officer because the underlying addition for unexplained money had already been sent back for fresh adjudication in the quantum appeal. The assessee was to be given adequate opportunity of hearing and cooperate in furnishing information.

The Assessing Officer had levied penalty of Rs. 19,45,531 under section 270AAC(1) on the basis of an addition for unexplained money arising from cash deposits and withdrawals in the assessee’s bank account.

In the quantum proceedings, however, the Tribunal had already restored the disputed addition to the Assessing Officer for fresh adjudication. Once the foundation addition was sent back, the penalty could not be finally sustained on the existing record.

The Tribunal therefore set aside the penalty order and restored the penalty issue to the Assessing Officer for fresh decision on merits.

It also directed that the assessee be afforded adequate opportunity of hearing and that he cooperate by furnishing the necessary information.