An order passed in ignorance of binding precedents is erroneous. ITAT deleted penalty u/s 271(1)(c) when in subsequent year it was deleted on similar facts
ABCAUS Case Law Citation:
ABCAUS 3153 (2019) (09) ITAT
Important case law relied upon by the parties:
CIT vs. Reliance Petro Products Pvt Ltd (322 ITR 158) SC
Hero Cycles (P) Ltd vs. Commissioner of Income-tax (Central) Ludhiana [(2015) 63 taxmann.com 308 (SC)]
MDC Pharmaceuticals Pvt Ltd vs. Department of Income Tax
M/s Padmini Infrastructure Developers (India) Ltd vs. DCIT
CIT vs. Abhishek Industries Ltd [(2006) 286 ITR
S. A Builders vs. CIT [(2007) 288 ITR 1 (SC)]
Hindustan Steel vs. State of Orissa 83 ITR 26 (SC)
In the instant case an appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) in confirming the penalty levied by the Assessing Officer (AO) u/s 271(1)(c) of the Income Tax Act, 1961 (the Act).
Before the Tribunal, the assessee submitted that the CIT (A) had wrongly confirmed the penalty on account of disallowance of interest u/s 36(l)(iii) of the Act which is highly debatable issue with difference of opinion.
It was further submitted that the Commissioner of Income Tax (Appeals) had reversed his own penalty order in subsequent Assessment Years on same issue in case of appellant.
The Tribunal observed that in assessee’s own case the same incumbent in the Office of CIT(A) deleted the penalty levied by the Assessing Officer U/s 271(1)(c) of the Act, on the identical issue in identical facts and circumstances.
However, for the year under consideration, the same incumbent in the Office of CIT(A) had confirmed the penalty levied by the Assessing Officer U/s 271(1)(c) of the Act, on identical issue in identical facts and circumstances.
The Tribunal noted that the reason for this inconsistency in the order of the CIT(A) as compared with the decision of the CIT(A) in subsequent Assessment Years was not far to seek. It was found that in subsequent assessment years CIT(A) based his decision on the binding precedents of the Hon’ble Supreme Court. However, these binding precedents were not considered by the CIT(A) in the impugned order.
An order passed in ignorance of binding precedents is erroneous
The Tribunal opined that the impugned order was passed by the CIT(A) in ignorance of the aforesaid binding precedents as laid down by the Hon’ble Supreme Court, cancelled the penalty levied u/s 271(1)(c) of the Act.
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