Kerala HC Orders Revise Tax Penalty, An Order Departed Without Changing Penalty Proceedings

Since a fresh assessment order was passed without amending the penalty proceedings, the Kerala High Court rendered to amend the penalty levied under the Income Tax Act 1961. The assessment orders have been amended by the income tax appellate tribunal and remanded the case to the assessing officer vide order for issuing a fresh assessment order.

Concerning the assessment years 2008-09 to 2014-15 the assessment orders were passed dated 31.03.2016 and for the penalty proceedings a show cause notice was issued under Section 271(1)(c) for the assessment years 2008-09 to 2013-14 and for the assessment year 2014-15, notice under Section 271AAB was issued.

The assessment order for the years 2008-09 to 2014-15 was issued on March 31, 2016. Notices were given for potential penalties under Section 271(1)(c) for the years 2008-09 to 2013-14, and for the year 2014-15, a notice under Section 271AAB was issued.

The applicant furnishes a petition against the mentioned assessment order to the CIT(A). At the time of the pendency of the petition before the CIT(A) The penalty proceedings were temporarily halted. The Commissioner of Income Tax (Appeals), through a collective decision, rejected the appeals, upholding the original assessment orders.

The penalty proceedings were revived as the petition was dismissed and the applicant was issued with the notices. The petitioner appealed to the Income Tax Appellate Tribunal, which revised the assessment orders and sent the matter back to the Assessing Officer(AO) with instructions to issue a new assessment order.

The petitioner’s representative argued that following a remand, a new assessment order could be issued, allowing for a revision of penalty orders based on these fresh assessments.

Justice Dinesh Kumar Singh, presiding over a single judge bench, resolved the ongoing writ petition by instructing the respondent to reconsider the penalty orders in light of the newly revised assessment orders for the years 2008-09 to 2014-15, post-remand.

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The court emphasized that the petitioner must be given a chance for a hearing, as stipulated under Section 75(1)A before any revisions to the penalty orders are made.