Written off of sundry parties may not cause initiation of penalty under sec 271(1)(c) of IT Act

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) of the I.T. Act, 1961 dated 31/01/2006 and the penalty order passed u/s.271(1)(c) of the I.T.Act, 1961 dated 31/03/2008 were that the addition in respect of write off of Rs.44,89,898/- was made pertaining to sundry parties and that was the reason for initiation of penalty proceedings. That disallowance in quantum proceeding was challenged before the Tribunal and Respected Co-ordinate Bench “C” ITAT Ahmedabad vide ITA No.798/Ahd/2007 for A.Y. 2003-04 titled as “Ashima Dyecot Ltd. Ahmedabad vs. Asst.CIT, Ahmedabad” vide order dated 06/11/2009 has restored the matter to the file of the Assessing Officer with certain directions; relevant paragraph No.4 is reproduced below:- “4. We have carefully gone through the orders of authorities below and perused the material available on record. It is pertinent to note that in para 3.1 of the impugned order, the Learned Commissioner of Income Tax (Appeals) noted the aforesaid plea of the assessee but has not adjudicated the same. In these circumstances, we find considerable force in the submission of the ld.D.R. We accordingly set aside the impugned order of Learned Commissioner of Income Tax (Appeals) and restore the same to the file of A.O. with the direction that the Learned Commissioner of Income Tax (Appeals) will re-adjudicate the appeal of the assessee afresh including the plea raised before him which is noted in para 3.1 & 3.2 of the impugned order after giving opportunity of being heard to both the sides.”

Citation :
Ashima Dyecot Ltd.(Formerly known as Ashima Dyecot Pvt .Ltd. )Texcellance Complex Khokhra Mehmedabad Ahmedabad – 380 021 (Appellant)Vs.The DCIT Circle-1 Ahmedabad PAN/GIR No:AACCA 2753 K (Respondent)