MADHYA BHARAT INTERNATIONAL PVT LTD,INDORE V. NFAC NEW DELHI, NEW DELHI

ITA 642/IND/2024

AI Insights

The case involves Madhya Bharat International Pvt. Ltd., which appealed against the penalty imposed by the National Faceless Assessment Centre (NFAC), New Delhi, under section 271(1)(c) of the Income-tax Act, 1961, for the assessment year 2016-17. The penalty was related to an addition of Rs. 1,33,00,000 made to the assessee's income under section 56(2)(viib) concerning share application money. Initially, the AO completed the assessment and imposed the penalty, which was contested by the assessee. The CIT(A) set aside the assessment order and remanded it back to the AO for a de novo assessment. The Tribunal, acknowledging the CIT(A)'s decision, remanded the penalty matter back to the AO to be adjudicated afresh following the new assessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712562 (ITAT-INDORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIASHISHPORWALSR
• Assessee Lawyers: FORAY; SHREYA JAIN
• Keywords: Set aside
• Section: 147; 144; 271(1)(c)

Judgement Text

"अपीलीयअिधकरण, इȽौरɊायपीठ, इȽौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER ITA No. 642/Ind/2024 Assessment Year: 2016-17 Madhya Bharat International Pvt. Ltd., 630, Usha Nagar Extension Indore बनाम/ Vs. NFAC New Delhi, New Delhi (Appellant / Assessee) (Revenue / Respondent) P.A. No. AADCM8494Q Assessee by Ms. Shreya Jain, AR Revenue by Shri Ashish Porwal Sr. DR Date of Hearing: 24.07.2025 Date of Pronouncement: 28.07.2025 आदेश/ O R D E R Per B.M. Biyani, AM: Feeling aggrieved by order of first-appeal dated 16.07.2024 passed by learned CIT(A), NFAC, Delhi [“CIT(A)”], which in turn arises out of penalty-order dated 22.01.2022 passed by the learned National Faceless Assessment Centre, Delhi [“AO”] u/s 271(1)(c) of the Income-tax Act, 1961 [“the Act”] for assessment-year [“AY”] 2016-17, the assessee has filed this appeal on the grounds as mentioned in Appeal-Memo (Form No. 36). Printed from counselvise.com Madhya Bharat International Pvt. Ltd. ITA No.642/Ind/2024 Assessment Year 2016-17 2 2. Heard the learned Representatives of both sides and case-record perused. 3. Ld. AR for assessee briefly summarized the facts of case like this : For AY 2016-17 under consideration, the assessment of assessee was completed by Ld. AO u/s 147 r.w.s. 144 vide assessment-order dated 24.09.2021 after making an addition of Rs. 1,33,00,000/- u/s 56(2)(viib) in respect of share application money. Thereafter, vide penalty-order dated 22.01.2022, the Ld. AO also imposed penalty of Rs. 43,97,379/- u/s 271(1)(c) qua the addition of Rs. 1,33,00,000/- made in assessment-order. Against aforesaid assessment-order, the assessee filed appeal before CIT(A) and the CIT(A) has already decided assessee’s appeal vide order dated 25.10.2024, a copy of the order is placed on record. Drawing our attention to Para No. 5.5 & 6 of this order of CIT(A), Ld. AR demonstrated that the CIT(A) has set aside the aforesaid assessment-order dated 24.09.2021 and remanded case back to AO for a fresh assessment on de novo basis. Ld. AR’s limited prayer in this situation is such that when the assessment-order stands set aside to the file of AO for a fresh adjudication, the penalty-order imposing penalty u/s 271(1)(c) qua the addition made in assessment-order, should also be restored at the level of AO for a fresh adjudication based on outcome of fresh assessment-order. 4. Ld. DR fairly agreed to the submission and prayer of Ld. AR. 5. In view of the above facts and submissions of parties, we remand this penalty-matter to the file of AO for a fresh adjudication on the basis of outcome Printed from counselvise.com Madhya Bharat International Pvt. Ltd. ITA No.642/Ind/2024 Assessment Year 2016-17 3 of fresh assessment-order. Needless to mention that before finalizing penalty- matter, the AO shall give a fresh opportunity to assessee and consider assessee’s submissions. 6. In the result the appeal of assessee is allowed for statistical purpose. Order pronounced in open court on 15/07/2025 Sd/- (PARESH M. JOSHI) Sd/- (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore; िदनांकDated : 15/07/2025 Patel/Sr. PS Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Sr. Private Secretary, Indore Printed from counselvise.com "