ITAT Delhi Remands Penalty Dispute to CIT(A) Awaiting Disposal of Quantum Appeal in ACIT Vs Basti Sugar Mills Co. Ltd.

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, recently addressed a procedural anomaly regarding the adjudication of penalty proceedings while the foundational assessment dispute remains unresolved. In the matter of ACIT Vs Basti Sugar Mills Co. Ltd., the Tribunal underscored the intrinsic link between quantum additions and subsequent penalties, ultimately remanding the penalty issue back to the first appellate authority.

Background of the Dispute

The legal controversy stems from the Assessment Year 2003-04. The Revenue department approached the ITAT, expressing grievance against an order passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC).