$ * IN HIGH COURT OF DELHI AT NEW DELHI 38. + ITA 14/2002 COMMISSIONER OF INCOME TAX DELHI ..... Appellant Through Mr Rohit Madan, Zoheb Hussain and Mr Akash Vajpai, Advocates. versus M/S AMFAB CHEMICALS PVT. LTD. ..... Respondent Through Mr V.P. Gupta, Advocate with MrAnunav Kumar, Advocate for Applicant. CORAM: DR. JUSTICE S.MURALIDHAR MR. JUSTICE VIBHU BAKHRU ORDER % 19.10.2015 CM 23648/2015 1. This is application by Assessee/Respondent seeking clarification of judgment dated 4th August, 2015 by which this Court had answered question framed in ITA No. 14 of 2002 in favour of Revenue and against Assessee and held that Income Tax Appellate Tribunal ( ITAT ) was in error in holding that penalty under Section 271 (1)( c) of Income Tax Act, 1961 should be deleted only because assessment had resulted in nil income. 2. In present application, it is pointed out that order of ITAT adverted to not only technical ground on which penalty was not leviable but also on merits. On examination of order of ITAT dated 26 th July, 2001, it is seen that ITAT has observed that no effort was made by CIT (A) to ascertain whether there was in fact any concealment of income and whether, therefore, on merits penalty was leviable. Court further notes that ITA 14/2002 Page 1 of 3 CIT (A) in order dated 26th February, 1996 noticed that Assessee had not responded to show cause notice issued to it by Assessing Officer (AO) prior to imposition of penalty. 3. Nevertheless, it is pointed out by Mr. V.P. Gupta, learned counsel for Assessee, that there was sufficient material on record, even in quantum proceedings, which could have been pointed out by Assessee in event question regarding penalty was examined on merits. He, accordingly, submits that order dated 4th August 2015 of this Court should not be construed to have decided issue on merits and matter should be sent back to CIT (A) for that purpose. 4. Mr. Rohit Madan, learned counsel for Revenue, drew attention of this Court to order of CIT (A) regarding failure of Assessee to lead evidence even during course of assessment proceedings which led CIT (A) to observe that AO was not at fault in coming to conclusion that Assessee had furnished inaccurate particulars of its income. 5. This Court, in its judgment dated 4th August 2015, only dealt with issue whether penalty could have been set aside by ITAT only on ground that assessment was finalized at nil income. Having answered that question in favour of Revenue, Court was not required to consider whether on merits penalty could be levied. To that extent, learned counsel for Assessee is right in his contention that said issue ought to be examined by CIT (A). ITA 14/2002 Page 2 of 3 6. Consequently, in modification of order dated 4 th August, 2015 this Court further directs that matter concerning penalty, if any, leviable on Assessee, will be examined de novo by CIT(A) on basis of materials available on record and after hearing parties. It is clarified that nothing stated by this Court in this order or in order dated 4th August, 2015 should be construed as expression of opinion on merits of case as far as issue of penalty is concerned. 7. application is disposed of. S.MURALIDHAR, J VIBHU BAKHRU, J OCTOBER 19, 2015 pkv ITA 14/2002 Page 3 of 3 COMMISSIONER OF INCOME TAX DELHI v. M/S AMFAB CHEMICALS PVT. LTD