AMAR SINGH,. vs. ITO WARD-2, REWARI, .

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ITA 1229/DEL/2025Status: DisposedITAT Delhi20 August 2025AY 2013-144 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty order does not survive and is liable to be quashed. The reasoning was based on the fact that the additions made by the Assessing Officer in the quantum proceedings, which formed the basis for levying the penalty under Section 271(1)(c), had been deleted by a Co-ordinate Bench of the Tribunal in the assessee's appeal for the same assessment year. Since the primary additions were no longer valid, the penalty levied on account of those additions could not be sustained. The Tribunal found that the Co-ordinate Bench had allowed the appeal of the assessee in the quantum proceedings. Therefore, the penalty order was quashed. The ground raised by the assessee was allowed. No issue was expressly left undecided.

What were the facts?

The assessee, an individual farmer, sold ancestral agricultural land for Rs. 5,96,62,500/-. The sale proceeds were used to purchase agricultural land in the names of his sons and wife, and for constructing a residential house. The Assessing Officer (AO) issued a notice under Section 148 after recording reasons. The AO completed the assessment under Section 143(3) for Assessment Year 2013-14, determining Long-Term Capital Gain (LTCG) of Rs. 3,59,20,152/- and initiated penalty proceedings under Section 271(1)(c). The AO levied a penalty of Rs. 73,48,050/- on the ground that the assessee had concealed income. The assessee appealed to the National Faceless Appeal Centre/CIT(A), who dismissed the appeal. The assessee then filed this appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the penalty levied by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961, amounting to Rs. 73,48,050/-, is sustainable in law, given that the additions made by the Assessing Officer in the quantum proceedings were deleted by the Income Tax Appellate Tribunal? (Question of law and fact, turning on Section 271(1)(c) and the effect of deletion of additions in quantum appeal). Assessee's contention: The penalty order is bad in law because the additions made by the Assessing Officer, which formed the basis for the penalty, were subsequently deleted by a Co-ordinate Bench of the Tribunal in the quantum appeal (ITA No.115/Del/2019). Revenue's contention: The Senior Departmental Representative (Sr. DR) fairly conceded the fact that the additions in the quantum proceedings were deleted by the Tribunal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 148,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: SH. S. RIFAUR RAHMAN & SH. SUDHIR KUMAR

Hearing: 14/08/2025Pronounced: 20/08/2025

Date of hearing: 14/08/2025 Date of Pronouncement: 20/08/2025 ORDER

PER SUDHIR KUMAR, JM:

1.

This appeal by the assessee is directed against the order of National Faceless Appeal Centre/ Commissioner of Income Tax (Appeals), Delhi, [hereinafter referred to as “CIT(A)”], vide order dated 10.02.2025 pertaining to A.Y. 2013-14 and arises out of the penalty order dated 20-03-2020 passed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961 [hereinafter referred as ‘the Act’].

2.

The assessee has raised the following grounds of appeal :-

1. That the Ld. CIT(A),NFAC Delhi has grossly erred in law as well as on facts in sustaining the penalty levied by Ld. AO u/s 271(1) (c) of the Act amounting to Rs. 7348050/-.

2. That the appellant craves leave to add, alter, amend or withdraw all or any grounds herein or add any further grounds as may be considered necessary either before of during the hearing of these grounds.

3. The brief facts of the case are that the assessee is an individual and farmer by profession. For the year in concern the assessee sold agriculture land which was ancestral property and utilized the sale proceeds for purchasing of agriculture land in the name of his two sons and his wife and construction of a residential house. Notice u/s 148 of the Act was issued by ITO Rewari on 26-03-2014 after recording reasons that the assessee has sold immovable property valued at Rs.5,96,62,500/-. The Assessing officer completed the assessment u/s.143(3) of the Act determining the income of Rs. 3,59,20,152/-on account of Long- Term Capital Gain and penalty proceedings u/s 271(1)(c) of the Act, was also initiated. After considering the submission made by the assessee the Assessing officer held that the assessee was having an income of Rs. 3,59,01,562/- during the year from under the head Long- Term Gain and assessee has

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