M/S ABACUS EDUTECH PVT. LTD.,LUDHIANA vs. CIT(A)-3, LUHIANA

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ITA 1032/CHANDI/2019Status: DisposedITAT Chandigarh11 May 2021AY 2010-113 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 since the assessment order, which formed the basis for levying the penalty, had been set aside by a previous ITAT order, the penalty could not survive. Therefore, the penalties were liable to be deleted.

What were the facts?

The assessees appealed against penalty orders under Section 271(1)(c) for AY 2010-11. The basis for these penalties was the assessment order passed by the AO.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the assessment order, on which it is based, has been set aside.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Heard together (2 matters)

ITA No. 1032/Chd/2019
ITA No. 1033/Chd/2019

Read from the judgment's own cause title. This page is filed under one of them.

Cause title — parties, addresses and appearances
आयकर अपील"य अ"धकरण,च"डीगढ़ "यायपीठ “एकल सद"यीय’,च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH‘SMC’ CHANDIGARH "ीमती "दवा "संह, "या"यक सद"य BEFORE: SMT. DIVA SINGH, JM आयकर अपील सं./ ITA No. 1032/Chd/2019 "नधा"रण वष" / Assessment Year : 2010-11 M/s Abacus Edutech (P) Ltd., बनाम The Commissioner of Income Tax 276, Maya Nagar, Ludhiana. (Appeals)-3, Ludhiana. "थायी लेखा सं./PAN NO: AAACQ 0843 N अपीलाथ"/Appellant ""यथ"/Respondent आयकर अपील सं./ ITA No. 1033/Chd/2019 "नधा"रण वष" / Assessment Year : 2010-11 M/s Axis Education Technologies The Commissioner of Income Tax बनाम (P) Ltd., (Appeals)-3, 276, Maya Nagar, Ludhiana. Ludhiana. "थायी लेखा सं./PAN NO: AAECA 2568 G अपीलाथ"/Appellant ""यथ"/Respondent "नधा"रती क" ओर से/Assessee by : Shri Ashwani Kumar, CA राज"व क" ओर से/ Revenue by : Smt. Meenakshi Vohra, Addl.CIT सुनवाई क" तार"ख/Date of Hearing : 05/05/2021 उदघोषणा क" तार"ख/Date of Pronouncement : 11/05/2021 Hearing conducted via Webex

आदेश/Order PER: DIVA SINGH, JUDICIAL MEMBER

These two appeals filed by different Assessees against separate orders

dated 28/05/2019 of Ld. CIT(A)-3, Ludhiana for the A.Y. 2010-11are being decided by a common order for the sake of convenience.

2.

In both the appeals, the only grievance of the respective assessees is the action of the ld. CIT(A) in sustaining the respective penalty orders passed by M/s Abacus Edutech (P) Ltd. Vs CIT(A) & 1 Anr. the A.O. U/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as,

the Act).

3.

During the course of hearing, the ld. Counsel for the assessee at the very

outset stated that the assessment order on the basis of which the impugned

penalty was levied, had been set aside by this Bench of the ITAT in ITA No. 548 &

549/Chd/2019 for the A.Y. 2010-11 vide order dated 22/04/2021 in assessee’s

own case. Copy of the said order was furnished which is placed on record.

4.

The ld. Sr.DR, although supported the order of the authorities below but could not controvert the aforesaid contention of the ld. Counsel for the assessee.

5.

I have considered the submissions of both the parties and perused the material available on record. In the present case, it is noticed that the assessment order dated 11/03/2016 passed by the A.O. U/s 143(3) of the Act in the case of both the assesses which were the very basis for levying penalty U/s 271(1)(c) has been quashed vide the aforesaid common order dated

22/04/2021 in ITA No. 548 & 549/Chd/2019 (supra), therefore, the addition on the basis of which the impugned penalties U/s 271(1)(c) of the Act were levied by the A.O. and sustained by the ld. CIT(A), are not in existence. In view thereof,

the impugned penalties levied by the A.O. and sustained by the ld. CIT(A)

deserve to be deleted. Support is drawn from the decision of the Hon'ble Apex M/s Abacus Edutech (P) Ltd. Vs CIT(A) & 1 Anr. wherein on a similar issue the Court was pleased to hold:

“Where the additions made in the assessment order on the basis of which penalty for concealment is levied, are deleted, there remains no basis at all for levying penalty for concealment and, therefore, in such a case no penalty can survive and the penalty is liable to be cancelled. Ordinarily, penalty cannot stand if the assessment itself is set aside.”

6.

In the present cases, the basis for levying the penalties U/s 271(1)(c) are not in existence, as the assessment itself is set aside, I, therefore, by following the ratio laid down by the Hon'ble Apex Court in the aforesaid case, allow the appeals of the assessees by quashing the impugned penalties U/s 271(1)(c) of the Act levied by the A.O. and sustained by the ld. CIT(A).

7.

In the result, both these appeals of the assessees are allowed.

(Order pronounced in the open Court on 11/05/2021) ("दवा "संह) (DIVA SINGH) "या"यक सद"य/Judicial Member Date: 11/05/2021 *Ranjan आदेश क" ""त"ल"प अ"े"षत/ Copy of the order forwarded to : 1. अपीलाथ"/ The Appellant

2.

""यथ"/ The Respondent 3. आयकर आयु"त/ CIT 4. आयकर आयु"त (अपील)/ The CIT(A)

5.

"वभागीय ""त"न"ध, आयकर अपील"य आ"धकरण, च"डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड" फाईल/ Guard File

आदेशानुसार/ By order,

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