ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(1), SURYAPET vs. GORUGANTI DAMODAR RAO, HYDERABAD

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ITA 1078/HYD/2017Status: DisposedITAT Hyderabad23 June 2021AY 2009-103 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the penalty proceedings were rendered non-est because the underlying assessment order itself was quashed by the CIT(A) for want of a valid satisfaction note. Therefore, the penalty could not survive.

What were the facts?

The Revenue appealed against the deletion of a penalty imposed under Section 271(1)(c) of the Income Tax Act. This penalty stemmed from an assessment framed under Section 143(3) read with Section 153C.

What were the issues?

Whether a penalty under Section 271(1)(c) can be sustained when the assessment order on which it is based has been quashed. The validity of the satisfaction note for initiating proceedings under Section 153C.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3),Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” : HYDERABAD

Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU

O R D E R PER S.S.GODARA, J.M. : This Revenue’s appeal for AY.2009-10 arises from the CIT(A)-11, Hyderabad’s order dated 27-02-2017 passed in case No.091/DCIT CC-3(1)/CIT(A)-11, Hyd/15-16, in proceedings u/s.271(1)(c) of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.

2.

Coming to the Revenue’s sole substantive grievance raised in the instant appeal that the CIT(A) has erred in law and on facts in deleting Section 271(1)(c) penalty of Rs.7,77,58,046/- culminating from Section 143(3) r.w.s.153C assessment framed on 31-12-2011, we notice at the outset that the same has no legs to stand as on date in view of the CIT(A)-12, Hyderabad’s order dt.29-03-2021 passed in appeal No.10151/2019-20 quashing the assessment itself for want of a valid satisfaction note from the Assessing Officer’s end. This clinching development has gone un-rebutted from the departmental side.

3.

Faced with this situation, we hold that the impugned penalty proceedings stand rendered as non-est as a necessary corollary to the CIT(A)’s quantum order. The Revenue’s instant sole substantive ground is declined at the threshold itself for this precise reason alone. Ordered accordingly.

4.

The Revenue’s appeal is dismissed in above terms.

Order pronounced in the open court on 23rd June, 2021

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