ITO, WARD-1, PALGHAR vs. SUNIL SHAMLAL MISHRA, PALGHAR

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ITA 1111/MUM/2023Status: DisposedITAT Mumbai28 June 2023AY 2012-133 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 since the addition on which the penalty was levied has been deleted, the penalty cannot survive on its own. Therefore, the cancellation of the penalty by the CIT(A) was upheld.

What were the facts?

The Assessing Officer made an addition for Long Term Capital Gains and levied penalty under Section 271(1)(c). The addition was subsequently deleted by the ITAT. The Revenue appealed the deletion of the penalty, arguing they had appealed the quantum addition deletion to the High Court.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the primary addition on which it was levied has been deleted.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI

Before: SHRI B.R. BASKARAN & SHRI RAHUL CHAUDHARY

For Appellant: Shri Paresh Deshpande
For Respondent: Shri Anil Sathe
Hearing: 28/06/2023Pronounced: 28/06/2023

PER B.R. BASKARAN, ACCOUNTANT MEMBER :

1.

The Revenue has filed this appeal challenging the order dated 03.02.2023 passed by the learned Commissioner of Income Tax (Appeals) (NFAC), Delhi (in short ‘Ld. CIT(A)’) and it relates to the Assessment Year 2012-13. The Revenue is aggrieved by the decision of Ld. CIT(A) in deleting the penalty levied by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961 (in short ‘the Act’).

2.

We heard the parties and perused the record. The assessee is engaged in the business of trading in grass. In the assessment proceedings, the Assessing Officer made addition towards Long Term Capital Gains of Rs.6.50 crores. The Assessing Officer also levied penalty under Section 271(1)(c) of the Act on the above said addition. In the meantime, the assessee challenged the addition made by the Assessing Officer in the quantum proceedings before the Ld. CIT(A) and then before the ITAT and the Tribunal, vide its order dated 28.02.2020 passed in deleted the addition made by the Assessing Officer in the quantum proceedings.

3.

The assessee also challenged the penalty levied by the Assessing Officer under Section 271(1)(c) of the Act by filing appeal before the Ld. CIT(A). It was brought to the notice of the Ld. CIT(A) that the addition on which penalty was levied has since been deleted by the Tribunal. Accordingly, the Ld. CIT(A) held that the penalty cannot stand by itself and accordingly, he cancelled the penalty. The Revenue has filed this appeal challenging the above said order of the Ld. CIT(A) contending that the decision rendered by the Tribunal in the quantum proceedings has been challenged by it in an appeal before the Hon’ble Bombay High Court.

4.

It is an admitted fact that the addition towards Long Term Capital Gains has since been deleted by the Tribunal, vide its order referred to supra. The impugned penalty has been levied by the Assessing Officer on the above said addition only. Since the addition itself has been deleted, the Ld. CIT(A) has correctly held that the impugned penalty order shall not survive

Sunil Shamlal Mishra and accordingly cancelled the penalty. Since the order so passed by the Ld. CIT(A) is in accordance with law, we do not find any reason to interfere with his order. Accordingly, we confirm the order passed by Ld CIT(A).

5.

In the result, appeal filed by the Revenue is dismissed.

Order pronounced in the open court on 28th June, 2023.

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