Loading judgment…
Facts
The assessee, Liberty Marketing Co., filed an appeal against the order of the CIT(A) which had confirmed the penalty levied under section 271(1)(c) of the Income-tax Act, 1961. The original assessment order was passed under section 144.
Held
The Tribunal noted that the addition on account of unverified sundry creditors, which formed the basis for the penalty, was deleted in the quantum proceedings. Therefore, the concealment penalty on the deleted addition cannot stand.
Key Issues
Whether the penalty levied under section 271(1)(c) was justified when the addition on which it was based was deleted?
Sections Cited
271(1)(c), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI
Before: SHRI M. BALAGANESH & SHRI YOGESH KUMAR U.S.
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in AY 2008-09, arises out of the order of the ld. Commissioner of Income Tax (Appeals)-11, New Delhi [hereinafter referred to as ‘ld. CIT’, in short] dated 27.08.2020 against the order of assessment passed u/s 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 28.03.2016 by the Assessing Officer, ITO, Ward-32(5), New Delhi (hereinafter referred to as ‘ld. AO’).
The only effective issue to be decided in this appeal is as to whether the ld CIT(A) was justified in confirming the levy of penalty u/s 271(1)(c) of the Act in the facts and circumstances of the instant case.
We have heard the rival submissions and perused the material available on record. At the outset, the ld AR placed on record the copy of the order of the ld CIT(A) in IT Appeal No. 458/16-17 dated 27.08.2020 passed in the quantum proceedings wherein, the addition on account of unverified sundry creditors of Rs. 80,40,161/- was deleted. Since, the quantum addition has been deleted, the concealment penalty on the same would have no legs to stand. Hence, the penalty levied u/s 271(1)(c) of the Act is hereby deleted.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 30/07/2025.