THE SOUTH EASTERN COAL FIELDS LTD., BILASPUR,BILASPUR(CG) vs. THE DY. COMMISSIONER OF INCOME TAX,CIRCLE, 1(1)BILASPUR, BILASPUR(CG)

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ITA 160/BIL/2017Status: DisposedITAT Raipur29 July 2021AY 2007-083 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty cannot be sustained as the re-assessment order, which formed the basis for the penalty, was quashed. Consequently, the penalty order and the CIT(A)'s order are set aside.

What were the facts?

The assessee's appeal concerns a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, arising from a disallowance of leave encashment provision. This disallowance was based on a re-assessment order.

What were the issues?

The primary issue was whether a penalty under Section 271(1)(c) could be imposed when the underlying re-assessment order was found to be vitiated and quashed.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “RAIPUR” BENCH, RAIPUR

Before: SHRI PRADIP KUMAR KEDIA & SHRI N. K. CHOUDHRY

For Respondent: Shri R. K. Singh, CIT.DR

सुनवाई क� तार�ख / Date of 28/07/2021 Hearing घोषणा क� तार�ख /Date of 29/07/2021 Pronouncement आदेश/O R D E R PER PRADIP KUMAR KEDIA - AM:

The captioned appeal has been filed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals), Bilaspur (‘CIT(A)’ in short), dated 28.12.2016 arising in the penalty order dated 30.01.2015 passed by the Assessing Officer (AO) under s. 271(1)(c) of the Income Tax Act, 1961 (the Act) concerning AY 2007-08. (SECL vs. DCIT) A.Y. 2007 -08 - 2 -

2.

The appeal concerns imposition of penalty under s.271(1)(c) of the Act on disallowance of provision of leave encashment having its genesis in re-assessment order dated 25.02.2014 passed under s.143(3) r.w.s. 147 of the Act. Re-assessment notice issued for the concerned A.Y. 2007-08 was found to be vitiated in law and thus nonest and consequent re-assessment order was thus quashed by the Tribunal vide order dated 29.07.2021 in in the case of the assessee.

3.

As the edifice for imposition of penalty itself is shaken to its root owing to quashing of the re-assessment order, the very basis for imposition of penalty ceases to exist. The penalty under s.271(1)(c) of the Act cannot be sustained on additions/disallowances resulting from a nonest re-assessment order. The order dated 28.12.2016 passed by the CIT(A) appealed against, is therefore set aside and the penalty order of the AO under s.271(1)(c) of the Act dated 30.01.2015 is cancelled.

4.

In the result, appeal of the assessee is allowed.

This Order pronounced in Open Court on 29/07/2021 Sd/- Sd/- (N. K. CHOUDHRY) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Raipur: Dated 29/07/2021 True Copy S. K. SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, रायपुर / DR, ITAT, RAIPUR (SECL vs. DCIT) A.Y. 2007 -08 - 3 - 6. गाड� फाइल / Guard file. By order,

Sr. Private Secretary ITAT, Raipur (on Tour)

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