KALNA II CADP FARMERS SERVICE CO-OP. SOCIETY LTD.,KOLKATA vs. I.T.O., WARD - 1(2), BURDWAN, BURDWAN

The ld. Counsel for the assessee has placed on record a paper book containing 44 pages. He pleaded that the addition on which this penalty has been computed, has been deleted by the ld. 1st Appellate Authority on the quantum appeal. Copy of the ld. CIT(Appeals)’s order dated 14.07.2020 passed on the assessment order dated 24.12.2018 passed under section 143(3) is available on pages no. 6 to 14 of the paper book.

The ld. D.R., on the other hand, was unable to controvert this fact.

On due consideration of the above facts, we are of the view that sub-clause (iii) of section 271(1)(c) provides a mechanism for computation of penalty. The penalty is to be computed on the basis of the addition made to the income of the assessee disclosed in the return filed under section 139(1). The penalty could be either equivalent to the taxes sought to be evaded by the assessee or maximum to the extent 300 times. Since the very 2 A.Y. 2016-2017 Kalna II CADP Farmers Service Co-op. Society Limited foundation to compute the penalty is no more available after the decision of the ld. CIT(Appeals) on the assessment order, therefore, no penalty could be imposed upon the assessee. Accordingly, we allow this appeal of the assessee and delete the penalty.

In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on April 27, 2023.