ASSISSTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, SAMBALPUR, SAMBALPUR vs. DIPTI RANJAN PATNAIK, ROURKELA

The solitary issue raised by the revenue in the present appeal is with regard to deletion of penalty levied u/s.271(1)(c) of the Act of Rs.7,14,45,818/- by the ld. CIT(A).

Before us, during the course of hearing, the ld. CIT-DR fairly admitted that the issue involved in the quantum appeal on which present penalty is levied, has already been deleted by the ld. CIT(A) and such order has been confirmed by this Bench in vide order dated 17.10.2023 whereby dismissing the appeal of the revenue, the Tribunal has observed as under :-

A perusal of the facts in the present case clearly shows that the ld. CIT(A) has taken into consideration the fact that the production of the Iron Ore as disclosed by the assessee in Form 3CD Report and as per the H-1 Form and as per the report submitted to the Central Empowered Committee in the case of Common Cause 9supra) before the Hon’ble Supreme Court were identical and there is no mention of any illegal mining by the assessee. Admittedly, in the demand notice issued by the Deputy Director of Mines in his reported dated 02.09.2017, there is a quantification of excess production but this is not illegal mining. Excess production has also been disclosed by the assessee in its report and in the Form H-1 and as per the demand notice issued by the Director of Mines, the assessee has been asked to pay compensation for the said excess mining as quantified in the report submitted to the Central Empowered Committee (CEC). A perusal of the assessment order also shows that the AO has quantified the mining as done by the assessee at 2,04,834 MT. This figure is adopted out of the Justice M.B.Shah Commission Report. This figure has not been determined by the AO on the basis of any evidence. However, in fact, the subsequent examination for the purpose of the Central Empowered Committee report in the Common Cause (supra), the actual production has been quantified at the same figure as disclosed by the assessee. Thus, it cannot be said that the assessee has undertaken illegal mining. This has also been considered by the ld. CIT(A) while deciding the issue on merits. The findings recorded by the ld.CIT(A) in this regard on merits have also not been dislodged by the revenue. In these circumstances, the findings recorded by the ld. CIT(A) on this issue stands confirmed. 4. On contrary, the ld. AR filed the copies of the order of the Tribunal and, as stated above, supported the order of the ld. CIT(A). 5. We have heard the rival submissions. From the records, it is seen that the penalty u/s.271(1)(c) of the Act has been levied on the additions made of Rs.23,12,16,239/- and since such additions have been deleted by the ld. CIT(A) by his order dated 09.03.2023 in I.T.Appeal No.Sambalpur/10016/2019-2020 and this order of ld. CIT(A) stood confirmed by this Bench in dated 17.10.2023 by dismissing the appeal of the revenue, therefore, there remained no basis for levy of the penalty u/s.271(1)(c) of the Act. In view of these facts, we are of the view that once the addition made in quantum assessment order has been deleted, there remained no issue on which penalty u/s.271(1)(c) of the Act could be levied. Accordingly, the order of the ld. CIT(A) in deleting the penalty imposed u/s.271(1)(c) of the Act, is hereby sustained. 6. In the result, appeal of the revenue is dismissed. Order dictated and pronounced in the open court on 02/05/2024.