KURELE PAN PRODUCTS (P) LTD.,NEW DELHI vs. ACIT, CENTRAL CIRCLE-32, NEW DELHI

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ITA 4888/DEL/2018Status: DisposedITAT Delhi12 December 2022AY 2006-072 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the quantum additions giving rise to the penalty were reversed by a co-ordinate bench, the basis for imposing the penalty no longer existed. Consequently, the penalty order was set aside.

What were the facts?

The assessee challenged a penalty of Rs. 45,36,000 imposed on additions of Rs. 1,50,00,000 towards unexplained share application money. The penalty was levied under Section 271(1)(c) of the Income Tax Act.

What were the issues?

The primary issue was whether the penalty under Section 271(1)(c) could survive when the underlying quantum additions were deleted. The appeal also concerned the validity of penalty proceedings initiated under Section 153A.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 153A,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “C” DELHI

Before: SHRI KUL BHARAT & SHRI PRADIP KUMAR KEDIA

For Appellant: Shri Dharmendra Singh, Adv
For Respondent: Smt. Abha Rani Singh, CIT (DR )

PER PRADIP KUMAR KEDIA, A.M.: The captioned appeal has been filed at the instance of the Assessee against the order of the Commissioner of Income Tax (Appeals)-XXX, New Delhi [‘CIT(A)’ in short] dated 26.02.2018 arising from the assessment order dated 08.02.2013 passed by the Assessing Officer (AO) under Section 153A r.w. Section 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2006-07. 2. The assessee by way of its grounds of appeal

1.

has challenged the action of the CIT(A) sustaining the penalty amounting to Rs.45,36,000/- on the additions amounting to Rs.1,50,00,000/- towards unexplained share application money.

3. When the matter was called for hearing, the ld. counsel for the assessee submitted that the quantum addition giving rise to imposition of penalty has been reversed by the Co-ordinate Bench of Tribunal in quantum proceedings vide order dated 29.03.2019 in (correct ITA 3051/Del/2013) for Assessment Year 2015-16 (correct AY 2006-07). Vide letter dated 14th December, 2022, it was also simultaneously clarified by the ld. counsel for the assessee that the abovementioned ‘quantum appeal and Assessment Year’ concerning Assessment Year 2015- 16 was may be read as ‘ITA No.3051/Del/2013 Assessment Year 2006-07’ instead of Assessment Year 2015-16.

4. In view of the fact that quantum additions/disallowances itself does not survive and has ceased to exist, the very basis for impositions of penalty under Section 271(1)(c) does not survive any more. Consequently, the impugned order of the CIT(A) is set aside and the penalty imposed by the Assessing Officer stands cancelled in tandem with the quantum proceedings.

5.

In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 14/12/2022.

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