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Income Tax Appellate Tribunal, DELHI BENCH, ‘B’: NEW DELHI
Before: SHRI SHAMIM YAHYA & SHRI YOGESH KUMAR US
Date of Hearing 01.09.2022 Date of Pronouncement 06.09.2022 ORDER PER SHAMIM YAHYA, AM,
These are cross appeals by the assessee and Revenue arising out of the order of the Ld. CIT(A)-22, New Delhi, dated 26.12.2017, pertaining to Assessment Year 2007-08.
2. Grounds of appeal raised by the assessee in reads as under:-
“1. That on facts and in law the Commissioner of Income Tax (Appeals) {hereinafter referred to as “CIT(A)”} erred in upholding levy of penalty u/s 271(1)(c) of the Income Tax Act, 1961 in respect to disallowance of depreciation allowance of Rs.7,01,24,122/- made by the Assessing Officer and upheld by CIT(A) during the course of quantum proceedings.
That on facts and in law the penalty order dated 09th March, 2017 passed by Assessing Officer u/s 271(1)(c) of the Act is bad in law and void ab-initio.
3. That on facts and in law the impugned order passed by the CIT(A) (to the extent it is prejudicial to the interest of the appellant) is bad in law and void ab-initio.”
Grounds of appeal raised by the Revenue in reads as under:-
“1.On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the penalty imposed by the Assessing Officer u/s 271(1)(c) of the I.T. Act, 1961 against addition/disallowance of Rs.570,03,36,179/- claimed by the appellant on account of Profit on sale/redemption of investment by the assessee.”
At the outset, in this case, the Ld. Counsel for the assessee submitted that the appeal by the Revenue pertains to the issue of penalty on addition on account of profit on sale/redemption of investment. He further submitted that in the appeal by the assessee grievance is levy of penalty on the addition on account of depreciation. Ld. Counsel for the assessee further submitted that quantum appeal relating to both the issues has now been decided by the ITAT in vide order dated 12.01.2018.
That as regards the issue of addition on account of profit on sale/redemption of investment is concerned the ITAT has allowed the assessee’s appeal on that issue. Hence, he submitted that since the addition no more survives, resultantly, levy of penalty will also fail.
As regards the addition on account of depreciation is concerned, the ld. Counsel for the assessee pointed out that ITAT has set-aside the issue to the file of Assessing Officer for proper verification of details filed by the assessee. In this view of the matter, ld. counsel for the assessee pleaded that the addition on which penalty was levied does not survive. Hence, penalty levied in this regard can also not be sustained.
We have heard both the parties and perused the records. We find ourselves in agreement with the submission of the ld. counsel for the assessee. As regards the appeal by the assessee is concerned, the same is on account of levy of penalty on disallowance of depreciation. Since, the issue in quantum appeal has been set-aside by the ITAT to the file of the Assessing Officer, the ld. counsel for the assessee is correct in pleading that the addition on which penalty was levied does not survive. Hence, this appeal by the assessee stands allowed.
As regards, the Revenue’s appeal is concerned, the same is on account of deletion by the Ld. CIT(A) of the penalty on addition on account of profit on sale/redemption of investment. Since, the ITAT in quantum appeal has deleted the said addition, the penalty levied on this account is liable to be deleted.
In the result, Revenue’s appeal is dismissed and appeal of the assessee is allowed.
Order pronounced in the open court on 06th September, 2022.