SAGA DEVELOPERS PVT. LTD.,NEW DELHI vs. DCIT, NEW DELHI

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ITA 3564/DEL/2017Status: DisposedITAT Delhi05 August 2022AY 2006-074 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 addition on which the penalty was levied was deleted by the CIT(A), the penalty itself does not survive. Therefore, the penalty is to be deleted.

What were the facts?

A search operation led to a notice under section 153A. The Assessing Officer made an addition of Rs. 1,51,71,623 and levied a penalty under section 271(1)(c). The CIT(A) deleted the penalty.

What were the issues?

Whether penalty under section 271(1)(c) can be sustained when the underlying addition has been deleted. The appeal was filed by the Revenue against the deletion of penalty by the CIT(A).

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3),Section 35D,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI

Before: SH. ANIL CHATURVEDI & SH. ANUBHAV SHARMA

For Appellant: Shri M. P. Rastogi, Adv
For Respondent: Shri Abhishek Kumar, Sr. D.R
Hearing: 26.07.2022Pronounced: 05.08.2022

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH. ANUBHAV SHARMA, JUDICIAL MEMBER (Assessment Year : 2006-07) Saga Developers Pvt. Ltd. Vs. DCIT B-67, Sarita Vihar, Central Circle – 19 New Delhi – 76 New Delhi - 55 PAN No. AAJCS 4932 K (APPELLANT) (RESPONDENT) Assessee by Shri M. P. Rastogi, Adv. Revenue by Shri Abhishek Kumar, Sr. D.R. Date of hearing: 26.07.2022 Date of Pronouncement: 05.08.2022 ORDER PER ANIL CHATURVEDI, AM :

The present appeal filed by the Assessee is directed against the order dated 30.03.2017 of the Commissioner of Income Tax (Appeals)-27, New Delhi relating to Assessment Year 2006-07.

2.

The relevant facts as culled from the material on records are as under :

3.

The assessee is a Private Ltd. A search and seizure operation u/s 132 of the Act was conducted by Investigation Wing of the 2 Department on 29.01.2009 in the Case of M/s. SAAMAG GROUP of cases. Thereafter, notice u/s 153A of the Act was issued, in response to which return was filed on 10.02.2010 for A.Y. 2006- 07 declaring an income of Rs.22,81,180/-. Several notices was issued and in response to various statutory notices, Counsel of the assessee furnished necessary details, information and documents called for time to time. Thereafter assessment was framed u/s 153A/143(3) of the Act vide order dated 03.08.2011 after making addition of Rs.1,51,71,623/-. On the aforesaid addition of Rs.1,51,71,623/- that was made by AO on such disallowance, AO vide order dated 30.03.2015 levied penalty of Rs.5,66,680/- u/s 271(1)(c) of the Act.

4.

Aggrieved by the penalty order passed by AO, assessee carried the matter before CIT(A). CIT(A) vide order dated 30.03.2017 in Appeal No.75/15-16 granted partial relief to the assessee wherein penalty levied u/s 271(1)(c) of Rs. 5,66,680/- was deleted. Aggrieved by the order of CIT(A), Revenue is now in appeal and has raised the following grounds:

1. “The order passed u/s 271(1)(c) of the Act is barred by limitation & is void.

2. It is contended that the appellant has neither furnished inaccurate particulars of income nor concealed the particulars of it’s income within the meaning of section 271(1)(c) of the Act.

3. The lower authorities have erred in levying/confirming the penalty u/s 271(1)(c) of the Act, as the AO has not given a clear/specific finding whether the assessee has concealed the particulars of income OR has furnished inaccurate particulars of income. In the absence of specific charge, the provisions of section 271(1)(c) of the Act are not applicable.

3 4. That the above grounds of appeal are independent and without prejudice to one another. The appellant craves leave to add, alter, amend or withdraw any of the grounds of appeal at the time of hearing.”

5. Before us, at the outset, Learned AR submitted that in the present case the penalty u/s 271(1)(c) of the Act was levied by the AO on the addition of Rs.1,51,71,623/- made on account of disallowances u/s 35D of the Act. He submitted that against the aforesaid quantum addition made by the AO, assessee had carried the matter before CIT(A) who vide order dated 30.03.2017 in Appeal No.75/15-16 had deleted the addition made by AO. He pointed to the copy of the relevant order. He thereafter submitted that since the addition itself has been deleted, the penalty on such addition does not survive. He therefore submitted that penalty levied by the AO and confirmed by CIT(A) be deleted.

6.

Learned DR on the other hand did not controvert the submissions made by Learned AR but supported the order of lower authorities.

7.

We have heard the rival submissions and perused the material available on record. The issue in the present ground is with respect to the levy of penalty u/s 271(1)(c) of the Act on the addition of Rs.1,51,71,623/- made on account of disallowance u/s 35D of the Act. We find that the aforesaid addition has been deleted by CIT(A) vide order dated 30.03.2017 and the aforesaid order of CIT(A) has attained finality. In such circumstances when

4 the quantum itself has been deleted, the penalty u/s 271(1)(c) of the Act on such addition does not survive. We therefore direct deletion of penalty u/s 271(1)(c) of the Act. Thus the ground of assessee is allowed.

8.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 05.08.2022

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