ACIT,CC-25, NEW DELHI vs. PP JEWELLERS, NEW DELHI

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ITA 1976/DEL/2019Status: DisposedITAT Delhi22 June 2022AY 2013-145 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to delete the penalty. It agreed that since the assessment order was set aside, the penalty levied based on it would not survive.

What were the facts?

The Revenue appealed against the deletion of penalty under Section 271(1)(c) by the CIT(A). The CIT(A) had deleted the penalty because the original assessment order, on which the penalty was based, had been set aside by the ITAT and remitted back to the AO for fresh assessment.

What were the issues?

Whether a penalty levied under Section 271(1)(c) can survive when the underlying assessment order has been set aside by a higher authority.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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

Before: SH. ANIL CHATURVEDI & SH. NARENDER KUMAR CHOUDHARY

For Respondent: Shri T. Kipgen, CIT-D.R
Hearing: 22.06.2022Pronounced: 22.06.2022

This appeal filed by the Revenue is directed against the order dated 19.12.2018 of the Commissioner of Income Tax (Appeals)-29, New Delhi relating to Assessment Year 2013-14.

2.

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

3. Assessee is a firm which is stated to be engaged in export of jewellery. The revenue is aggrieved by deletion of penalty u/s 271(1)(c) of the Act. AO had levied penalty u/s 271(1)(c) of the Act of Rs.3,13,71,354/- on the enhancement of addition on account of net profit and interest income to the extent of Rs.9,66,90,873/- made by CIT(A). Aggrieved by the penalty order passed by AO, assessee had carried the matter before CIT(A) who vide order dated 19.12.2018 in Appeal No.16/2018-19/CIT(A)-29 had deleted the penalty by observing as under: “4. There is only one issue involved in all the grounds of appeal which relates to contention of the appellant against levy of penalty u/s 271(1)(c) of the IT Act of Rs.3,13,71,354/-. In this regard, the AR of the appellant has filed a letter dated 05.12.2018 along with a copy of ITAT’s order dated 14.08.2017. The appellant has submitted that the Hon’ble ITAT has set aside the assessment order passed by the AO and remitted the matter back to the file of the AO with a direction to frame the assessment afresh as pr law after allowing a reasonable opportunity of hearing. Since, the assessment order, by which the penalty under section 271(1)(c) was initiated and levied, has been set aside, therefore, consequently the penalty order passed based on the assessment order which has been set aside, does not survive. I agree with the submission of the appellant as the assessment order will be passed afresh by the AO as per directions of the ITAT, therefore, if any penalty is to be initiated and levied, will be initiated with reference to the fresh assessment order to be passed by the AO. Under these circumstances, the penalty order under consideration does not survive. Therefore, the penalty levied by the AO is deleted.”

4.

Aggrieved by the order of CIT(A), Revenue is now in appeal and has raised the following grounds:

1. “On the facts and in the circumstances of the case, the Ld CIT(A) has erred in deleting the penalty under section 271(1)(c) of the Act on the basis of the ITAT order erroneously restoring the case back to the file of the AO for fresh assessment.

2. That the order of the CIT(A) is perverse, erroneous and is not tenable on the facts and in law.

3.

That the grounds of appeal

are without prejudice to each other.

4. That the appellant craves to add, amend alter or forgo any ground (s) or appeal either before or at the time of hearing of the appeal.”

5.

The case file of the appeal reveals that the appeal was filed by the assessee in the year 2019. The matter was fixed for hearing for the first time on 30.03.2022. On that day, there was no appearance on behalf of the assessee nor any adjournment application was filed. The matter was therefore adjourned for hearing for 22.06.2022 and the notice was issued through registered post.

6.

On the present date also, there is no appearance from the side of assessee nor there is any request for adjournment. In such a situation, we proceed to dispose of the appeals ex parte qua the assessee and after hearing the Learned DR.

7.

Before us, at the outset, Learned DR supported the order of AO.

8.

We have heard the Learned DR and perused the material available on record. We find that CIT(A) while deleting the penalty has noted that Hon’ble ITAT vide order dated 14.08.2017 had set aside the assessment order passed by AO and had remitted the matter back to the file of AO with directions therein to frame the assessment afresh. CIT(A) has noted that since the assessment order which was the basis for the levy of penalty u/s 271(1)(c) of the Act had been set aside therefore the penalty order passed based on such assessment order, which has been set aside does not survive. Before us, Revenue has not pointed out any fallacy in the findings of CIT(A). We therefore, find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed.

9.

In the result, appeal of the Revenue is dismissed.

Order pronounced in the open court on 22.06.2022

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