SANDEEP TANEJA,NEW DELHI vs. ITO WARD-45(5), NEW DELHI

This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-15 {hereinafter referred to CIT (Appeals)] New Delhi, dated 26.09.2019 in sustaining the penalty under Section 271(1)(c) of the Income Tax Act, 1961 (the Act) for assessment year 2013-14.

At the outset, the ld. Counsel for the assessee submits that the Tribunal in dated 11.10.2018 allowed the claim for exemption under Section 54 of the Act in respect of second residential property following the judgement of the Hon’ble Delhi High Court in the case of Laxman Singh Rawat. Therefore, the ld. Counsel submits that since the Tribunal deleted the disallowance made by the Assessing Officer in respect of deduction claimed under Section 54 of the Act by the assessee. The penalty levied pursuant to the disallowance made under Section 54 of the Act by the Assessing Officer will not survive.

Heard rival submissions perused the orders of the authorities below and the decision of the Tribunal in the quantum proceedings in dated 11.10.2018. It is observed from the order of the Tribunal that the claim for exemption under Section 54 of the Act which was denied by the Assessing Officer was deleted by the Tribunal following the decision of the Hon’ble Delhi High Court in the case of Laxman Singh Rawat (supra). Since the disallowance made in assessment proceedings is deleted by the Tribunal the penalty levied under Section 271(1)(c) of the Act on the basis of the disallowance made in the assessment order will not survive. Hence, the penalty order dated 23.03.2018 passed under Section 271(1)(c) of the Act for the assessment year under consideration is set aside and the Assessing Officer is directed to delete the penalty. 2

In the result, appeal of the assessee is allowed.