ACIT CC-18, NEW DELHI vs. AERENS BUILDWELL LTD., NEW DELHI

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ITA 2180/DEL/2019Status: DisposedITAT Delhi31 March 2022AY 2009-102 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 held that since the quantum additions/disallowances, which formed the basis for the penalty, were already reversed by a coordinate bench, the basis for imposing the penalty ceased to exist. Therefore, the deletion of penalty by the CIT(A) was upheld.

What were the facts?

The Revenue appealed against the deletion of penalties under Section 271(1)(c) by the CIT(A). The penalties were levied based on additions/disallowances made in the quantum assessments.

What were the issues?

Whether penalty under Section 271(1)(c) can survive when the underlying quantum additions/disallowances have been deleted. The finality of the quantum assessment for penalty imposition.

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 “A” DELHI

Before: SHRI SAKTIJIT DEY & SHRI PRADIP KUMAR KEDIA

For Appellant: Shri Vivek Bansal, Adv, Shri Mayank Banga, Adv

PER PRADIP KUMAR KEDIA, A.M.: The captioned appeals have been filed by the Revenue against the orders of the Commissioner of Income Tax (Appeals)-XXVII, New Delhi [‘CIT(A)’ in short], of even date 24.12.2018 arising from the respective orders of the Assessing Officer (AO) whereby penalty under Sections 271(1)(c) of the Income Tax Act, 1961 (the Act) amounting to Rs.74,37,668/- (A.Y. 2008-09) and Rs.34,98,136/- (A.Y. 2009-10) were deleted by the CIT(A).

2.

From the grounds of appeal raised by the Revenue itself, it is admitted position that the additions/disallowances made in the quantum assessments giving rise to the penalty in question in the respective appeals stood reversed by the Co-ordinate Bench of Tribunal in ITAs No.5037/Del/2016 and 5075/Del/2016 for I.T.As. No.2180 & 2181/Del/2019 2 Assessment Years 2008-09 and 2009-10, respectively. Thus, in view of the fact that quantum additions/disallowances itself have been admittedly deleted, the very basis for imposition of penalty ceases to exist and does not survive any more. Hence, the conclusion drawn by the CIT(A) deleting the penalty cannot disturbed.

1.

3. The appeal moved by the Revenue on the ground that quantum appeal in favour of the assessee is subjected to challenge before the Jurisdictional High Court and thus not yet attained finality is devoid of any merit. As noticed, the Tribunal in the quantum proceedings has reversed the action of the Revenue. It is trite that penalty under Section 271(1)(c) is not automatically attracted merely because it is lawful to do so. The penalty is not ordinarily to be imposed unless assessee obliged in law, either acted deliberately in defiance of law or guilty of dishonest conduct or acted in conscious disregard of its obligation. The decision of the Tribunal in favour of the assessee implies absence of such possibilities. We thus decline to interfere with the order of the CIT(A).

3.

In the result, both the appeals of the Revenue are dismissed.

Order was pronounced in the open Court on 31/03/2022.

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