MAHARAJI EDUCATION TRUST,GHAZIABAD vs. ACIT CENTRAL CIRCLE-06, NEW DELHI

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ITA 280/DEL/2020Status: HeardITAT Delhi05 April 2022AY 2007-082 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 if the assessment order leading to the additions is quashed, the consequential penalty also ceases to exist. Therefore, the penalty imposed was deleted.

What were the facts?

The assessee challenged a penalty imposed under Section 271(1)(c) following additions made to its income. The additions were based on treating certain donations as taxable under Section 115BBC.

What were the issues?

Whether a penalty under Section 271(1)(c) can survive if the underlying assessment order is quashed. The taxability of donations under Section 115BBC was the basis for the original additions.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 115BBC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “E” DELHI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI PRADIP KUMAR KEDIA

For Appellant: Shri Suresh Gupta, CA
For Respondent: Shri Gayasuddin Ansari, Sr.D.R

PER PRADIP KUMAR KEDIA, A.M.: The captioned appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-XXIV, New Delhi [‘CIT(A)’ in short], dated 11.11.2019 in relation to penalty proceedings u/s.271(1)(c) for the Assessment Year 2010-11.

2.

As per the grounds of appeal, the assessee has challenged the imposition of penalty of Rs.6,64,350/- imposed by the Assessing Officer u/s. 271(1)(c) of the Act in consequence of additions of Rs.21,66,000/- made by the Assessing Officer as unanimous donation u/s. 115BBC.

1.

3. When the matter was called for hearing, the ld. counsel for the assessee referred to the order of the Co-ordinate Bench in order dated 13.10.2021 and submitted that in the light of paragraph 55 at page no.38 of the said decision, the assessment order stands quashed and consequently the additions/disallowances flowing from the assessment order does not survive. As a corollary, the consequential penalty imposed under Section 271(1)(c) automatically ceased to exist.

4.

The ld. DR did not offer any comment.

6.

Having regard to the assertion made on behalf of the assessee and in the light of the order of the Co-ordinate Bench in quantum proceedings, the edifice for imposing penalty has clearly ceased to exist. Hence, the penalty imposed in question does not survive any more. Accordingly, the penalty imposed in question stands deleted.

In the result, the appeal of the assessee is allowed. 3. Order pronounced in the open Court on 05/04/2022.

[CHALLA NAGENDRA PRASAD] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 05/04/2022 Prabhat

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