GOVIND HARNARAYAN AGRAWAL HUF,INDORE vs. ITO-2(1), INDORE

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ITA 817/IND/2019Status: DisposedITAT Indore06 July 2021AY 2014-155 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 noted that the additions on which the penalty was imposed had been deleted in the quantum appeals. Therefore, the penalty orders were no longer sustainable.

What were the facts?

The assessees appealed against penalty orders under section 271(1)(c) of the Income Tax Act. The penalty was imposed based on additions made to their income.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying additions to income have been deleted by the Tribunal.

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, INDORE - BENCH

Before: SHRI RAJPAL YADAV, VICE- & SHRI MANISH BORAD

For Appellant: Shri Girish Agrawal, Shri Vijay Bansal, ARs
For Respondent: Shri (Dr.) Harshi Bari, Sr.DR
Hearing: 05/07/2021

Heard together (2 matters)

ITA No.816/Ind/2019
ITA No.817/Ind/2019

Read from the judgment's own cause title. This page is filed under one of them.

आदेश/O R D E R PER RAJPAL YADAV, VICE-PRESIDENT

1.

These two appeals are at the instance of above assessees against separate orders of ld.CIT(A)-1, Indore of even dated i.e. 14.6.2019 passed for the Asstt.Year 2014-15 under section 271(1)(c) of the AND 817/Ind/2019 2 Income Tax Act, 1961. Since common grievance is raised in both the appeals, for the sake of convenience, we dispose of both the appeals by this consolidated order.

2.

Only grievance raised by both the assessees is that the ld.CIT(A) has erred in confirming the orders of the ld.AO imposing penalty under section 271(1)(c) of the Act.

3.

Before taking up the matter on merit, it is noticed that the ld.representative for the assessee has filed an application stating that quantum, against which penalty under section 271(1)(c) of the Act was imposed, has since been deleted by the ITAT vide order in and 61/Ind/2019 dated 28.6.2021, the impugned penalty imposed by the Revenue authorities do not have leg to stand, and therefore, liable to be cancelled. Contents of the application read as under:

“May it please your Honors,

Assesses had preferred an appeal before your Honors against the quantum order passed by Ld. CIT(A) u/s 250 rws 143(3) vide 1TA No. 60/lnd/2019. It is submitted that the said appeal has been decided by the Hon'ble Bench in the favour of assessee vide order pronounced on 28.06.2021.

Accordingly, it is most humbly submitted that the instant appeal on imposition of penalty is in-fructuous and may please be disposed of by deleting the penalty so imposed.

Submitted Sd/- (Authorized Representative)”

The ld.counsel for the assessee has also made submission to this effect at the Bar, and prayed for quashing of impugned penalty orders. The ld.DR does not dispute the factual position of the matter as averred by the ld.counsel for the assessee in this behalf. AND 817/Ind/2019 3 4. After hearing both the parties, and on perusal of the material available on record, we find that impugned penalty in both the cases of the assesses stands extinguished as the Tribunal in the quantum appeals of the assessee, deleted the addition, on which impugned penalty has been imposed under section 271(1)(c) of the Act. Further, sub-clause (iii) of section 271(1)(c) provides mechanism for quantification of penalty. It contemplates that the assessee would be directed to pay a sum in addition to taxes, if any, payable him, which shall not be less than but which shall not exceed three times the amount of tax sought to be evaded by reason of concealment of income and furnishing of inaccurate particulars of income. In other words, the quantification of the penalty is depended upon the addition made to the income of the assessee. Since in the present case, basis for visiting the assessee with penalty has been extinguished by deleting addition by the Tribunal vide order dated 28.6.2021 (supra), the impugned penalty does not survive. In other words, there is no room for the Revenue to impose penalty under section 271(1)(c) in this case. The ld.DR has not disputed the factual position of the case. Therefore, we delete impugned penalty in both the cases of the assessee, and cancel orders of the both the Revenue authorities passed under section 271(1)(c) of the Act.

5.

In the result, both the appeals of the assessees are allowed.

Order pronounced in the Court on _6th ___July, 2021 at Indore.

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