RAINBOW PROMOTORS P.LTD,NEW DELHI vs. ACIT, CENTRAL CIRCLE-32, NEW DELHI

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ITA 6286/DEL/2018Status: DisposedITAT Delhi22 February 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 noted that the addition on which the penalty was levied had already been deleted by the Tribunal in the quantum proceedings. Therefore, the penalty is no longer sustainable.

What were the facts?

The assessee is aggrieved by a penalty levied under section 271(1)(c) for the assessment year 2007-08. The penalty was based on an addition made on account of interest paid in cash on post-dated cheques.

What were the issues?

The primary issue was the validity of a penalty when the underlying addition giving rise to the penalty has been deleted.

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: SHRI ANIL CHATURVEDI & SHRI AMIT SHUKLA

For Appellant: Shri Ajay Bhagwani, CA
For Respondent: Shri B.S. Ananat, Senior DR
Hearing: 22.02.2022

The aforesaid appeal has been filed by the assessee against the impugned order dated 31.08.2018 passed by the CIT (Appeals)-30, New Delhi in relation to the penalty proceedings levied under section 271(1)(c) of the Income-tax Act, 1961 (for short ‘the Act’) for the assessment year 2007-08.

2.

The assessee is mainly aggrieved by levy of penalty of Rs.15,82,487/- on account of addition of Rs.47,01,389/- on account of interest in cash on PDCs (Post Dates Cheques).

3.

At the very outset, it has been pointed out by the ld. Counsel for the assessee that in the quantum proceedings, the Tribunal vide order dated 15.02.2022 in has deleted the addition, therefore, penalty levied by the AO and sustained by the ld. CIT(A) does not stand. Ld. DR also admitted that the quantum of addition has been deleted.

4.

On perusal of the impugned order, we find that during the course of assessment, the addition of Rs.1,25,33,522/- was made on account of interest paid in cash outside the books of accounts on PDCs. Ld. CIT (A) in the quantum order has sustained the addition of Rs.47,01,389/- on which the AO levied the penalty of Rs.15,82,487/-. Now, this addition also has been deleted by the tribunal in the aforesaid order vide para 24 wherein the entire addition on account of PDCs of Rs.1,25,33,522/- has been deleted. Accordingly, the penalty levied on such addition is directed to be deleted.

5.

In the result, the appeal filed by the assessee is allowed.

Order was pronounced on 22nd day of February, 2022.

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