CIT, FARIDABAD vs. SATISH KUMAR ARORA

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ITA/667/2009HC Punjab & HaryanaPHHC01084799200920 September 2010Bench: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal filed by the Revenue under Section 260-A of the Act was dismissed. The Court noted that by a separate order passed on the same day in ITA No.633 of 2009 (CIT v. Shri Satish Kumar), the quantum appeal of the Revenue had been dismissed. Consequently, the High Court reasoned that an appeal against the setting aside of penalty would not survive if the primary appeal on the quantum of assessment had already been dismissed. Therefore, the appeal concerning the penalty was rendered infructuous and was dismissed accordingly.

What were the facts?

The Revenue, Commissioner of Income Tax, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 1.4.2009 passed by the Income Tax Appellate Tribunal (ITAT), Delhi. The ITAT's order was in relation to ITA No.3579(Del)/2008 for the assessment year 2004-05. The appeal challenged the ITAT's decision to uphold the deletion of penalty levied under Section 271(1)(c) of the Act. The Revenue contended that the penalty should have been sustained despite the addition on which it was based having been deleted by the Tribunal, especially as the Revenue's appeal on the quantum of assessment was pending before the High Court.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the learned ITAT is justified in upholding the order of the CIT(A) deleting the penalty under Section 271(1)(c) of the Income Tax Act, 1961, on the grounds that no basis was left for the levy of penalty as the addition had been deleted by the Tribunal, notwithstanding that the appeal of the revenue on the quantum of assessment against the order of the learned ITAT was pending with the Hon'ble High Court? Assessee's contentions: Not recorded. Revenue's contentions: The Revenue argued that the ITAT was not justified in deleting the penalty under Section 271(1)(c) merely because the addition was deleted by the Tribunal. The Revenue contended that the penalty should survive even if the quantum appeal was pending before the High Court, implying that the deletion of the addition did not automatically nullify the penalty proceedings.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.667 of 2009 Date of decision: 20.9.2010 Commissioner of Income Tax. -----Appellant. Vs. Shri Satish Kumar Arora. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Ms. Urvashi Dhugga, Standing Counsel for the appellant. --- ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order dated 1.4.2009 of the Income Tax Appellate Tribunal, Delhi in I.T.A. No.3579(Del)/2008 for the assessment year 2004-05 proposing to raise following substantial question of law:- “Whether, on the facts and in the circumstances of the case, the Ld. ITAT is justified in upholding the order of the CIT(A) deleting the penalty u/s 271(1)(c) of the Income Tax Act, 1961 on the grounds no basis was left for the levy of penalty as the addition had been deleted by the Tribunal in spite of the fact that appeal of the revenue on quantum against the order of the Ld. ITAT is pending with the Hon’ble High Court?”

I.T.A. No.667 of 2009

By order passed today in I.T.A. No.633 of 2009 CIT v. Shri Satish Kumar, quantum appeal of the revenue has been dismissed. Appeal against setting aside of penalty does not survive.

Accordingly, the appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE September 20, 2010 ( AJAY KUMAR MITTAL ) ashwani JUDGE 2

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