CIT vs. SK SHARMA

IN THE HIGH COURT OF DELHI AT NEW DELHI . 12.01.2011 . . Present: Mr. Abhishek Maratha, Sr. Standing Counsel with Ms. Anshul Sharma, Advocate for the appellant. None for the respondent. . +ITA No. 21/2011 . The Assessing Officer passed an assessment order in respect of the assessment year 1996-1997 and made certain additions. At the same time, penalty proceedings under Section 271(1)(c) of the Income Tax Act, 1961 were also initiated. On the basis of those additions it held a view that the assessee had given incorrect address and concealed certain particulars of income. Against the order of the Assessing Officer, mentioning additions in the quantum proceedings, the assessee preferred an appeal which was allowed by the CIT(A) and the additions were deleted. This order was confirmed by the ITAT. Since the assessing officer has also imposed penalty, this order was also challenged by the assessee. The Tribunal has set aside the order of penalty vide its decision dated 19th February, 2010 on the ground that the additions made by the Assessing Officer, on the basis of which penalty proceedings were initiated, have been deleted by the ITAT. We may note that the revenue had filed an appeal against the decision of the Tribunal in quantum proceedings i.e. ITA No. 1754/2010 and this appeal is disposed of vide order dated 18th October, 2010, remitting the case back to the Assessing Officer. Though, as of today, there are no additions and entire exercise is to be undertaken by the Assessing Officer afresh. In view thereof, the penalty which was imposed on the basis of the earlier orders has no legs to stand and is rightly set aside by the Tribunal. We fail to understand as to why the present appeal was filed on 2nd December, 2010, when the outcome of the quantum appeal i.e. ITA No. 1574/2010 was already known to the Department on the basis of which it is clear that the penalty imposed has lost its basis. In these circumstances, we were inclined to impose certain costs earlier, however, in view of passionate plea made by learned counsel we restrain ourselves from imposing cost. . . A.K. SIKRI, J. . M.L. MEHTA, J. . JANUARY 12, 2011 AK . . . . . . 2 #