Loading judgment…
Facts
The Revenue appealed an order deleting a penalty levied under Section 271(1)(c) of the Income Tax Act, 1961. The penalty was imposed on an addition of Rs. 3.52 crores, which had previously been deleted by the Tribunal in quantum assessment proceedings.
Held
The Tribunal held that since the addition on which the penalty was based was already deleted, the penalty could not stand by itself. Consequently, the Ld.CIT(A) was justified in deleting the penalty.
Key Issues
Whether a penalty can be sustained when the addition on which it was based has been deleted by a higher authority.
Sections Cited
271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI “D” BENCH : MUMBAI
Before: SHRI B.R. BASKARAN & SHRI ANIKESH BANERJEE
O R D E R PER B.R. BASKARAN, A.M :
The Revenue has filed this appeal challenging the order dt.28-11-2024 passed by the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟] and it relates to AY. 2015-16. The Revenue is aggrieved by the decision of the Ld.CIT(A) in deleting the penalty levied by the AOu/s.271(1)(c) of the Income Tax Act, 1961 („the Act‟)on the addition of undisclosed income of Rs. 3.52 crores.
The Ld.AR submitted that the AO has made addition of Rs. 3.52 crores as undisclosed income of the assessee and the said addition has since been deleted by the Tribunal, vide its order dt. 31-07-2023 passed and others. The AO had levied penalty u/s.271(1)(c) of the Act on the above said addition. The Ld.CIT(A) upon noticing that the Tribunal had already deleted the addition of Rs. 3.52 crores, deleted the penalty, since the penalty cannot stand by itself in the absence of addition relating thereto. The Revenue is aggrieved.
We heard the parties and perused the record.Since the addition on which the impugned penalty was levied has been deleted by the Tribunal in the quantum assessment proceedings referred supra, the Ld.CIT(A) was justified in deleting the penalty on the ground that the penalty levied on the said addition would not survive. Accordingly, we confirm the order passed by the Ld.CIT(A).
In the result, the appeal filed by the Revenue is dismissed.