ACIT, CENTRAL CIRCLE-18, NEW DELHI vs. HCP PETROCHEM PVT. LTD, (MERGED WITH M/S I.P. INDIA PVT. LTD. NOW KNOWN AS ADHUNIK TECHNOLOGY PVT. LTD.), NEW DELHI

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ITA 229/DEL/2019Status: HeardITAT Delhi23 December 2021AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to delete the penalty. It reasoned that when the quantum additions are deleted by the Tribunal, the penalty levied on those additions has no basis to stand.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of penalty levied under Section 271(1)(c). The CIT(A) had deleted the penalty because the additions made by the AO were previously deleted by the ITAT in the quantum appeal.

What were the issues?

Whether penalty under Section 271(1)(c) can survive when the underlying additions have been deleted by the Tribunal. Whether the pendency of a High Court appeal by the department on the quantum addition affects the penalty deletion.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI “C” BENCH: NEW DELHI

Before: SHRI C. N. PRASAD & SHRI PRADIP KUMAR KEDIA

For Appellant: Shri V. Rajakumar, Adv
Hearing: 23.12.2021Pronounced: 23.12.2021

ORDER PER C. N. PRASAD, JM :

This appeal is filed by the Revenue against the order dated 08/11/2018 passed by CIT(A)-27, New Delhi for assessment year 2012-13 in deleting the penalty levied u/s 271(1)(c) of the Act. The Revenue has raised following grounds of appeal:-

1. “On the facts and in the circumstances of the case, whether the Ld. CIT(A) has erred in deleting the penalty of Rs. 6,24,\9,5221- on the ground that the additions made by the A.O. have already been deleted by the Hon’ble ITAT in quantum appeal, without appreciating the fact that the department has challenged that order before the Hon’ble High Court.

2.

The Ld. Counsel for the assessee at the outset submits quantum addition made in the assessment order has been deleted by the Tribunal and, therefore, the penalty will not survive. The Ld. Counsel for the assessee submits that the Ld.CIT(A)’s taking note of the fact that Hon’ble Tribunal deleted the quantum addition he deleted he penalty levied u/s 271(1)(c) of the Act.

3.

When this was pointed out to the Ld. DR. The Ld. DR fairly submits that the Tribunal deleted the quantum addition made in the assessment order passed u/s 143(3) of the Act.

4.

On hearing both the sides and perused the orders of the authorities below, we observe that the Ld.CIT(A)’s deleted the penalty levied u/s 271(1)(c) of the Act as the Tribunal deleted the quantum addition made in the assessment order passed u/s 143(3) of the Act. When the quantum addition made in the assessment order is deleted by the Tribunal, the penalty has no legs to stand. Thus, we see no reason to interfere with the decision of the Ld.CIT(A)’s in deleting the penalty u/s 271(1)(c) of the Act. Grounds raised by the Revenue are rejected.

5.

In result, the appeal of the Revenue is dismissed.

Above decision was pronounced on conclusion of Virtual Hearing in the presence of both the parties on 23rd December, 2021.

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