DCIT, CENTRAL CIRCLE- 29, NEW DELHI vs. OMAXE LTD., NEW DELHI

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ITA 931/DEL/2018Status: DisposedITAT Delhi02 November 2021AY 2007-083 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 held that since the additions made in the quantum assessment proceedings, which formed the basis for the penalty, were deleted by a coordinate bench, the penalty was not sustainable. Therefore, the penalty order was liable to be cancelled.

What were the facts?

The Assessing Officer (AO) initiated penalty proceedings under Section 271(1)(c) for concealing income and levied a penalty. The Commissioner of Income-tax (Appeals) deleted this penalty. The Revenue appealed this deletion to the Tribunal.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the additions forming the basis of the penalty have been deleted in quantum appeal proceedings.

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

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Income Tax Appellate Tribunal, DELHI BENCH ‘E’ : NEW DELHI

Before: SHRI ANIL CHATURVEDI & SHRI KULDIP SINGH

For Appellant: Shri Ashwani Kumar, CA
For Respondent: Ms. Sarita Kumari, CIT DR
Hearing: 02.11.2021

Date of Hearing : 02.11.2021 Date of Order : 02.11.2021 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, DCIT, Central Circle 29, New Delhi (hereinafter referred to as ‘the Revenue’) by filing the present appeal sought to set aside the impugned order dated 09.11.2017 passed by the Commissioner of Income-tax (Appeals)-30, New Delhi dismissing the penalty order dated 31.03.2016 passed u/s 271(1)(c) of the Income-tax Act, 1961 (for short ‘the Act’), qua the assessment year 2007-08 on the ground that :-

“Whether on facts and in the circumstances of the case, the Ld. CIT (A) has erred in law and on facts in deleting the penalty of Rs.1,34,64,000/- levied by the AO.”

2.

Briefly stated the facts necessary for adjudication of the controversy at hand are : On the basis of assessment completed under section 143(3) of the Act, penalty proceedings were initiated u/s 271(1)(c) of the Act for concealing the particulars of income. Declining the contentions raised by the assessee, AO proceeded to levy the penalty of Rs.1,34,64,000/- @ 100% of the tax sought to be evaded.

3.

Assessee carried the matter by way of appeal before the ld. CIT (A) who has deleted the penalty by allowing the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal.

4.

We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.

5.

At the very outset, it is brought to our notice by the ld. AR for the assessee that additions made in the quantum proceedings have since been deleted by the Tribunal in assessee’s own case in for AY 2007-08 vide order dated 18.09.2017 and as such, penalty levied is not sustainable and brought on record the copy of the order of the Tribunal dated 18.09.2017 (supra). Ld. DR for the Revenue did not controvert this factual position.

6.

Undisputedly, coordinate Bench of the Tribunal vide order dated 16.06.2017 (supra) deleted the additions. In these circumstances, the penalty levied by the AO is not sustainable in view of the law laid down by the Hon’ble Apex Court in case cited as K.C. Builders & Anr vs. ACIT – 265 ITR 562 (SC) because “when the addition made in the assessment order on the basis of which penalty for concealment is levied have been deleted there remains no basis at all for levying the penalty for concealment and in such case, no penalty can survive and the penalty is liable to be cancelled.” So, in view of the matter, the impugned order passed by the ld. CIT (A) is confirmed and the appeal filed by the Revenue is hereby dismissed. Order pronounced in open court on this 2nd day of November, 2021 after the conclusion of the hearing.

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