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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI B. R. BASKARAN, AM & SHRI ABY T. VARKEY, JM
O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee company against the order of the Ld. Commissioner of Income Tax (Appeals)-47, Mumbai dated 16.06.2022 for the assessment year 2008-09 against the penalty confirmed u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter “the Act”) which was levied by the AO (concealment of income) in the re- assessment proceedings pursuant to a search u/s 132 of the Act by framing re-assessment u/s 153C/143(3) of the Act.
At the outset, the Ld. AR of the assessee Ms. Sukanya Jayaram brought to our notice that the penalty order u/s 271(1)(c) of the Act dated 28.03.2019 was levied on the assessee for concealment of income pursuant to re-assessment order passed u/s 153C r.w.s 143(3) of the Act dated 29.03.2016. The AO levied penalty of Rs.1,58,24,440/- vide penalty order dated 28.03.2019 against
Essel Mining & Industries Ltd. confirmation of quantum addition by Ld. CIT(A) of Rs.4,65,56,163/- (suppression of production of iron-ore). Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who was also pleased to confirm the same. Aggrieved, the assessee is before us.
It was brought to our notice by the Ld. AR that in the light of the appeal preferred by the assessee against the re-assessment order (quantum appeal) passed u/s 153C/143(3) of the Act dated 29.03.2016 which has been confirmed by Ld. CIT(A) of Rs.4,65,56,163/- (suppression of production of iron-ore as per Justice M. B. S. Shah Commission Report), has come up before this Tribunal, and the Tribunal vide order dated 05.09.2022 [ITA. No.1017/Mum/2018 and for AY. 2008-09 i.e. cross-appeal’s of revenue and M/s. Essel Mining & Industries Ltd] was pleased to delete the quantum addition of Rs.4,65,56,163/- by observing at para no. 4.7 “we categorically hold that no additions/disallowance could be made in the search assessment u/s 153C of the Act for AY. 2008-09 in view of the aforesaid detailed reasons”. In the light of the aforesaid decisions of this Tribunal in the assessee’s own quantum appeal for AY 2008-09 deleting the additions on account of suppressed production of iron-ore to the tune of Rs.4,65,56,163/-, the penalty levied by the AO u/s 271(1)(c) of the Act for concealment of income also needs to be deleted. Our action is squarely covered by the legal Maxim “Sublato Fundamento credit opus” meaning, in case foundation is removed, the super-structure falls. In the case of Badarinath Vs.
Essel Mining & Industries Ltd. Tamilnadu AIR 2000 (SC) 3243 SC the Hon’ble Supreme Court has held that once the basis of proceeding is gone all consequential order and acts would fall on the ground automatically which is applicable to judicial and quasi-judicial proceedings. Applying the same principle, the penalty is deleted and therefore, the appeal of the assessee is allowed.
In the result, the penalty appeal of the assessee is allowed. Order pronounced in the open court on this 10/10/2022.