KRISHAN LAL MADHOK,DELHI vs. ACIT, CENTRAL CIRCLE- 15, NEW DELHI

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ITA 6421/DEL/2018Status: DisposedITAT Delhi06 September 2021AY 2006-074 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the additions made in the assessment order, which formed the basis for the penalty, were subsequently deleted by the Tribunal itself, the penalty must also be deleted. The principle 'sublato fundamento cadit opus' (when the foundation is removed, the superstructure falls) was applied.

What were the facts?

The assessee's appeal was against a penalty levied under Section 271(1)(c) of the Income Tax Act. The penalty was based on additions made in the assessment order for undisclosed deposits in HSBC Bank.

What were the issues?

Whether a penalty levied under Section 271(1)(c) can sustain when the underlying additions in the assessment order are deleted by a higher appellate authority.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3),Section 153A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI ‘C’ BENCH,

Before: SHRI N.K. BILLAIYA, & MS. SUCHITRA KAMBLE

For Appellant: Shri Priyanshu Goel, CA
Hearing: 06.09.2021Pronounced: 06.09.2021

PER N.K. BILLAIYA, ACCOUNTANT MEMBER,

1.

This appeal by the assessee is preferred against the Commissioner of Income Tax [Appeals] - XXVI, New Delhi dated 03.08.2018 pertaining to Assessment Year 2006-07.

2.

The solitary grievance of the assessee is that the ld. CIT(A) erred in confirming the penalty of Rs. 69,17,320/- u/s 271(1)(c) of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short].

3.

The roots for levy of penalty lie in the assessment order dated 09.03.2015 framed u/s 143(3) r.w.s 153A of the Act wherein the returned income of the assessee was assessed by making addition on account of undisclosed deposits in HSBC Bank amounting to Rs. 20,05,50,545/-

4.

The quarrel in respect of the addition made in the assessment order travelled upto the Tribunal and the Tribunal in to 3921/DEL/2017 for A.Ys 2006-07 to 2012-13 has deleted the additions.

The relevant findings of this Tribunal read as under:

“27. Considering the facts of the case in totality, as discussed hereinabove, as culled out from the records, and the relevant documentary evidences, we do not find any merit in bifurcating the income in two A.Ys when the assessee has paid taxes in A.Y 2007– 08. Making the addition of same income in two A.Ys definitely amounts to double taxation. We, accordingly direct the Assessing Officer to delete the addition in A.Y. 2006.07 amounting to Rs. 2,05,50, 550/– and Rs. 18,58,311.00 in F.Y 2007–08 also.

Accordingly, the appeals of the assessee in and 6268/DEL/2017 are allowed.

5.

Sublato Fundamento Cadit Opus, meaning thereby, that in case the foundation is removed, the super structure falls. Since the foundation [assessment] has been removed, the super structure i.e. penalty must fall. Accordingly, the penalty is directed to be deleted.

6.

In the result, the appeal filed by the assessee in is allowed.

The order is pronounced in the open court on 06.09.2021 in the presence of both the rival representatives.

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