SUNIL KUMAR,DELHI vs. ITO WARD - 20(4), NEW DELHI

(A) This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals)-12, New Delhi, [“Ld. CIT(A)”, for short], dated 08.11.2018 for Assessment Year 2010-11.

(B) Vide Assessment Order dated 28.03.2013 u/s. 143 (3) of the Income Tax Act, 1961 the Assessing Officer made an addition of Rs.42,60,708/- u/s. 40 (a) (ia) of the I. T. Act ; besides some other additions. An order dated 21.03.2017 was separately passed u/s. 271 (1) (c) of the I. T. Act levying penalty of Rs.12,78,534 (being the ITA No.-6378 /Del/2019. Sunil Kumar. minimum amount of penalty u/s. 271 (1) (c) of I. T. Act.) This penalty was levied in respect of aforesaid addition of Rs. Rs.42,60,708/- made by the Assessing Officer in the aforesaid assessment order dated 28.03.2013. This addition of Rs.42,60,708/- has been deleted by the coordinate Bench of Income Tax Appellate Tribunal, Delhi in assessee’s appeal in vide order dated 17.05.2019 for A.Y.2010-11. The present appeal before us, filed by the assessee, is against levy of aforesaid penalty amounting to Rs.12,78,534/- levied vide aforesaid order dated 21.03.2017 u/s. 271 (1) (c) of I. T. Act, which was confirmed by the Ld. CIT(A) vide his impugned appellate order dated 08.11.2018.

(C) At the time of hearing before us, the Ld. Authorised Representative of the assessee submitted that the aforesaid penalty amounting to Rs.12,78,534/- u/s. 271 (1) (c) of the I. T. Act has no legs to stand, in view of order of ITAT in assessee’s appeal dated 17.05.2019 in for A.Y.2010-11 wherein the aforesaid addition of Rs.42,60,708/- has already been deleted. The Ld. Departmental Representative agreed with the submission of Ld. Authorised Representative of the assessee; and stated that the aforesaid penalty u/s. 271 (1) (c) amounting to Rs.12,78,534/- does not survive because the corresponding addition amounting to Rs.42,60,708/- has already been deleted by ITAT vide aforesaid order dated 17.05.2019 in assessee’s case for A.Y.2010-11 in ITA No.956/Del/2016.

ITA No.-6378 /Del/2019. Sunil Kumar.

(D) The facts are not in dispute. Both the sides are in agreement that the quantum addition of Rs.42,60,708/- in respect of which aforesaid penalty amounting to Rs.12,78,534/- has been levied by the AO has already been deleted by the ITAT in aforesaid order dated 17.05.2019. That being the case, both the sides are also in agreement that aforesaid penalty u/s. 271 (1) (c) of the I. T. Act amounting to Rs.12,78,534/- has no legs to stand and does not survive. In view of the forgoing, and as both the sides are in agreement and further in deference to the aforesaid order of coordinate bench of ITAT, Delhi in assesee’s own case for A.Y.2010-11 in dated 17.05.2019 ; we cancel the penalty levied by the AO u/s. 271 (1) (c) of the I. T. Act vide aforesaid order dated 21.03.2017. Accordingly, we set aside the impugned appellate order dated 08.11.2018 of the Ld. CIT(A); and allow assessee’s appeal. For coming to this decision, we take strength from the order of the Hon’ble Supreme Court in the case of K. C. Builders Vs. ACIT [2004] 135 Taxmann 461 (SC) in which Hon’ble Supreme Court held, that where the additions made in the Assessment Order, on the basis of which penalty for concealment was levied, are deleted, there remains no basis at all for levying the penalty for concealment, and, therefore, in such a case no such penalty can survive and the same is liable to be cancelled.

(E) In the result, the appeal filed by the assessee is allowed.

ITA No.-6378 /Del/2019. Sunil Kumar. This order has been already pronounced orally on 18.08.2021 in Open Court, in the presence of Representatives of both sides; after conclusion of the hearing. Now, this written order is signed today on 18.08.2021.