M/S TEEJ IMPEX PVT LTD,MUMBAI vs. DY CIT-WARD 8(3)(1), MUMBAI

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ITA 643/MUM/2022Status: DisposedITAT Mumbai13 July 2022AY 2012-133 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 on which the penalty was based were set aside by a co-ordinate bench and restored to the Assessing Officer for fresh adjudication, the penalty proceedings do not survive.

What were the facts?

The assessee's appeal was against a penalty order under Section 271(1)(c) for Assessment Year 2012-13. The penalty was levied based on additions made by the Assessing Officer regarding disallowance of interest expenditure and cessation of liability.

What were the issues?

Whether penalty under Section 271(1)(c) can survive when the underlying additions have been set aside by the Tribunal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 41(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “E ”, MUMBAI

Hearing: 13/07/2022Pronounced: 13/07/2022

ORDER

PER VIKAS AWASTHY, JM:

1.

1. This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [ in short ‘the CIT(A) dated 30/03/2022 for the Assessment Year 2012-13,in penalty proceedings u/s. 271(1)(c) of the Income Tax Act, 1961 [in short ‘the Act’].

2. Dr. P.Daniel appearing on behalf of the assessee submitted that the Tribunal in for assessment year 2012-13 decided on 05/07/2019 has set aside the additions and has restored the same back to the file of Assessing Officer for fresh adjudication. Since the additions have been set-aside, penalty proceedings arising there from does not survive. The CIT(A) has recorded this fact and still dismissed the appeal of assessee.

3.

Shri Brajendra Kumar representing the Department vehemently defended the impugned order. The ld. Departmental Representative admitted that the Tribunal has set-aside quantum proceedings to the file of Assessing Officer for fresh adjudication.

4.

We have heard the submissions made by rival sides. The penalty u/s. 271(1) (c) of the Act has been levied by the Assessing Officer vide order dated 29/03/2019 in respect of following additions:

1.

Disallowance of interest expenditure : Rs. 5,28,85,963/-

2.

Cessation of liability u/s. 41(1) : Rs. 2,97,06,230/- The assessee had assailed the aforesaid additions in (supra) before the Tribunal. The Co-ordinate Bench has set-aside both these additions and restored the issue back to the file of Assessing Officer for re- examination. Since, the substratum for levy of penalty has eroded the penalty proceedings arising therefrom does not survive. Consequently, the penalty is quashed.

5.

In the result, appeal by assessee is allowed.

Order pronounced in the open court on Wednesday the 13th day of July, 2022.

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