G D EDUCATIONAL SOCIETY,NOIDA vs. CIT(A)- 1, NOIDA

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ITA 1998/DEL/2018Status: DisposedITAT Delhi06 April 2021AY 2010-114 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 foundation for the penalty (the addition to income) was removed by the subsequent order of the Assessing Officer, the penalty must also fall. Therefore, the CIT(A) was directed to delete the penalty.

What were the facts?

The assessee's appeal challenges the penalty imposed under Section 271(1)(c) on an enhanced income. The original assessment was enhanced by the CIT(A), which was later remitted back to the Assessing Officer by the Tribunal for fresh adjudication.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying addition to income has been deleted pursuant to a Tribunal's order.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI ‘C’ BENCH,

Before: SHRI N.K. BILLAIYA, & SHRI SUDHANSHU SRIVASTAVA

For Appellant: Shri Somil Agarwal, CA
Hearing: 06.04.2021Pronounced: 06.04.2021

PER N.K. BILLAIYA, ACCOUNTANT MEMBER,

1.

This appeal by the assessee is preferred against the order of the ld. CIT(A) – 1, Noida dated 25.09.2017 pertaining to Assessment Year 2010-11.

2.

The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in imposing penalty u/s 271(1)(c) of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short] on the enhanced income of Rs. 2,37,66,767/-.

3.

The roots for levy of penalty lie in the order of the ld. CIT(A) dated 30.03.2017 by which the ld. CIT(A) enhanced the assessed income of 3,38,750/- by the Assessing Officer vide order dated 20.03.2013. The assessed income of Rs. 3,38,750/- was enhanced by Rs. 2,37,66,767/-.

4.

The order of the ld. CIT(A) in the quantum proceedings was challenged before the Tribunal and the Tribunal in order dated 30.07.2018 has remitted the matter to the file of the Assessing Officer for fresh adjudication with certain directions.

5.

Pursuant to the directions of the Tribunal, the Assessing Officer framed assessment u/s 143(3) r.w.s 254 of the Act vide order dated 10.12.2019 and the income was assessed at Rs. NIL.

6.

Sublato Fundamento Cadit Opus, meaning thereby, that in case the foundation is removed, the super structure falls. Since the foundation [addition] has been removed, the super structure i.e. penalty must fall. We, accordingly, direct the ld. CIT(A) to delete the penalty so levied.

7.

In the result, the appeal of the assessee in is allowed.

The order is pronounced in the open court on 06.04.2021 in the presence of both the rival representatives.

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