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आदेश/Order Per N.K. Saini, Vice President:
These two appeals by the Department are directed against the common order dated 7.5.2018 of CIT(A), Panchkula.
Since the issue involved is common and appeals were heard together so these are disposed off by this consolidated order for the sake of convenience and brevity.
The common issue involved in both the appeals relates to the deletion of penalty levied by the Assessing officer u/s 271(1)(c) of the Income-tax Act, 1961 (in short 'the Act').
During the course of hearing, Ld. Counsel for the assessee at the very outset stated that the addition on the basis of which the penalty was levied by the Assessing officer has been deleted by the ITAT vide order
ITA Nos. 907 & 908-Chd/2018 M./s Kunal Calcium Limited, Yamunanagar
dated 6.2.2018 in ITA Nos. 46 & 47/Chd/2015 for the assessment year
2005-06 & 2006-07 respectively. Copy of the said letter was furnished
which is placed on record. It was pointed out that the Ld. CIT(A) also
deleted the impugned penalties for this reason that the quantum additions
had been deleted by the ITAT.
In his rival submissions, the Ld. Sr. DR although supported the
orders of the authorities below but could not controvert the aforesaid
factual position narrated by the Ld. Counsel for the assessee.
We have considered the rival submissions and have perused the
material available on record. In the present case, it is noticed that the Ld.
CIT(A) deleted the impugned additions levied by the Assessing officer u/s
271(1)(c) by observing in para 5 of the impugned order as under:-
“5. I have carefully considered argument of the counsel for the appellant and have also perused the order of the Hon'ble ITAT. The Hon'ble ITAT, Chandigarh in ITA No. 46 & 47/C/2015 vide its order dated 6.2.2018 in the appellant’s own case for the assessment year 2005-06 & 2006-07 allowed the appellant’s appeal. Since the quantum additions have been deleted by the ITAT, the penalty levied against the same has no legs to stand and is accordingly ordered to be deleted for both the years A.Y. 2005-06 and A.Y. 2006-07.”
It is well settled that no penalty u/s 271(1)(c) of the Act can be
levied when the additions on the basis of which said penalty is levied, has
been directed to be deleted. In the present case, it is noticed that this
Bench of the Tribunal vide order dated 6.2.2018 in ITA Nos. 46 &
47/Chd/2015 for the assessment years 2005-06 and 2006-07 respectively
deleted the additions on the basis of which the Assessing officer levied the
impugned penalties u/s 271(1)(c) of the Act.
ITA Nos. 907 & 908-Chd/2018 M./s Kunal Calcium Limited, Yamunanagar
On a similar issue, the Hon'ble Supreme Court in the case of K.
C. Builders & Others Vs ACIT (2004) 265 ITR 562 has held as under:-
“Where the additions made in the assessment order on the basis of which penalty for concealment is levied, are deleted, there remains no basis at all for levying penalty for concealment and, therefore, in such a case no penalty can survive and the penalty is liable to be cancelled. Ordinarily, penalty cannot stand if the assessment itself is set aside.” 9. In the present case also, the addition on the basis of which
the impugned penalty u/s 271(1)(c) of the Act was levied by the
Assessing officer has been deleted, therefore, the impugned
penalty was not leviable and the Ld. CIT(A) was fully justified in
deleting the same. We, therefore, do not see any merit in these
appeals of the Department.
In the result, the appeals of the assessee are allowed. (Order Pronounced in the Court on 24/04/2019) Sd/- Sd/- संजय गग� एन के . सैनी (SANJAY GARG ) (N.K. SAINI) �या�यक सद�य/ Judicial Member उपा�य� / Vice President Dated : . 24. 04.2019 “आर.के.” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File
आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar