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Facts
The AO imposed a penalty of Rs.11,60,04,363/- for furnishing inaccurate particulars of income. A related disallowance of Rs.33,51,95,223/- in quantum proceedings was deleted by a co-ordinate bench of the Tribunal. The CIT(A) deleted the penalty based on this deletion.
Held
The Tribunal held that the penalty does not survive when the underlying disallowance has been deleted by a co-ordinate bench in quantum proceedings, as it is a judicially settled view. Therefore, the CIT(A) had rightly deleted the penalty.
Key Issues
Whether the penalty imposed for furnishing inaccurate particulars of income survives when the related disallowance in quantum proceedings has been deleted by the Tribunal.
Sections Cited
147, 148, 143(3)
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: HON’BLE SHRI MANU KUMAR GIRI & SHRI HON’BLE S.R. RAGHUNATHA
आदेश / O R D E R
PER MANU KUMAR GIRI (Judicial Member): This appeal filed by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals) NFAC, Delhi [CIT(A)] dated 21.01.2025 for Assessment Year 2016-17.
Brief facts of the case are that the AO vide impugned penalty order for AY 2016-17 imposed a penalty amounting to income. In quantum proceedings, the claim of railway siding expenditure of Rs.33,51,95,223/- were disallowed in the assessment order.
Aggrieved, assessee filed appeal before the Ld. CIT(A)
challenging the imposition of penalty. The Ld. CIT(A) has deleted the penalty imposed by the AO, noting the result of the quantum proceedings, where the co-ordinate Bench of the Tribunal in IT(TP)A No.46/CHNY/2021 (AY 2016-17) has deleted disallowance relating to the claim of railway siding expenditure of Rs.33,51,95,223/- and allowed the appeal of the assessee.
Aggrieved, revenue is in further appeal before us.
Before us, the Ld. DR, Mr. M.K.Biju, CIT has contended that against the Tribunal order in the quantum proceedings, the Revenue has filed appeal before the Hon’ble High Court hence the proceedings has not been reached finality.
Per contra, the Ld. counsel submitted that the Co-ordinate Bench of the Tribunal in IT(TP)A No.46/CHNY/2021 (AY 2016-17) has Ramco Cement Ltd. :- 3 -: deleted disallowance relating to the claim of railway siding expenditure of Rs.33,51,95,223/- and allowed the appeal of the assessee. He further contended that there is no stay by the Hon’ble High Court against the order of Tribunal passed in quantum proceedings.
We have heard the both parties. In the aforesaid facts and circumstances of the case, we are of the considered view that the Ld. CIT(A) has rightly deleted the penalty. It is judicially settled view that when the disallowance has been deleted by the Tribunal in quantum proceeding, the penalty does not survive.
In the result, the appeal filed by the Revenue is dismissed. Order pronounced on 10th day of June, 2025 at Chennai.