THE ACIT, CIRCLE-4, BARODA vs. M/S. WELSPUN PROJECTS LTD.,(FORMERLY KNOWN AS MSK PROJECTS (INDIA) LTD.,), BARODA

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ITA 2521/AHD/2014Status: DisposedITAT Ahmedabad11 December 2018AY 2005-062 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the quantum additions/disallowances that formed the basis for the penalty were reversed by a co-ordinate bench, the penalty itself had no surviving basis. Therefore, the penalty was set aside.

What were the facts?

The Revenue appealed against the deletion of penalty imposed under Section 271(1)(c) by the CIT(A). The penalty was levied on additions made in the assessment year 2005-06.

What were the issues?

Whether penalty under Section 271(1)(c) can survive if the underlying additions/disallowances are deleted on appeal.

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, “A” BENCH, AHMEDABAD

Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD

For Appellant: Shri Mudit Nagpal, Sr.D.R, Shri Biren Shah, A.R
Hearing: 10/12/2018

PER PRADIP KUMAR KEDIA - AM:

The captioned appeal has been filed at the instance of the Revenue against the order of the CIT(A)-III, Baroda (‘CIT(A)’ in short), dated 11.05.2014 arising in the penalty order dated 25.03.2013 passed by the Assessing Officer (AO) u/s. 271(1)(c) of the Income Tax Act, 1961; (the Act) concerning assessment year 2005-06.

2.

The Revenue by way of its grounds of appeal has challenged the action of the CIT(A) in deleting penalty of Rs.1,34,75,700/- under s. 271(1)(c) of the Act.

ITA No. 2521/Ahd/14 [ACIT vs. M/s. Welspun Projects Ltd.] A.Y. 2005-06 - 2 - 3. When the matter was called for hearing, the learned AR for the assessee submitted that the quantum additions/disallowances giving rise to the imposition of penalty in appeal has been reversed by the co- ordinate bench of Tribunal in ITA No. 1864/Ahd/2013, order dated 08.10.2018 in the quantum proceedings.

4.

In view of the fact that the quantum additions/disallowances itself does not survive and ceases to exist having regard to the appellate order of the ITAT in quantum proceedings, the very basis for imposition of penalty under s. 271(1)(c) does not survive any more. Therefore, the action of the AO towards imposing penalty is set aside and cancelled.

5.

In the result, the appeal of the Revenue is dismissed.

This Order pronounced in Open Court on 19/12/2018

Sd/- Sd/- (MAHAVIR PRASAD) (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 19/12/2018 True Copy S. K. SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।

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