ITO, W-6(1), LUDHIANA vs. M/S BRONZE LOGISTICS PVT. LTD., LUDHIANA

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ITA 1260/CHANDI/2018Status: DisposedITAT Chandigarh28 February 2019AY 2006-073 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that if the additions forming the basis of a penalty are deleted, the penalty cannot survive. Following the Supreme Court's decision in K.C. Builders, the penalty is liable to be cancelled.

What were the facts?

The Department appealed the deletion of penalty imposed under Section 271(1)(c) by the CIT(A). The penalty was levied based on additions made by the Assessing Officer. However, these additions were subsequently deleted by the ITAT.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying additions have been deleted.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

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आदेश/Order

This is an appeal by the Department against the order dated 19.7.2018 of the Commissioner of Income Tax (Appeals)-2, Ludhiana

2.

Following grounds have been raised in this appeal: i) Whether on the facts and circumstances of the case the Ld. CIT(A), Ludhiana has erred in law and on the facts in deleting penalty imposed u/s 271(1)(c) of the Income-tax Act, 1961 of Rs. 9,20,10,830/-. ii) That the appellant craves lead to add or amend any ground of appeal before it is finally disposed off.

3.

During the course of hearing, the Ld. Counsel for the assessee at the very outset has stated that the additions on the basis of which the penalty u/s 271(1)(c) of the I.T. Act. 1961 was levied by the Assessing officer was

ITA No. 1260-Chd-2018 Bronze Logistics Pvt Ltd., Ludhiana

deleted by the ITAT and the relevant findings has been given by the Ld.

CIT(A) in par 5.2 of the impugned order.

In his rival submissions the Ld. DR supported the orders of the 4.

Assessing officer.

5.

After considering the submissions of both the parties and material on

record, it is an admitted fact that the addition on the basis of which the

penalty u/s 271(1)(c) of the Act was levied by the Assessing officer has

been deleted by the ITAT.

6.

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.”

7.

So respectfully following the ratio laid down by the Hon'ble Apex

Court in the aforesaid referred to case, we do not find any infirmity in the

order of the Ld. CIT(A). Accordingly, we do not see any merit in the

appeal of the Department.

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

(Order Pronounced in the Court on 08.03.2019)

Sd/- Sd/-

संजय गग� एन. के. सैनी (SANJAY GARG ) (N.K. SAINI) �या�यक सद�य/ Judicial Member उपा�य� / Vice President Dated : 08.03.2019 “आर.के.”

ITA No. 1260-Chd-2018 Bronze Logistics Pvt Ltd., Ludhiana

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

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