EMAK GLASS FIBRE & ACCESSORIES PVT.LTD.,TIRUVALLUR vs. ITO, CORPORATE WARD-1(1), CHENNAI
आयकर अपीलीय अिधकरण, ‘बी’ यायपीठ, चे ई।
IN THE INCOME TAX APPELLATE TRIBUNAL
‘B’ BENCH: CHENNAI
ी एबी टी. वक
, ाियक सद एवं
एवं
एवं
एवं
ी जगदीश, लेखा सद के सम
BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER
आयकर अपील सं./ITA No.3290/Chny/2024
िनधारणवष/Assessment Year: 2015-16
M/s.Emak Glass Fibre &
Accessories Pvt. Ltd.,
SP-95, 12th Street,
11th Lane, Ambattur Indl. Estate S.O.
Tiruvallur-600 058. v.
The ITO
Corporate Ward-2(1),
Chennai.
[PAN: AAACE 6493 N]
(अपीलाथ/Appellant)
(यथ/Respondent)
अपीलाथ क ओर से/ Appellant by :
Mr.N. Arjun Raj, Advocate
(Virtual)
यथ क ओर से /Respondent by :
Ms.Gouthami Manivasagam,
JCIT
सुनवाईकतारीख/Date of Hearing
:
13.03.2025
घोषणाकतारीख /Date of Pronouncement
:
29.04.2025
आदेश / O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 27.08.2024 for the Assessment Year (hereinafter referred to as "AY”) 2015-16 confirming the M/s.Emak Glass Fibre & Accessories Pvt. Ltd.
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penalty levied by the AO u/s.271(1)(c) of the Income Tax Act, 1961
(hereinafter referred to as "the Act”).
The Ld. Counsel for the assessee submitted that there is a delay of ‘53’ days in filing of this appeal, because, assessee was prevented by reasons beyond his control and prayed for condonation of delay. Having gone through the contents of the application for condonation of delay, we find that there is excusable reason for the delay; and hence, we condone the delay of ‘53’ days and proceed to adjudicate the appeal on merits.
At the outset, the Ld.AR of the assessee submitted that the AO had levied penalty on two issues i.e. (i) disallowance made u/s.40(a)(ia) of the Act for non-deduction of TDS amount of Rs.10,89,292/- & (ii) disallowance of expenditure of Rs.3,30,250/-. According to the Ld.AR, the quantum assessment was challenged by the assessee before this Tribunal [in ITA No.52/Chny/2021 for AY 2014-15] wherein the Tribunal passed an order dated 22.09.2022 deleting the disallowance of Rs.10,89,292/- u/s.40(a)(ia) of the Act; and restricted disallowance of expenditure to the extent of 20% of it i.e. Rs.66,000/- out of addition of Rs.3,30,250/-. According to Ld AR, despite knowing about the decision of the Tribunal in the quantum assessment, the Ld.CIT(A) dismissed the appeal of the assessee against levy of penalty by passing a non-reasoned order. Be M/s.Emak Glass Fibre & Accessories Pvt. Ltd. :: 3 ::
that as it may, we find that the AO levied the penalty on two issues i.e. (i) disallowance made u/s.40(a)(ia) of the Act for non-deduction of TDS amounting to Rs.10,89,292/- & (ii) disallowance of expenditure of Rs.3,30,250/- and note that this Tribunal has deleted the disallowance of Rs.10,89,292/- made u/s.40(a)(ia) of the Act, therefore, the penalty levied in respect of this issue needs to be deleted on the principle given in legal maxim “sublato Fundmento Credit opus” meaning in case a foundation is removed, the super-structure falls. Coming to other disallowance of expenditure, which Tribunal is noted to have partly allowed the appeal of assessee by restricting the same to only
Rs.66,000/- i.e., estimated disallowance of 20% of Rs.3,30,250/-. Thus, only Rs.66,000/- has been confirmed by the Tribunal, while deciding the quantum appeal. In the light of discussion, it is noted that only the estimated disallowance of expenditure has been confirmed by this Tribunal while deciding the quantum appeal. Bearing in mind the fact that the related quantum addition was purely on estimated basis with inherent subjectivity involved, we are of the view that the penalty is not warranted u/s.271(1)(c) of the Act and also rely on the decision of the Hon’ble
Madras High Court in the case of CIT v. P. Rojes reported in [2013] 356
ITR 703 (Madras HC) wherein the Hon’ble High Court observed that since the levy of penalty is based on the estimation of income, there can’t be any imposition of penalty based on the estimation of income. Therefore,
M/s.Emak Glass Fibre & Accessories Pvt. Ltd.
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the penalty levied by the AO vide order dated 16.03.2022 to the tune of Rs.4,38,637/- is directed to be deleted.
4. In the result, appeal filed by the assessee is allowed.
Order pronounced on the 29th day of April, 2025, in Chennai. (जगदीश)
(JAGADISH)
लेखा सद /ACCOUNTANT MEMBER
(एबी टी. वक
)
(ABY T. VARKEY)
याियक सदय/JUDICIAL MEMBER
चे ई/Chennai,
!दनांक/Dated: 29th April, 2025. TLN
आदेश क ितिलिप अ$ेिषत/Copy to:
अपीलाथ/Appellant 2. थ/Respondent 3. आयकरआयु/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीयितिनिध/DR 5. गाड फाईल/GF