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Facts
The Revenue appealed against the CIT(A)'s order deleting a penalty of Rs. 90,37,276/- imposed on the assessee under Section 270A for Assessment Year 2018-19. The penalty was originally levied by the AO for under-reporting of income due to disallowance of notional interest and depreciation under Section 143(3). The Revenue's appeal before the Tribunal was filed with a delay of 45 days, which the Tribunal condoned.
Held
The Tribunal noted that the CIT(A) had already granted full relief to the assessee by deleting the quantum additions of interest and depreciation, which formed the basis of the penalty under Section 270A. The Ld. Sr. DR also conceded that since the quantum additions were deleted, the penalty was not sustainable. Thus, the Tribunal upheld the CIT(A)'s order deleting the penalty.
Key Issues
Whether the penalty imposed under Section 270A is sustainable when the underlying quantum additions on which it was based have been deleted by the CIT(A). Condonation of delay in filing the appeal by the Revenue.
Sections Cited
250, 270A, 253, 143(3), 274
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Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
order
: February 21st, 2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the Revenue is against the order of the Commissioner of Income Tax (Appeals)-20, Kolkata [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2018-19 dated 28.05.2024, which has been passed against the penalty order u/s 270A of the Act, dated 22.03.2022. None appeared on behalf of the assessee and the case was heard with the assistance of the Ld. Sr. DR.
In the aforesaid facts and circumstances the appellant/petition most humbly submits that due to unavoidable situation and circumstances, which were beyond the control of your petitioner, there is a delay in filing the instant appeal. It is humbly requested that such delay is unintentional and such delay may kindly be condoned by the Hon’ble ITAT, Kolkata and the instant appeal may be heard and the appeal be registered.
Your petition states that the last date to file this appeal was 28.07.2024 and as such, there is a total delay of 45 days in filing the instant appeal.
This application is made bonafide and for the interest of justice. Under the above facts and circumstances the appellant/petitioner most humbly prays that your Lordship may graciously be pleased to pass the following orders a. Delay 45 days in preferring the instant appeal be condoned and the aforesaid appeal be registered and restored to file and be heard on merit. b. Such other or further order or orders and/or direction or directions be given as this Hon’ble ITAT may be deem fit and proper. And for the act of kindness your petition as in duty bound shall ever pray.” 1.2. Considering the condonation application and the reasons stated therein, we are satisfied that the Ld. AO had a reasonable and sufficient cause and was prevented from filing the instant appeal within statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication on merits. 2. The revenue is in appeal before the Bench raising the following grounds of appeal:
1. That on the facts and circumstances of the case, the Ld. CIT(A) has erred on facts and in law in deleting the penalty imposed by AO of Rs. 84,83,453/- u/s. 270A of the Income Tax Act, 1961 on account of notional interest on unsecured loan.