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Facts
The assessee filed an appeal against the order of the CIT(A) confirming a penalty levied under Section 271(1)(c) of the Income Tax Act, 1961. The penalty was based on an addition made under Section 43CA for the Assessment Year 2016-17.
Held
The Tribunal noted that in the assessee's own case for the same Assessment Year, the ITAT had deleted the addition made under Section 43CA. Consequently, the penalty, which was consequential to the addition, was also held to be not maintainable.
Key Issues
Whether a penalty levied under Section 271(1)(c) is sustainable when the addition on which it is based has been deleted by the Tribunal.
Sections Cited
271(1)(c), 250, 43CA, 147, 148, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the assessee is against the order of ld.Commissioner of Income Tax(Appeals)[NFAC], passed under section 250 of the Income Tax Act, 1961, dated 20.09.2024 for Assessment Year 2016-17. The assessee has raised the following grounds of appeal :
1. The Commissioner of Income-tax (Appeal) (hereinafter referred to as the CIT(A) erred in confirming the penalty levied by AO of [A] Rs.11,95,791 under Section 271(1)(c) for furnishing inaccurate particulars of income.
The Appellant prays that the penalty levied by AO and confirmation thereof by CIT(A) be deleted.”
Submission of ld.AR : 2. Ld.AR appeared virtually. Ld.AR submitted that this is an appeal against the penalty order under section 271(1)(c) of the Act, dated 26.10.2021for A.Y.2016-17. Ld.AR submitted that the ITAT Pune in Assessee’s own case for A.Y.2016-17 in has deleted the additions made. Since the additions have been deleted, penalty is not maintainable.
Submission of ld.DR : 3. Ld.DR for the Revenue accepted that quantum addition has been deleted by ITAT Pune.
Findings & Analysis : 4. We have heard both the parties and perused the records. It is observed that the Assessing Officer has levied penalty u/s.27(1)(c) of the Act, with reference to addition of Rs.38,69,867/- made [A] u/s.43CA of the Act. On perusal of the ITAT order in ITA No.2424/PUN/2024(supra), the Tribunal held as under “ “15.………………… Since, admittedly in the instant case the assessee has received a part of the consideration as advance as per the agreement and the sale deeds were made on the basis of such agreement value, although the market price has gone up by that time, therefore, in view of the provisions of sub-section (3) and (4) of section 43CA of the Act, no addition is called for. In this view of the matter, the order of the Ld.CIT(A)/NFAC is set aside and the grounds raised by the assessee are allowed.” 4.1 Thus, ITAT has deleted the addition made for A.Y.2016-17. Therefore, the penalty does not have any legs to stand. Hence, the ld.Assessing Officer is directed to delete the penalty. Accordingly, grounds of appeal raised by the assessee are allowed.