DY CIT-3(2)(1), MUMBAI vs. M/S MANUGRAPH INDIA LTD., MUMBAI

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ITA 22/MUM/2021Status: DisposedITAT Mumbai07 December 2021AY 2008-092 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 related quantum additions, which formed the basis for the penalty, were deleted by a co-ordinate bench and this decision was upheld by the High Court, the penalty could not survive. The pendency of an SLP before the Supreme Court did not alter the current legal position.

What were the facts?

The Assessing Officer appealed the deletion of a penalty imposed under Section 271(1)(c) for the assessment year 2008-09. The penalty was related to alleged inaccurate particulars furnished by the assessee regarding interest and corporate guarantee.

What were the issues?

Whether a penalty under Section 271(1)(c) can be sustained when the underlying additions forming its basis have been deleted. The impact of a pending SLP on the validity of the penalty.

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, MUMBAI “B” BENCH, MUMBAI

1.

By way of this appeal, the Assessing Officer has challenged the correctness of the order dated 29.10.2020, passed by the CIT(A)-57, Mumbai, in the matter of penalty u/s.271(1)(c) of the Income Tax Act, 1961, for the assessment year 2008-09 on the following grounds:

1. "Whether on the fact and circumstances of the case, the Ld.CIT(A) erred in deleting the penalty of Rs.1,34,34,378/- u/s.271(1)(c) without appreciating the fact that the assessee had furnished inaccurate particulars of income in respect of the issues pertaining to charging interest and providing corporate guarantee and also that the same are subject matter of SLP filed by the department is pending before the Hon'ble Supreme Court?

2. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of Assessing Officer be restored.

Assessment Year: 2008-09 Page 2 of 3 2. When this appeal was called for hearing, the learned counsel for the assessee invited our attention to the fact that the related quantum additions, in respect of which the impugned penalty is imposed, stand deleted by a decision of the co-ordinate bench. The view so taken by the co-ordinate bench has been approved by the Hon’ble Jurisdictional High Court as well. It is submitted that in this view of the matter, the conclusion arrived at by the learned CIT(A) cannot be faulted.

3.

The learned Departmental Representative does not dispute the submissions made by the assessee, but relies upon the stand of the Assessing Officer nevertheless.

4.

In view of the above factual position and in view of the fact that the related quantum addition do not survive any longer, the conclusion arrived at by the learned Commissioner cannot indeed be faulted. The very foundation of the impugned penalty ceases to hold good in law. The mere fact that an SLP is pending before the Hon'ble Supreme Court does not affect the position as it exists now, and that is what really matters. We, therefore, confirm the conclusion arrived at by the learned CIT(A) and decline to interfere in the matter.

5.

In the result, the appeal filed by the Revenue is dismissed. Pronounced in the open court today on the 7th day of December, 2021.

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