ACIT, NEW DELHI vs. M/S HAVELLS INDIA LTD, NEW DELHI

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ITA 6416/DEL/2015Status: DisposedITAT Delhi18 November 2020AY 2008-094 pages

In favour of the Revenue: the Revenue's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since all the quantum additions made by the Assessing Officer were deleted, the penalty levied under Section 271(1)(c) does not survive. Therefore, the revenue's appeal is allowed.

What were the facts?

The revenue filed an appeal against the CIT(A)'s order reducing a penalty imposed under Section 271(1)(c). The penalty was levied on additions made by the Assessing Officer. However, all the quantum additions on which the penalty was based were subsequently deleted by the ITAT.

What were the issues?

The primary issue was whether a penalty under Section 271(1)(c) can be sustained when the underlying additions to income have been deleted.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI

Before: Sh. Amit ShuklaDr. B. R. R. Kumar

Hearing: 11.11.2020

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by the revenue against the order of the ld. CIT(A)-22, New Delhi dated 08.09.2015.

2.

Following grounds have been raised by the assessee: “1. On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in reducing the penalty u/s 271(1)(c) of the I.T, Act, 1961 to Rs.1,35,900/- as against penalty of Rs. 3,86,00,000/- imposed by the AO.

2. On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in reducing the penalty u/s 271(1)(c) of the I.T.Act, 1961 to Rs. 1,35,900/- as against penalty of Rs.

2 Havells India Ltd. 3,86,00,000/- imposed by the AO on the ground that some of the additions made were of debatable nature ignoring the fact that the assessee had not provided any evidence in support of its explanation.

3.

On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in reducing the penalty u/s 271(1)(c) of the I.T. Act, 1961 to Rs.1,35,900/- as against penalty of Rs. 3,86,00,000/- imposed by the AO ignoring the fact that in view of Explanation 1 to section 271(1) of the I.T. Act, 1961 the onus is on the assessee to show by cogent and reliable evidence that there was no concealment of income and which the assessee has failed to do.

4. On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in reducing the penalty u/s 271(1)(c) of the I.T. Act, 1961 to Rs.1,35,900/- as against penalty of Rs. 3,86,00,000/- imposed by the AO on the ground that some of the additions made were of legal nature ignoring the fact that the assessee had not provided any evidence in support of its explanation that wrong application of law by it was bona-fide.

5.

On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in reducing the penalty u/s 271(1)(c) of the I.T. Act, 1961 to Rs.1,35,900/- as against penalty of Rs. 3,86,00,000/- imposed by the AO ignoring the ratio of decision of the Hon'ble Supreme Court in the case of MAK Data Pvt. Ltd. vs. CIT (2013) 358 ITR 593 (SC) wherein it has been held that even voluntary disclosure does not release the assessee from the mischief of penal proceedings.

3 Havells India Ltd. 6. The appellant craves leave to, add to, alter, amend or vary from the above grounds of appeal at or before the time of hearing.”

2. In this case, penalty u/s 271(1)(c) has been levied on the additions made by the Assessing Officer under various heads viz. disallowance u/s 40(a)(ia), disallowance of provision for sales incentives, disallowance of claim of deduction u/s 80IC, disallowance of exchange loss and addition made in respect of foreign exchange gains.

3. At the very outset, it was brought to our notice that the quantum additions made by the AO stands deleted by the order of the tribunal dated 10.11.2020 and hence, the penalty does not survive.

4. The facts have not been disputed by the Ld. DR. Since all the quantum additions stands deleted, we hereby hold that the penalty levied u/s 271(1)(c) do not survive at this juncture.

4.

The appeal filed by the revenue is allowed.

Order Pronounced in the Open Court on 18/11/2020.

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