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Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
Before: SHRI PRAMOD KUMAR & SHRI RAVISH SOOD
ORDER PER RAVISH SOOD, J.M: The captioned appeals filed by the revenue are directed against the respective orders passed by the CIT(A)-47, Mumbai, for A.Y. 2012-13 and A.Y. 2014-15, which in turn arises from the respective orders passed by the A.O u/s 271(1)(c) of the Act, dated 27.03.2019. As a common issue is involved in the present appeals, therefore, the same are being taken up and disposed off by way of a consolidated order. We shall first take up the appeal filed by the revenue for A.Y. 2012-13. The revenue has assailed the impugned order on the following grounds before us:
“Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) was justified in deleting the penalty of Rs.82,35,693/- levied on account of bogus loan and interest paid on bogus loans without appreciating the fact that the deletion of such quantum addition has not been accepted by the Department and an appeal is preferred & 1977/Mum/2020 A.Ys. 2012-13 & 2014-15 2 ACIT, CC-1(3) Vs. M/s Pabal Housing Pvt.Ltd. to Hon‟ble High Court against deletion of such quantum addition which is pending for adjudication.”
Briefly stated, the assessee company had filed its return of income for A.Y. 2012-13 on 28.09.2012, declaring a total income of Rs.6,09,830/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s 143(2) of the Act.
Assessment was framed by the A.O vide his order passed u/s 143(3), dated 30.03.2015, wherein the income of the assessee company was assessed at Rs.2,48,39,580/- after making the following additions:
Sr. No. Particulars Amount 1. Addition of bogus loans Rs.2,40,00,000/- 2. Addition on interest of bogus loans Rs.1,37,750/- 3. Addition on commission paid of bogus loans Rs.92,000/-
Thereafter, the A.O vide his order passed u/s 271(1)(c) r.w.s 274, dated 27.03.2019 imposed a penalty of Rs.82,35,693/- on the assessee.
Aggrieved, the assessee assailed the order passed by the A.O u/s 271(1)(c) , dated 27.03.2019.
Aggrieved, the assessee assailed the order passed by the A.O u/s 271(1)(c), dated 27.03.2019 in appeal before the CIT(A). Observing, that the additions/disallowances that were made by the A.O had been vacated by the Tribunal, the CIT(A) deleted the penalty that was imposed by him u/s 271(1)(c) of the Act.
The revenue being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. It was submitted by the ld. A.R that as the impugned additions qua which the penalty was imposed by the A.O u/s 271(1)(c) of the Act & 1977/Mum/2020 A.Ys. 2012-13 & 2014-15 3 ACIT, CC-1(3) Vs. M/s Pabal Housing Pvt.Ltd.
had been vacated by the Tribunal, therefore, the CIT(A) has rightly deleted the penalty that was imposed by the A.O u/s 271(1)(c) of the Act.
Per contra, the ld. Departmental Representative (for short „D.R‟) relied on the order of the A.O. It was submitted by the ld. D.R that the order passed by the Tribunal in the quantum appeal of the assessee had not been accepted by the department and have been assailed before the Hon‟ble High Court. However, the ld. D.R could not rebut the fact that the impugned additions as regards which the penalty was imposed by the A.O u/s 271(1)(c) of the Act had been deleted by the Tribunal.
We have heard the ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material available on record. As stated by the ld. A.R, and rightly so, now when the impugned addition that had found the very basis for imposing penalty u/s 271(1)(c) of the Act had been vacated by the Tribunal, vide its order passed in dated 03.05.2019, therefore, the consequential penalty imposed by the A.O cannot survive on a standalone basis and has to meet the same fate. On a perusal of the order of the CIT(A), we find that he had after taking cognizance of the fact that the impugned additions had been vacated by the Tribunal struck down the the penalty imposed by the A.O under Sec. 271(1)(c) of the Act, observing as under:
“I have gone through the submission, order of the Hon‟ble ITAT and facts on record. It is clear that the addition/disallowance in respect of unsecured loans, interest and commission has been duly deleted by the ITAT. The relevant part of the order is already reproduced in the above submission. Therefore, once the quantum additions has been deleted, the penalty has no legs to stand and has become unsustainable in law. In the backdrop of the aforesaid facts finding no infirmity in the view taken by the CIT(A), we uphold his order.
The appeal filed by the revenue is dismissed. & 1977/Mum/2020 A.Ys. 2012-13 & 2014-15 4 ACIT, CC-1(3) Vs. M/s Pabal Housing Pvt.Ltd. A.Y. 2014-15 11. As the facts and the issue involved in the present appeal remains the same as were there before us in the appeal of the revenue for A.Y.2012-13 in , therefore, our order therein passed shall apply mutatis mutandis for the purpose of disposing off the present appeal. Accordingly, on the same terms the present appeal filed by the revenue being devoid and bereft of any merit is dismissed.