DCIT, CIRCLE-1(1)(1), AHMEDABAD, AHMEDABAD vs. APRAAVA RENEWABLE ENERGY PVT LTD, AHMEDABAD
Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI NARENDRA PRASAD SINHA
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Department against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”),
National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated
03.09.2024 passed for A.Y. 2015-16. 2. The Department has taken the following grounds of appeal:-
“1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the penalty levied of Rs. 14,81,55,612/- @ 100% of the tax sought to be evaded u/s 271(1)(c) of the Act, without appreciating the fact that the assessee furnished inaccurate particulars?
The appellant craves leave to amend or alter any ground or add a new grounds, which may be necessary.” Asst. Year –2015-16 - 2–
The brief facts of the case are that the assessee is a private limited company engaged in the business of generation of power. During the course of assessment, the Assessing Officer made a disallowance of expenditure of forward cover premium of Rs. 43,58,80,000/- by invoking the provisions of Section 37 of the Act. The Assessing Officer also initiated penalty proceedings under Section 271(1)(c) of the Act for furnishing of inaccurate particulars. The disallowance made by the Assessing Officer under Section 37 of the Act was confirmed by Ld. CIT(A) vide order dated 27.08.2019. Subsequently, the Assessing Officer levied penalty under Section 271(1)(c) of the Act on the assessee for a sum of Rs. 14,81,55,612/- @ 100% of the tax sought to be evaded.
In appeal, before Ld. CIT(A), the assessee submitted that the ITAT Ahmedabad in ITA No. 1110/Ahd/2018 and ITA No.2. 1605 & 1606/Ahd/2019 vide order dated 31.08.2022 has allowed the appeal of the assessee on this issue and the quantum additions on account of forward cover premium of Rs. 43,58,80,000/- have been deleted by ITAT. The assessee also submitted the copy of order of ITAT before Ld. CIT(A) for his perusal. Accordingly, the assessee submitted before Ld. CIT(A) that when the quantum additions have been deleted by ITAT, Ahmedabad, then the consequent penalty cannot be levied under Section 271(1)(c) of the Act and the same is liable to be deleted.
In light of the above submissions, Ld. CIT(A) deleted the additions in the hands of the assessee with the following observations:
“5. The appellant has submitted the copy of the Hon’ble ITAT’s order and stated that this issue has been decided in favour of the appellant by the Hon’ble ITAT. As the ITAT has allowed
Asst. Year –2015-16
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the appeal of the appellant, the penalty levied u/s 271(1)(c) of the IT Act by the AO on the disallowance of expenditure made u/s 37(1) of the IT Act is not maintainable. Hence, the AO is directed to delete the penalty levied u/s 271(1)(c) of the IT Act. The grounds taken are allowed.
As a result, the appeal is allowed.”
The Department is in appeal before us against the aforesaid order passed by Ld. CIT(A), deleting the penalty levied by the Assessing Officer under Section 271(1)(c) of the Act.
On going through the facts of the instant case, we observe that it is a well settled law that once the quantum additions have been deleted on the basis of which penalty had been imposed under Section 271(1)(c) of the Act, then penalty is also liable to be deleted, since the very basis of imposition of penalty has been vacated.
Accordingly, we find no infirmity in the order of Ld. CIT(A), so as to call for any interference.
In the result, the appeal of the Department is dismissed. This Order is pronounced in the Open Court on 23/04/2025 (NARENDRA P. SINHA) JUDICIAL MEMBER Ahmedabad; Dated 23/04/2025
TANMAY, Sr. PSआदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to :
अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file.
आदेशानुसार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt.