M/S. DHARAMPAL SATYAPAL SONS (P) LTD.,NEW DELHI vs. DCIT, CENTRAL CIRCLE-29, NEW DELHI

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ITA 5250/DEL/2017Status: DisposedITAT Delhi24 June 2020AY 2010-114 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the quantum addition order was set aside by the ITAT, no penalty could be levied at that stage. The penalty orders were set aside, and the AO was at liberty to initiate penalty proceedings after passing a fresh assessment order.

What were the facts?

The Assessing Officer made an addition for disallowance of expenditure on education and levied penalty under section 271(1)(c). The CIT(A) confirmed the penalty. The assessee appealed against the quantum addition, and the ITAT had set aside the quantum addition order to the file of the AO.

What were the issues?

Whether penalty under section 271(1)(c) is leviable when the underlying quantum addition has been set aside by the Tribunal.

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, DELHI BENCHES “B” : DELHI

Before: SHRI BHAVNESH SAINI & SHRI O.P. KANT

Hearing: 24.06.2020Pronounced: 24.06.2020

ORDER PER BHAVNESH SAINI, J.M.

This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-30, New Delhi, Dated 01.06.2017, for the A.Y. 2010-2011, challenging the levy of penalty under section 271(1)(c) of the I.T. Act, 1961.

2 ITA.No.5250/Del./2017 M/s. Dharampal Satyapal Sons (P) Ltd., New Delhi. 2. We have heard the Learned Representatives of both the parties through video conferencing and perused the material on record.

3.

In this case, A.O. made an addition of Rs.25,89,354/- on account of disallowance of expenditure spent on education of Shri Chitresh Gupta. The A.O. vide separate Order Dated 10.03.2016 levied the penalty under section 271(1)(c) of the I.T. Act on the impugned addition. The Ld. CIT(A) confirmed the levy of penalty.

4.

Learned Counsel for the Assessee, at the outset, submitted that the assessee preferred appeal against the quantum addition before ITAT, Delhi B-Bench, New Delhi in ITA.No.5918/Del./2014, for the A.Y. 2010-2011, whereby the issue on merit have been restored to the file of the A.O. vide Order Dated 09.11.2017. Copy of the Order is placed on record. He has, therefore, submitted that penalty at this stage is not leviable because the quantum Order have been set aside by the Tribunal.

3 ITA.No.5250/Del./2017 M/s. Dharampal Satyapal Sons (P) Ltd., New Delhi. 5. The Ld. D.R. merely relied upon the Orders of the authorities below.

6.

After considering the rival submissions, we are of the view that penalty is not leviable at this stage. Since the ITAT, Delhi B-Bench, New Delhi (supra), has set aside the Orders of the authorities below for verification of the issue to the file of A.O. vide Order Dated 09.11.2017, therefore, nothing left for the authorities below to levy the penalty against the assessee at this stage. We, therefore, set aside the Orders of the authorities below and cancel the penalty. The A.O. is, however, at liberty to initiate the penalty proceedings in accordance with Law, if so advised, after passing the assessment order afresh as per Law.

7.

In the result, appeal of Assessee allowed.

Order pronounced in the open Court.

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