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Income Tax Appellate Tribunal, DELHI BENCH: ‘G’: NEW DELHI
Before: SMT. DIVA SINGH & SHRI ANADEE NATH MISSHRA
(A) This appeal has been filed by the assessee against the impugned appellate order dated 27.02.2019 passed by Learned Commissioner of Income Tax (Appeals)-28, New Delhi [in short, “Ld.CIT(A)”] pertaining to Assessment Year 2011-12. The Assessee has raised following grounds of appeal:-
“1. That on the facts and circumstances of the case, the Ld. AO has erred both in law and on facts in levying penalty u/s 271(1)(c) amounting to Rs. 16,19,522/-.
1.1 The Ld. AO has erred in law in not following the decision of Hon’ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. (2010) 2010 322 ITR 158. Page 1 of 5
ITA No.- 2546/Del/2019. Torrence Capital Advisors Pvt. Ltd. 2. That the Ld. AO has erred both in facts and in law in concluding that the Appellant had furnished inaccurate particulars of income and also concealed particulars of income.
2.1 That the Ld. AO failed to appreciated that the Appellant has not failed to offer an explanation.
2.2 That the Ld. AO failed to appreciate that the Appellant has not even failed to substantiate the explanation.
That the notice dated 31.03.2014 for initiation of penalty u/s 271(1)(c) read with Section 274 of the I.T. Act 1961 is ambiguous and vague.
3.1 That the ld. AO has not specified under which limb of section 271(1)(c) of the Act, the penalty proceedings has been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars.
3.2 That the impugned notice specified both limb of section 271(1)(c) i.e. furnishing of inaccurate particulars of income as well as concealment of income have been mentioned.
3.3 The Ld. AO has erred in law in not following the decision of Hon’ble Supreme Court in the case of SSA’s Emerald Meadows (CC No. 11485/2016) while imposing the penalty.
The appellant craves leave to add to or alter, by deletion, substitution or otherwise, any or all of the foregoing grounds of appeal at or before the hearing, and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing.”
(B) Assessment Order dated 31.03.2014 was passed by the Assessing Officer (“AO”, for short) under section 143(3) of Income Tax Act, 1961 (“I.T. Act”, for short); wherein expenses totaling Rs. 52,41,171/- were disallowed and added to the assessee’s income.
Thereafter, penalty U/s 271(1)(c) of I.T. Act was also levied by the Assessing Officer vide order dated 27.03.2018, amounting to Rs. 16,19,522/- in respect of the aforesaid disallowances / additions totaling Rs. 52,41,171/-. Vide separate appellate orders dated 28.05.2016 and 27.02.2019 respectively, the Ld. CIT(A) confirmed the aforesaid
ITA No.- 2546/Del/2019. Torrence Capital Advisors Pvt. Ltd. disallowances/ additions totaling Rs. 52,41,171/- and penalty amounting to Rs.
16,19,522/-. The present appeal before Income Tax Appellate Tribunal (“ITAT”, for short) has been filed by Assessee against the aforesaid order dated 27.02.2019 whereby Ld. CIT(A) confirmed the penalty. During appellate proceedings in ITAT, a copy of order dated 03.02.2020 of Co-ordinate Bench of ITAT, Delhi was filed from the assessee’s side, passed in assessee’s own case in for Assessment Year 2011-12 whereby the aforesaid disallowances / additions totaling Rs. 52,41,171/- was deleted.
(C) At the time of hearing before us, the learned Authorized Representative (“Ld.
AR”, for short) of the assessee submitted that the penalty levied U/s 271(1)(c) of I.T.
Act should be deleted too, as the corresponding quantum addition has already been deleted by ITAT vide aforesaid order dated 03.02.2020. The learned Senior Departmental Representative (“Ld. Sr. DR”, for short] appearing for Revenue also agreed that aforesaid penalty amounting to Rs. 16,19,522/- cannot survive when corresponding quantum additions amounting to aforesaid Rs. 52,41,171/- have already been deleted by ITAT. In view of the foregoing, and as both sides agree, we are of the view that aforesaid penalty U/s 271(1)(c) I.T. Act amounting to Rs. 16,19,522/- levied by AO, and confirmed by the Ld. CIT(A); has no legs to stand when the corresponding additions made by the AO have already been deleted by ITAT vide its aforesaid order dated 03.02.2020. When the quantum addition does not survive, the penalty levied U/s 271(1)(c) of I.T. Act on the corresponding quantum addition also cannot survive. We take support from judicial precedent in the case of K.C. Builders vs. ACIT 135 Taxman
ITA No.- 2546/Del/2019. Torrence Capital Advisors Pvt. Ltd. 461 (SC), in which the Hon’ble Apex Court held that where the additions made in the Assessment Order, on the basis of which penalty for concealment was levied, are deleted, there remains no basis at all for levying the penalty for concealment, and therefore, in such a case, no such penalty can survive and the same is liable to be cancelled. Accordingly, we set aside the aforesaid orders dated 27.02.2019 and 27.03.2018 of Ld. CIT(A) and AO respectively, and we cancel the aforesaid penalty amounting to Rs. 16,19,522/-.
(D) In the Result, appeal of Assessee is allowed.
Our decision was orally pronounced in Open Court-Room immediately after conclusion of hearing on 04.03.2020. This written order is pronounced in Open Court on 05/03/2020.