ACIT CENTRAL CIRCLE 3(1), CHENNAI vs. SASIKALA RAGHUPATHY, CHENNAI

This appeal filed by the Revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals) 19, Chennai, dated 26.11.2018 relevant to the assessment year 2008-09.

The appeal of the Revenue is delayed by 24 days in filing the appeal. The Department has filed a petition for condonation of delay in filing the appeal in the form of an Affidavit. We have gone through the Affidavit and find that the Department was prevented by sufficient cause for the delay in C.O. Nos. 53 & 59/Chny/2019 filing the appeal. Accordingly, the delay is condoned and the appeal is admitted for adjudication.

Brief facts of the case are that the assessee filed the original return of income under section 139(1) of the Income Tax Act, 1961 [“Act” in short] on 30.07.2008 declaring income of ₹.35,00,774/-. Subsequently, the assessment was reopened under section 147 of the Act accepting the returned income. Thereafter, the ld. PCIT initiated proceedings under section 263 of the Act. Meanwhile a search under section 132 of the Act was conducted on 18.02.2014. Considering the same, the proceedings under section 263 of the Act was dropped and proceedings under section 153A of the Act were initiated. The assessee filed return in response to the notice under section 153A and the assessment under section 143(3) r.w.s. 153A of the Act was completed by disallowing the exemption claimed under section 54F of ₹.46,19,92,974/- resulting in a tax demand of ₹.21,14,39,653/-. On appeal, the ld. CIT(A) confirmed the order passed by the Assessing Officer. Meanwhile, the Assessing Officer initiated penalty proceedings under section 271(1)(c) of the Act. After considering the submissions of the assessee, the Assessing Officer levied penalty under section 271(1)(c) of the Act of ₹.15,70,31,411/-. Against the penalty order, the assessee preferred an appeal before the ld. CIT(A). Since the quantum addition on account of assessment proceedings has been decided against the Revenue

Aggrieved, the Revenue is in appeal before the Tribunal. The ld. DR has submitted that the Department has not accepted the decision towards quantum addition and preferred an appeal before the Hon’ble Jurisdictional High Court against the order of the ITAT and pleaded for reversing the order passed by the ld. CIT(A).

On the other hand, the ld. Counsel for the assessee strongly supported the order of the ld. CIT(A).

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. It is an admitted fact that against the confirmation of quantum addition, the assessee preferred an appeal before the ITAT and vide its order in for the assessment year 2008-09 dated 16.10.2018, the Tribunal has directed the Assessing Officer to delete the addition. Since the addition on account of assessment proceedings has been decided against the revenue, the ld. CIT(A) has rightly held that the penalty proceedings which are in consequence of the assessment proceedings cannot stand and allowed the appeal filed by the assessee. The ld. DR could not controvert

In the result, the appeal of the Revenue is dismissed and the Cross Objections filed by the assessee are also dismissed.