DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 8, PUNE vs. EATON FLUID POWER LIMITED, PUNE

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ITA 84/PUN/2021Status: DisposedITAT Pune29 August 2022AY 2012-133 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the quantum addition itself was deleted by a co-ordinate bench of the Tribunal in the assessee's appeal, the penalty levied on that addition had no basis. Therefore, the CIT(A) was correct in deleting the penalty.

What were the facts?

The Revenue appealed against the deletion of a penalty levied under Section 271(1)(c) of the Income Tax Act. This penalty was related to a quantum addition of arm's length price adjustment for corporate service charges.

What were the issues?

Whether a penalty under Section 271(1)(c) can be sustained when the underlying addition on which it was based has been deleted.

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, “A”

Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE

For Appellant: Ms. Sumisha – AR
For Respondent: Shri Naveen Gupta – DR
Hearing: 11/08/2022Pronounced: 29/08/2022

ORDER

Per S.S.Godara, JM:

1.

This Revenue’s appeal for Assessment Year 2012-13 is directed against the Commissioner of Income Tax(Appeals)-6, Pune’s order dated 03.03.2020 passed in appeal no.PN/CIT(A)- 6/DCIT, Circle-8, Pune/10099/2017-18 in proceedings u/s.271(1)(c) of the Income Tax Act, 1961 [in short “the Act”].

Heard both the parties. Case file perused.

2.

Delay of 329 days in filing of the instant appeal instituted on 30.03.2021 at the Revenue’s behest is condoned since falling in Covid-19 pandemic outbreak period.

3.

Coming to merits of the Revenue’s sole substantive grievance raised herein that the CIT(A) has erred in law and on facts in A.Y. 2012-13 (R) M/s. Eaton Fluid Power Ltd., reversing the Assessing Officer’s action levying section 271(1)(c) penalty of Rs.2,39,77,900/-, we note at the outset that the same pertains to quantum addition of arms length price adjustment involving a sum of Rs.7,39,03,220/- in the nature of “corporate service charges” compounding quantum. The Revenue is very much fair in its first and foremost ground itself that this tribunal’s co- ordinate bench’s order in dated 19.02.2020 has deleted the same in assessee’s appeal. Meaning thereby that the impugned penalty has no legs to stand as on date in light of this clinching factual position.

4.

Faced with this situation, we conclude that the CIT(A) has rightly deleted the impugned penalty in light of the foregoing quantum developments. The Revenue’s instant sole substantive ground stands rejected therefore.

5.

This Revenue’s appeal is dismissed.

Order pronounced in the open Court on 29th August, 2022. (DR. DIPAK P. RIPOTE ACCOUNTANT MEMBER पुणे / Pune; "दनांक / Dated : 29th Aug, 2022/ SGR*

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