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Facts
The assessee's total income was assessed at Rs.1,55,70,340/-. The CIT(A) partly allowed the appeal, deleting an addition of Rs.1,36,00,000/- and sustaining Rs.5,78,000/-. Consequently, a penalty of Rs.89,301/- was imposed based on the sustained addition. The assessee appealed to the CIT(A) again, who confirmed the penalty. The assessee then appealed to the Tribunal.
Held
The Tribunal noted that the addition of Rs.5,78,000/-, on which the penalty was based, had already been deleted by the ITAT in a separate order. Therefore, the penalty could not be sustained. The Tribunal set aside the order of the CIT(A) and deleted the penalty.
Key Issues
Whether the penalty sustained by the CIT(A) for under-reporting of income is valid when the basis for that addition has been deleted by the ITAT in a separate appeal.
Sections Cited
143(3), 270A, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH ‘A’, LUCKNOW
Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA
2017-18 against impugned appellate order dated 30/09/2024 (DIN & Order No.ITBA/NFAC/S/250/2024-25/1069248774(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. The grounds of appeal are as under:
“1. The Commissioner of Income Tax (Appeal) has erred in law and on facts in passing the order which is illegal, improper and against the principles of natural justice.
The Commissioner of Income Tax (Appeal) has erred in law and on facts in passing the order without giving adequate opportunity of being heard.
The Commissioner of Income Tax (Appeal) has erred in law and on facts in confirming the penalty of Rs.89,301/- u/s 270A imposed by Ld. Assessing Officer.
The Commissioner of Income Tax (Appeal) has erred in law and on facts in passing appellate order which is contrary to the facts and law.”
(B) The facts of the case, in brief, are that in this case assessment order dated 30/12/2019 was passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (“I. T. Act” for short) whereby the assessee’s total income was assessed at Rs.1,55,70,340/-. The assessee’s appeal against the aforesaid assessment order was partly allowed by learned CIT(A) wherein an addition amounting to Rs.1,36,00,000/- was deleted and the remaining addition of Rs.5,78,000/- was sustained. Thus, the assessee’s appeal was partly allowed by the learned CIT(A). On the basis of the order passed by the learned CIT(A), the Assessing Officer initiated penalty proceedings for under reporting the income of Rs.5,78,000/- and imposed penalty of Rs.89,301/-. Aggrieved, the assessee carried the matter in appeal before the learned CIT(A), who confirmed the penalty. Now the assessee is in appeal before the Income Tax Appellate Tribunal.
(C) During the course of appellate proceedings before Income Tax Appellate Tribunal, the learned authorized representative for the assessee submitted that the addition of Rs.5,78,000/- confirmed by the learned CIT(A) has already been deleted by Income Tax Appellate Tribunal, Lucknow vide order dated 30/12/2024 in therefore, the penalty does not survive and the same may be deleted.
(D) We have heard the rival parties and have gone through the material placed on record. We noted that penalty sustained by the CIT(A) was in respect of addition of Rs.5,78,000/-. Since, the aforesaid addition, amounting to Rs.5,78,000/-, on the basis of which the penalty has been imposed, has been deleted by Income Tax Appellate Tribunal, vide order dated 30/12/2024 in there remains no disallowance of the additions in respect of which the penalty u/s.271(1)(c) can be sustained. Accordingly we set aside the order of the CIT(A) and delete the penalty amounting to Rs.89,301/- imposed u/s.270A of the Act.
(E) In the result, the appeal of the assessee is allowed.
(Order pronounced in the open court on 15/01/2025)