SIDDHESHWAR IRON AND STEEL PRIVATE LIMITED,SOLAPUR vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE - 2, SOLAPUR

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ITA 494/PUN/2018Status: HeardITAT Pune23 May 2022AY 2007-083 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?

Since the addition which formed the basis for the penalty was deleted by the Tribunal, the consequential penalty order cannot stand. Therefore, the penalty is ordered to be deleted.

What were the facts?

The Assessing Officer (AO) made an addition of Rs. 81,67,677/- on account of cessation of liability and imposed a penalty of Rs. 24,50,300/- under Section 271(1)(c). The assessee appealed the addition, and the Tribunal deleted it.

What were the issues?

Whether a penalty imposed under Section 271(1)(c) can be sustained when the underlying addition has been deleted by the appellate authority.

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, PUNE BENCH “B”, PUNE

Before: SHRI R.S. SYAL & SHRI S.S. VISWANETHRA RAVI

For Appellant: Shri K. Srinivasan
For Respondent: Shri M.G. Jasnani

आदेश / ORDER PER R.S. SYAL, VP : This appeal by the assessee is directed against the order dated 25-01-2018 confirming the penalty of Rs.24,50,300/- imposed by the Assessing Officer (AO) u/s.271(1)(c) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2007-08. 2. We have heard the rival submissions and gone through the relevant material on record. It is seen that the AO made the addition of Rs.81,67,677/- on account of cessation of liability. Thereafter, the penalty was imposed on such income vide his order

1.

Siddheshwar Iron and Steel Pvt. Ltd., dated 28-03-2016. The addition was challenged by the assessee before the Tribunal in quantum proceedings. Vide order dated 12-07-2017, the Tribunal in (copy placed at page 3 onwards of the paper book) has deleted the addition of Rs.81,67,677/-. While giving effect to the Tribunal order, the AO, in his order dated 07-11-2017, has reduced the total loss by excluding the relief of Rs.81.67 lakh allowed by the Tribunal.

Since the very foundation of the penalty, being, the addition of Rs.81.67 lakh stands deleted by the Tribunal and no material has been placed before the Tribunal to indicate that the said order has been reversed/modified in any manner by the Hon’ble High Court, it is held that the consequential penalty order cannot stand. We, therefore, order to delete the penalty.

3.

In the result, the appeal is allowed. Order pronounced in the Open Court on 23rd May, 2022.

Sd/- Sd/- (S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; �दनांक Dated : 23rd May, 2022 Satish

Siddheshwar Iron and Steel Pvt. Ltd.,

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