TARA MERCANTILE PVT. LTD.,NEW DELHI vs. ACIT, CIRCLE- 25(1), NEW DELHI

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ITA 5409/DEL/2019Status: DisposedITAT Delhi13 August 2019AY 2011-124 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?

The Tribunal held that since the addition on which the penalty was imposed has been deleted by the ITAT in the assessee's own case, the penalty cannot survive. Therefore, the penalty was deleted.

What were the facts?

The assessee's appeal is against a penalty order under Section 271(1)(c) of the Income Tax Act. The penalty was levied on an addition made in the assessment. The assessee argued that the addition itself was deleted by the ITAT in a previous quantum appeal.

What were the issues?

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

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, DELHI BENCH “I.2”, NEW DELHI

Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI

ORDER PER H.S. SIDHU : JM

This appeal by the Assessee is directed against the impugned order dated 01.5.2019 passed by the Ld. CIT(A)-9, New Delhi on the following grounds:-

1. That the Ld. CIT(A)-9, New Delhi has erred both in law and on facts in upholding penalty of Rs. 37,44,384/- in an order dated 1.5.2019 under section 271(1)(c) of the Act.

2. That the ld. CIT(A) has failed to appreciate that in absence of any specific show cause notice having been issued, the levy of penalty is otherwise wholly misconceived.

3. That furthermore that since no valid satisfaction was recorded in the order of assessment, penalty levied is otherwise was without jurisdiction.

4. That the Ld. CIT(A) has sustained the penalty by failing to appreciate that assessment proceedings are not conclusive and could not have proceeded to validly sustain the penalty as if it is quantum appeal.

5. That the Ld. CIT(A) has failed to appreciate that there was no specific charge in the penalty order and as such, penalty upheld is vitiated.

6. That the Ld. CIT(A) has failed to appreciate the factual matrix of the case of the appellant and evidence on record and conclusions thus drawn mechanically are wholly unjustified. It is therefore prayed that the penalty levied of Rs. 37,44,384/- u/s. 271(1)© of the Act and sustained by the Ld. CIT(A) may kindly be deleted and, appeal of the appellant company be allowed.

2.

Facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of convenience.

3.

At the time of hearing, Ld. Counsel of the Assessee, has stated that ITAT vide its order dated 12.7.2019 in quantum Appeal No. 1572/Del/2017 (AY 2011-12) has deleted the addition on which the penalty in dispute has been imposed. In this behalf he filed the copy of the Tribunal’s Order dated 12.7.2019 in assessee’s own case and he requested that penalty in dispute may be deleted.

4.

On the contrary, Ld. DR has not raised any serious objection on the request of the Ld. Counsel for the assessee.

5.

We have carefully considered the submissions and perused the records. We find that in assessee’s own case the ITAT vide its order dated 12.7.2019 in quantum appeal No. 1572/Del/2017 (AY 2011-12) has deleted the addition on which the penalty in dispute has been imposed, hence, the penalty in dispute will not survive. Accordingly, we delete the penalty in dispute in this appeal.

6.

In the result, the Appeal filed by the Assessee stands allowed.

Order pronounced in the Open Court on 13/08/2019.

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