DCIT, CIRCLE-7(2)(2), MUMBAI vs. M/S. MULLEN LINTAS PVT. LTD., MUMBAI

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ITA 948/MUM/2019Status: DisposedITAT Mumbai06 October 2020AY 2005-063 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the quantum addition on which the penalty was levied had already been deleted by the Tribunal, the penalty would have no basis. Therefore, the deletion of penalty by the CIT(A) was justified.

What were the facts?

The assessee company had its name changed multiple times. For AY 2005-06, the assessment was completed with an addition for undisclosed commission income. A penalty was levied on this addition.

What were the issues?

Whether the penalty levied under Section 271(1)(c) is sustainable when the underlying addition 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, VIRTUAL COURT

For Appellant: Shri Prakash Jothwani
For Respondent: Shri Avaneesh Tiwari, Shri Prakash Jothwani
Hearing: 24/09/2020Pronounced: 06/10/2020

आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in A.Y.2005-06 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-13, Mumbai in appeal No.CIT(A)-13/ITO-7(1)(2)/77/2018-19 dated 03/09/2018 (ld. CIT(A) in short) in the matter of imposition of penalty u/s.271(1)(c) of the Income Tax Act, 1961.

2.

The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in deleting the penalty levied in the sum of Rs.1,19,65,748/- u/s.271(1)(c) of the Act in the facts and circumstances of the case.

3.

We have heard rival submissions and perused the materials available on record. We find that assessee was originally known as M/s.SSC & B Lintas P. Ltd. and the name was subsequently changed to M/s. Pickle Advertising P. Ltd., The assessee once again changed its name to M/s. Linen Advertising and Communications Pvt. Ltd., Subsequently, the assessee had again changed its name to M/s. Mullen Lintas P. Ltd. The return of income for the A.Y.2005-06 was filed by the assessee on 28/10/2005 declaring total loss of Rs.4,63,89,950/- and assessment was completed u/s.143(3) of the Act on 27/12/2007 determining total income at Rs.17,29,050/-, wherein an addition in respect of undisclosed commission income was made to the extent of Rs.3.27 Crores. We find that the ld. AO had also levied penalty in the sum of Rs.1,19,65,748/- u/s.271(1)(c) of the Act in respect of this addition. We find that the quantum addition of Rs.3.27 Crores had been deleted by this Tribunal in dated 21/06/2017 which was followed by the ld. CIT(A) while deleting the penalty in the instant case. Since the quantum addition has been deleted, the penalty levied on such addition would have no legs to stand. Hence, we do not find any infirmity in the order of ld. CIT(A) deleting the penalty. Accordingly, the ground raised by the revenue is dismissed.

4.

In the result, appeal of the revenue is dismissed.

Order pronounced on 06/10/2020 by way of proper mentioning in the notice board.

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