BRIJ BALA,NEW DELHI vs. ITO, WARD-35(3), NEW DELHI

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ITA 6735/DEL/2018Status: DisposedITAT Delhi01 August 2019AY 2007-084 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 reassessment order, which was the basis for the penalty, was quashed, no penalty was leviable. Consequently, the penalty was cancelled.

What were the facts?

The Assessing Officer made an addition for unexplained investment in property and levied penalty. The assessee's appeal against the quantum addition was quashed by the ITAT because the reassessment proceedings were invalid.

What were the issues?

The primary issue was whether a penalty under Section 271(1)(c) could be levied when the underlying reassessment order was quashed. The validity of the reassessment proceedings was also a key consideration.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES “SMC”: DELHI

Before: SHRI BHAVNESH SAINI

Hearing: 17.07.2019Pronounced: 01.08.2019

This appeal by assessee has been directed against the order of Ld. CIT(Appeals)-12, New Delhi dated 16.07.2018 for AY 2007-08, challenging the levy of penalty u/s 271(1)(c) of the I.T. Act.

2.

In this case, AO passed the assessment order u/s 143(3)/147 of the Act dated 31.03.2015 making an addition of 2 ITA.No.6735/Del./2018 Rs. 24,27,863/- on account of unexplained investment in purchase of property. The AO levied the penalty u/s 271(1)(c) of the Act. The Ld. CIT(A) dismissed the appeal of assessee.

3.

Ld. Counsel for assessee submitted that assessee preferred appeal against quantum addition before ITAT ‘SMC’ Bench in for assessment year under appeal in which the Tribunal vide order dated 31.05.2019 quashed the reassessment proceedings. Copy of the order is placed on record and provided to the Ld. DR.

4.

After hearing both sides, I am of the view that no penalty is leviable in the matter. Since, reassessment order which is the basis of levy of penalty has been quashed. Therefore, nothing survives in favour of the Department to levy the penalty.

5.

I, accordingly, set aside the orders of the authorities below and cancel the penalty.

3 ITA.No.6735/Del./2018

6.

In the result, appeal of assessee is allowed.

Order pronounced in the open Court.

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