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Facts
For AY 2011-12, an addition of ₹31,92,098, made under section 2(22)(e) by the AO, was deleted by a coordinate bench in quantum appeal, rendering the penalty grounds non-existent. For AY 2012-13, an addition of ₹9,72,899 under section 2(22)(e) was affirmed by the CIT(A).
Held
For AY 2011-12, the appeal was allowed as the penalty could not survive without a valid addition. For AY 2012-13, the matter was remanded to the CIT(A) to examine the case considering a similar issue for AY 2013-14, especially if the factual aspect is identical.
Key Issues
Whether penalty is sustainable when the addition on which it is based has been deleted. Propriety of addition on account of deemed dividend under Section 2(22)(e) for AY 2012-13.
Sections Cited
2(22)(e), 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 23/06/2025 Date of Order – 23/06/2025
O R D E R PER K.M. ROY, A.M.
These appeals by the assessee are against the impugned orders of even date 04/03/2025, passed by the learned Commissioner of Income Tax (Appeal), National Faceless Appeal Centre, Delhi, for the assessment year 2011–12 and 2012–13 respectively.
2 Thanjavur Commerce Pvt. Ltd. ITA no.290–291/Nag./2025 ./2025 Assessee’s Appeal – A.Y. – 2011–12
At the outset, both the parties have submitted that the Co– ordinate Bench of the Tribunal, vide order dated 15/05/2025, passed in the quantum appeal being ITA no.182/Nag./2016, has already deleted the addition of ` 31,92,098, as made by the Assessing Officer under section 2(22)(e) of the Income Tax Act, 1961 (for short "the Act") vide assessment order dated 28/02/2013, succeeded by rectification order dated 17/05/2013, passed under section 154 of the Act. Thus, the grounds of addition is no longer subsisting. As the foundation for levying of penalty has already been collapsed, consequently, no penalty would survive and, hence, deleted in entirety since in the absence of foundation, the structure is bound to collapse.
In the result, assessee’s appeal for the A.Y. 2011–12 is allowed.
./2025 Assessee’s Appeal – A.Y. – 2012–13
In the instant case, the learned CIT(A), vide impugned order, has affirmed the addition of ` 9,72,899, under section 2(22)(e) of the Act on account of deemed dividend towards loan received from Shri Agrawal Coal India Pvt. Ltd. On the contrary, the learned A.R. has submitted that the appeal was filed on 06/04/2015, in physical form and the assessee has furnished the submissions / evidences also in 3 Thanjavur Commerce Pvt. Ltd. ITA no.290–291/Nag./2025 the physical form but did not upload on ITBA portal erroneously presuming that the due and sufficient compliance has already been made by submitting relevant submissions / evidences in support of his claim in physical form. The assessee has also claimed that in the assessee’s own case for the assessment year 2013–14 decided on 10/12/2024, the then learned CIT(A)–3, Nagpur, also dealt with the issue involved in the instant case and ultimately deleted the addition of ` 21,94,858, under section 2(22)(e) of the Act deleted. The learned Departmental Representative did not refute the aforesaid factual aspect and prayed that the matter may need conscious examination by the learned CIT(A).
Heard the parties and perused the material on record and given our thoughtful consideration to the peculiar facts and circumstances of the case. As noted above that the assessee has duly filed its submissions and evidences in physical mode but not on ITBA portal. Therefore, we are inclined to remand the entire matter back to the file of the learned CIT(A) only for limited purpose to examine the case of the assessee with regard to the similarity of decision pertaining to the assessment year 2013–14 and on finding the factual aspect as identical, then to grant the relief consequently.
4 Thanjavur Commerce Pvt. Ltd. ITA no.290–291/Nag./2025
In the result, appeal filed by the assessee is allowed in aforesaid terms.
To sum up, both the appeals filed by the assessee are allowed. Order pronounced in the open Court on 23/06/2025