ACIT, NCC-1, MADURAI vs. M/S. THE VIKAS ACADEMY, MADURAI

This is an appeal filed by the Revenue against the order of the learned Commissioner of Income Tax (Appeals)-1, Madurai in dated 18.10.2019 for the Assessment Year 2009-10 against the deletion of the penalty levied u/s.271(1)(c) of the Income Tax Act, 1961.

Ms. Anitha, JCIT represented on behalf of the Revenue and Mr. B. Ramakrishnan, Chartered Accountant represented on behalf of the Assessee.

It was submitted by the learned Departmental Representative that an addition had been made in the course of the assessment by invoking the provisions of Section 45(4) of the Income Tax Act, 1961 in respect of the transfer of the shares of the out-going partner. It was a submission that the issue had been taken by the assessee in appeal before the learned Tribunal which had held the issue in favour of the Revenue. It was further a submission that the assessee had filed a Tax Case Appeal No.716/2015 which came to be disposed of by the Hon’ble Jurisdictional High Court of Madras vide order dated 16.09.2019, wherein the issue had been held in favour of the assessee. It was a submission that consequent to the decision of the Hon’ble Jurisdictional High Court of Madras in the case of the assessee for the relevant assessment year deleting the addition, the learned Commissioner of Income Tax (Appeals) had deleted the penalty levied vide his order dated 08.10.2019. It was a submission by the learned Departmental Representative that the Revenue has not accepted the order of the Hon’ble Jurisdictional High Court in the Tax Case Appeal No.716/2015 and the appeal has been 3 -: preferred before the Hon’ble Supreme Court. It was a submission that the order of the learned Commissioner of Income Tax (Appeals) was liable to be reversed.

In reply, the learned Authorized Representative submitted that the quantum addition has been deleted by the Hon’ble Jurisdictional High Court in the Tax Case Appeal referred to above in the assessee’s own case. It was a submission that consequently the penalty as levied is liable to be deleted and the learned Commissioner of Income Tax (Appeals) has rightly done so. The learned Authorized Representative vehemently supported the order of the learned Commissioner of Income Tax (Appeals).

We have considered the rival submission and perused the materials available on record.

A perusal of the order of the Hon’ble Jurisdictional High Court in the assessee’s own case in the Tax Case Appeal No.716/2015 dated 16.09.2019 shows that the Hon’ble Jurisdictional High Court has followed its earlier order in the case of National Company Vs. Assistant Commissioner of Income Tax in Tax Case Appeal Nos.365 & 366 of 2009 dated 08.04.2019 and has held the issue in respect of the transfer contemplated u/s.45(4) of the Income Tax Act, 1961 in favour of the 4 -: assessee. A perusal of the order of the learned Commissioner of Income Tax (Appeals) shows that he has considered the fact that the quantum addition has been deleted by the Hon’ble Jurisdictional High Court in the assessee’s own case for the relevant assessment year and as the quantum addition itself no more exists has deleted the penalty. This being so, we find no error in the order of the learned Commissioner of Income Tax (Appeals) which calls for any interference.

In the result, the appeal of the Revenue in I.T.A.No.56/Chny/2020 stands dismissed.