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Income Tax Appellate Tribunal, DELHI BENCH ‘G’ : NEW DELHI
Before: SHRI N.S. SAINI & SHRI KULDIP SINGH
PER KULDIP SINGH, JUDICIAL MEMBER : Since common questions of facts and law have been raised in both the aforesaid appeals, the same are being disposed off by way of consolidated order to avoid repetition of discussion. 2. The appellant, M/s. Amtrac Automobile India Pvt. Ltd. (hereinafter referred to as ‘the assessee’) by filing the present appeals, sought to set aside the impugned orders both dated 26.03.2015 passed by Ld. CIT (Appeals)-30, New Delhi qua the Assessment Years 2003-04 & 2004-05 confirming the penalties levied u/s 271(1)(c) of the Income- tax Act, 1961 (for short ‘the Act’) on the identical grounds inter alia that:-
“(1) That the order of the Authorities below is against law and facts of the case.
(2) That the Ld. Commissioner of Income Tax (Appeals)- 30 has erred in not accepting the assessee's contention that the penalty proceedings u/s 271(1)(c) are the independent proceedings .
(3) That the Ld. Commissioner of Income Tax (Appeals)- 30 has erred in concurring with the order of the authorities below and has further erred in confirming the penalty imposed U/S 271 (1)(c) (Rs.36,59,2501- & Rs.25,72,500/- for AYs 2003-04 & 2004-05 respectively) by not appreciating the facts of the case and also by not accepting the submission made by the assessee as per details below:- i) Whether the search was carried out at the premises of the assessee and also within the provisions of section 132 ? ii) Whether the search & seizure operation could be conducted in the absence of the assessee or his authorized representative and the same could be treated as valid search? iii) Whether in panchnama, the name of the assessee company was mentioned? iv) Whether any incriminating document was found during the course of search against the assessee? v) Whether the assessee is covered u/s 153A ?
(4) That the Ld. Commissioner of Income Tax (Appeals)- 30 has erred in not adjudicating the grounds taken by the assessee as mentioned above.
(5) That the Ld. Commissioner of Income Tax (Appeals)- 30 has erred in not accepting the submission made by the appellant to keep the appeal in abeyance as the quantum appeal is pending before Hon'ble ITAT 'A’ Bench, New Delhi.”
Briefly stated the facts necessary for adjudication of the controversy at hand are : On the basis of assessment completed under section 143(3)/153A of the Act, penalty proceedings were initiated in both the aforesaid cases on the ground that additions of Rs.70,00,000/- & Rs.1,00,00,000/- in AYs 2003-04 & 2004-05 respectively were made u/s 68 of the Act and consequently, AO proceeded to initiate penalty proceedings u/s 271(1)(c) of the Act for concealment of income with regard to the bogus share application money stated to have been received by the assessee. Declining the contentions raised by the assessee, AO proceeded to levy the penalties of Rs.36,59,250/- and Rs.25,72,500 in AYs 2003-04 & 2004-05 respectively.
Assessee carried the matter by way of appeals before the ld. CIT (A) who has confirmed the penalties by dismissing the appeals. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeals.
We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
At the very outset, it is brought to our notice by the ld. AR for the assessee that addition made in both the cases u/s 68 of the Act has since been deleted by the Tribunal in assessee’s own case in 2278 & 4742/Del/2012 vide order dated 28.04.2017 and as such, penalties levied are not sustainable and brought on record the copy of the order of the Tribunal dated 28.04.2017 (supra).
Undisputedly, coordinate Bench of the Tribunal vide order dated 28.04.2017 (supra) deleted the addition made u/s 68 of the Act. In these circumstances, the penalty levied by the AO and confirmed by ld. CIT (A) is not sustainable in view of the law laid down by the Hon’ble Apex Court in case cited as K.C. Builders & Anr vs. ACIT – 265 ITR 562 (SC) because “when the addition made in the assessment order on the basis of which penalty for concealment is levied have been deleted there remains no basis at all for levying the penalty for concealment and in such case, no penalty can survive and the penalty is liable to be cancelled.” So, in view of the matter, penalties levied by the AO and confirmed by the ld. CIT (A) is ordered to be deleted. Consequently, both the appeals filed by the assessee stands allowed. Order pronounced in open court on this 21st day of December, 2018.