DCIT, CENTRAL CIRCLE- 19, NEW DELHI vs. YOGESH TRADING COMPANY, NEW DELHI

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ITA 3744/DEL/2017Status: PendingITAT Delhi20 November 2018AY 2008-094 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 upheld the CIT(A)'s order deleting the penalty. Since the addition on which the penalty was based was itself deleted by the Tribunal, the penalty no longer survived.

What were the facts?

The Assessing Officer made an addition of Rs. 1,44,94,375/- on account of a shortfall in income surrender. Penalty under Section 271(1)(c) was levied based on this addition. The CIT(A) had deleted this penalty.

What were the issues?

Whether penalty under Section 271(1)(c) can survive when the addition forming its basis has been deleted by a higher appellate authority.

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, DELHI BENCH ‘G’, NEW DELHI

Before: SH. R.K. PAND & SH. SUDHANSHU SRIVASTAVA

Hearing: 20/11/2018Pronounced: 20/11/2018

ORDER PER R.K. PANDA, AM:

This appeal filed by the revenue is directed against the order dated 27.03.2017 passed by the CIT (A)-27, New Delhi relating to A. Y. 2008-09.

2.

The grounds raised by the revenue are as under :-

1.

That the Ld. CIT(A) erred in law and on facts in deleting the penalty imposed of Rs.47,83,144/- under section 271 (1) (c) of the Act, without property appreciating the facts and circumstances of the case. 2. (a) The order of the CIT (Appeals) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/ all of the ground of appeal before or during the course of the hearing of the appeal.

3.

The Ld. Counsel for the assessee at the outset submitted that penalty u/s 271 (1) (c ) of the I. T. Act was levied on addition of Rs. 1,44,94,375/- on account of short fall in surrender of income. He submitted that the addition so made by the Assessing Officer which was confirmed by the CIT(A) has been deleted by the Tribunal vide order dated 08.02.2017. Since the very basis on which penalty was levied does not survive, therefore, the order of the CIT(A) deleting the penalty is justified and the appeal filed by the revenue has to be dismissed.

4.

The Ld. DR fairly conceded that the Tribunal has deleted the addition made by the Assessing Officer which was sustained by the CIT(A). Therefore, the penalty does not survive.

5.

After considering the rival arguments made by both the sides and perusal of the orders of the authority below, we find the Assessing Officer had made addition of Rs.1,44,94,375/- on account of short fall in surrender of income. The addition so made by the Assessing Officer was confirmed by the CIT (A). The Assessing Officer thereafter initiated the penalty proceedings u/s 271 (1) (c) of the I. T. Act 1961 and levied penalty of Rs.44,83,144/-. The CIT(A) deleted the penalty so levied by the Assessing Officer on the ground that the Tribunal has deleted the addition made by the Assessing Officer and sustained by the CIT(A). Since the Tribunal has deleted the addition made by the Assessing Officer and sustained by the CIT(A), therefore, the very basis on which penalty was levied does not survive. Therefore, the order of the CIT(A) cancelling the penalty is fully justified. The same is accordingly upheld and the grounds raised by the revenue are dismissed.

6.

In the result, the appeal filed by the revenue is dismissed.

Order pronounced in the open court on 20.11.2018.

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