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Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
ORDER
Per N. K. Saini, AM:
This is an appeal by the department against the order dated 07.04.2015 of the ld. CIT(A)-18, New Delhi.
The only grievance of the department in this appeal relates to the deletion of penalty of Rs.15,82,975/- levied by the AO u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act).
During the course of hearing, the ld. Counsel for the assessee at the very outset sated that the additions on the basis of which the impugned penalty was levied by the AO has already been deleted by the ld. CIT(A) whose order has been affirmed by the ITAT Delhi Bench “SMC”, New Delhi in for the assessment year 2006-07 vide order dated01.08.2017 (copy of the said order was furnished which is placed on record).
2 Ganguly Brothers 4. In his rival submissions, the ld. CIT DR although supported the order of the AO but could not controvert the aforesaid contention of the ld. Counsel for the assessee.
After considering the submissions of both the parties and the material available on record, it is noticed that the assessment in this case was framed by the AO at an income of Rs.48,94,100/- as against the returned income of Rs.1,91,260/- u/s 144 of the Act. The AO levied the impugned penalty by passing the ex-parte order dated 29.05.2009. In the meantime, the assessee preferred an appeal before the ld. CIT(A) against the additions made by the AO who vide order dated 07.04.2015 deleted the additions, against the said order, the department preferred an appeal before the ITAT Delhi Bench ‘SMC’, New Delhi in for the assessment year 2006-07 wherein vide order dated 01.08.2017, the order of the ld. CIT(A) was affirmed and the appeal of the department was dismissed. Therefore, the additions on the basis of which, the impugned penalty was levied by the AO is not inexistence.
On a similar issue, the Hon’ble Supreme Court in the case of K. C. Builders & Others Vs ACIT (2004) 265 ITR 562 wherein it has been held as under: “Where the additions made in the assessment order on the basis of which penalty for concealment is levied, are deleted, there remains no basis at all for levying penalty for concealment and, therefore, in such a case no penalty can survive and the penalty is liable to be cancelled. Ordinarily, penalty cannot stand if the assessment itself is set aside.”
In the present case, it is an admitted fact that the additions on the basis of which, the impugned penalty was levied by the AO u/s 271(1)(c) of the Act is not inexistence. Therefore, we are of the view that the ld. CIT(A) was fully justified in 3 Ganguly Brothers deleting the penalty levied by the AO. In that view of the matter, we do not see any merit in this appeal of the department.
In the result, the appeal of the department is dismissed. (Order Pronounced in the Court on 14/08/2018)