DCIT CENT. CIR. - 8(4), MUMBAI vs. BERMACO ENERGY LTD., NAVI MUMBAI

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ITA 128/MUM/2018Status: DisposedITAT Mumbai29 March 2019AY 2006-073 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, stating that since the quantum addition was deleted, the penalty levied under Section 271(1)(c) would not survive, following the Supreme Court's decision in KC Builders v. ACIT.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting a penalty levied under Section 271(1)(c). The CIT(A) had deleted the penalty because the Tribunal had previously deleted the addition made under Section 68, which was the basis for the penalty.

What were the issues?

Whether a penalty under Section 271(1)(c) can be sustained when the underlying addition under Section 68 has been deleted by a higher appellate authority.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 68

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI

Before: SHRI C.N. PRASAD, HONBLE & SHRI RAJESH KUMAR, HONBLEShri Chaudhary Arunkumar Singh

For Respondent: Shri Chaudhary Arunkumar Singh
Hearing: 28.03.2019Pronounced: 29.03.2019

O R D E R PER C.N. PRASAD (JM) 1. This appeal is filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-50, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 24.10.2017 for the A.Y. 2006-07 in sustaining the penalty levied u/s. 271(1)(c) of the Act.

2.

Inspite of issue of notice through RPAD, none appeared on behalf of the assessee nor any adjournment was sought. In the circumstances, we dispose off this appeal on hearing the Ld.DR.

(A.Y: 2006-07) M/s. Bermaco Energy Ltd., 3. Ld. DR submitted that the Ld.CIT(A) deleted the penalty taking note of the fact that the Tribunal in ITA.No.4309/Mum/2014 by order dated 13.09.2017 deleted the addition made u/s. 68 of the Act in the assessment made u/s. 143(3) of the Act. Ld. DR fairly submits that since the quantum addition is deleted by the Tribunal penalty may not survive.

4.

On a perusal of the order of the Ld.CIT(A), we notice that the Ld.CIT(A) deleted the penalty since the Tribunal in ITA.No.4309/Mum/2014 by order dated 13.09.2017 deleted the quantum addition made u/s. 68 of the Act in the assessment proceedings. Since quantum addition is deleted by the Tribunal he observed that the penalty levied will not survive in view of the decision of the Hon'ble Supreme Court in the case of KC Builders v. ACIT [265 ITR 562]. Thus, we do not find any infirmity in the order passed by the Ld.CIT(A) in deleting the penalty u/s. 271(1)(c) of the Act. Accordingly, we uphold the order of the Ld.CIT(A) and reject the grounds raised by the Revenue.

5.

In the result, appeal of the Revenue is dismissed.

Order pronounced in the open court on the 29th March, 2019

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