NISHCHAL SELHI,GHAZIABAD vs. ITO, WARD- 1(4), GHAZIABAD

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ITA 154/DEL/2018Status: DisposedITAT Delhi13 June 2018AY 2008-093 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the reassessment proceedings, which formed the basis for the addition and subsequent penalty, were quashed, there was no valid basis left to levy the penalty. Therefore, the penalty order was set aside.

What were the facts?

The Assessing Officer made an addition of Rs. 20 lakhs for unexplained cash investment in property. A penalty under Section 271(1)(c) was levied and confirmed by the CIT(A). However, the ITAT had previously quashed the reassessment proceedings for the same assessment year.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied when the underlying reassessment proceedings have been quashed.

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 BENCHES “SMC”: DELHI

Before: SHRI BHAVNESH SAINI

Hearing: 12.06.2018Pronounced: 13.06.2018

ORDER This appeal by assessee has been directed against the order of Ld. CIT(A), Aligarh dated 14.09.2017 for the A.Y. 2008-09, challenging the levy of penalty u/s 271(1)(c) of the Income Tax Act, 1961 (the Act).

2.

In this case the Assessing Officer (A.O.) made addition of Rs.20 lakhs on account of unexplained investments made in cash for purchase of commercial property. The A.O. levied the penalty for the same which is confirmed by the Ld.CIT(A).

3.

Ld.Counsel for the assessee at the outset submitted that ITAT SMC Bench Delhi in the case of the assessee in for the A.Y. under appeal vide order dated 13th October,2017 quashed the re-assessment proceedings and allowed the appeal of assessee. Ld.Counsel has submitted that since quantum addition has been deleted by quashing the reassessment proceedings, therefore, no penalty be levied. Copy of orders placed on record and provided to the Ld.D.R. who did not dispute the same.

ITA 154/Del/18 A.Y.: 2008-09 Sh. Nishchal Selhi, Ghaziabad vs. ITO, Ward 1(4) 4. Considering the above facts and in the light of order of the Tribunal, it is clear that A.O. made the addition in the reassessment proceedings upon which penalty was levied. Since reassessment proceedings have been set aside and quashed by the Tribunal, therefore, no basis is left to levy penalty against assessee. I accordingly set aside the order of authorities below and cancel the penalty.

5.

In the result the appeal of the assessee is allowed. Order pronounced in the open Court on 13th June, 2018.

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