KUSUM LATA GARG,NEW DELHI vs. ACIT, NEW DELHI

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ITA 2346/DEL/2015Status: DisposedITAT Delhi12 June 2018AY 2003-043 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 original additions/disallowances were deleted, the penalty levied based on those additions must also fall. The principle 'sublato fundamento cadit opus' was applied.

What were the facts?

The assessee's appeals are against the penalty levied under Section 271(1)(c) for assessment years 2003-04 and 2004-05. The additions/disallowances that formed the basis for the penalty were previously deleted by the Tribunal.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying additions/disallowances have 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 ‘C’ BENCH,

Before: SHRI N.K. BILLAIYA, & SHRI SUDHANSHU SRIVASTAVA

For Appellant: Shri Salil Agarwal, AR
Hearing: 12.06.2018Pronounced: 12.06.2018

PER N.K. BILLAIYA, ACCOUNTANT MEMBER,

1.

Both these appeals filed by the assessee are directed against the order of the Commissioner of Income Tax (Appeals)- XXIV, New Delhi dated 16.02.2015 pertaining to assessment years 2003-04 & 2004-05. Since the first appellate authority has decided the appeals by a consolidated order, these were heard together and are being disposed of by this common order for the sake of convenience and brevity.

2.

Common grievance in both these appeals relate to the levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act', though the quantum may differ.

3.

At the very outset, the ld. AR stated that the additions/disallowances made in the assessment of the respective A.Ys have been deleted by the Tribunal, therefore, there remains no basis for levy of penalty u/s 271(1)(c) of the Act.

4.

The ld. DR fairly conceded to this.

5.

We have given thoughtful consideration to the orders of the authorities below. We find force in the contention of the ld. counsel for the assessee. We find that the Tribunal in and others have deleted the additions/disallowances made in the assessment. Sublato Fundamento Cadit Opus, meaning thereby, that in case the foundation is removed, the super structure falls. Since the quantum addition has been deleted and the foundation has been removed, the super structure i.e. penalty must fall.

6.

In the result, the appeals of the assessee in & 2347/DEL/2015 are allowed.

The order is pronounced in the open court on 12.06.2018.

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