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Facts
The assessee challenged the CIT(A)'s confirmation of a penalty of Rs. 3,98,370/- under Section 271(1)(c) of the Income Tax Act for AY 2011-12, originally assessed under Section 143(3). The assessee's AR contended that the quantum additions/disallowances forming the basis of this penalty had been reversed by a co-ordinate bench of the Tribunal in separate quantum proceedings.
Held
The Tribunal held that since the underlying quantum additions/disallowances, which were the very basis for imposing the penalty under Section 271(1)(c), had been reversed in the quantum proceedings, the penalty could not be sustained. Consequently, the action of the AO in imposing the penalty was set aside and cancelled.
Key Issues
Whether a penalty imposed under Section 271(1)(c) is sustainable when the underlying quantum additions/disallowances have been reversed by the ITAT in separate proceedings.
Sections Cited
Section 143(3), Section 271(1)(c), Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘E’ NEW DELHI
(Assessment Year : 2011-12) Meena Gupta Vs. ACIT 27/29, 1st Floor, Gali No. 9, Central Circle-14, Vishwas Nagar, New Delhi-110055 New Delhi-110032 PAN No. AAGPG6952J (APPELLANT) (RESPONDENT) Assessee by Shri Madhav Kapoor, AR Revenue by Shri Amit Shukla, Sr. D.R. Date of hearing: 21.10.2024 Date of Pronouncement: 27.11.2024 ORDER
PER PRADIP KUMAR KEDIA, AM :
The captioned appeal has been filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi (‘CIT(A)’ in short) dated 28.03.2023 arising from the assessment order dated 25.12.2019 passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961 (‘the Act’) concerning A.Y. 2011-12 in question.
The assessee by way of its grounds of appeal has challenged the action of the CIT(A) in confirming the penalty of Rs.3,98,370/- under s. 271(1)(c) of the Act.
Meena Gupta -2- 3. When the matter was called for hearing, the learned AR for the assessee submitted that the quantum additions/disallowances giving rise to the imposition of penalty in appeal has been reversed by the co- ordinate bench of Tribunal in order dated 15.11.2023 in the quantum proceedings.
In view of the fact that the quantum additions/disallowances itself do not survive and has ceased to exist owing to the appellate order of the ITAT in quantum proceedings, the very basis for imposition of penalty under s. 271(1)(c) also does not survive in tandem. Therefore, the action of the AO towards imposing penalty is set aside and cancelled.
In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 27.11.2024.