RAKESH KHANNA,NEW DELHI vs. ITO, NEW DELHI

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ITA 6498/DEL/2014Status: DisposedITAT Delhi27 December 2017AY 2005-063 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 found that the reassessment proceedings initiated by the AO were quashed in the assessee's own case by a previous order of the Tribunal. Since the reassessment order was void ab initio, the additions made therein did not survive, and consequently, the penalty levied also did not survive.

What were the facts?

The Assessing Officer (AO) initiated reassessment proceedings and made additions to the assessee's income. Subsequently, a penalty was levied under Section 271(1)(c) based on these additions. The assessee appealed against the penalty.

What were the issues?

Whether a penalty levied under Section 271(1)(c) can survive when the underlying reassessment proceedings have been quashed as void ab initio.

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 BENCH “F”, NEW DELHI

Before: SHRI R. K. PANDA & MS. SUCHITRA KAMBLE

For Appellant: Shri Vishal Kalra, Adv
For Respondent: Shri Atiq Ahmad, Sr.DR

O R D E R

PER R. K. PANDA, AM :

1.

This appeal filed by the assessee is directed against the order dated 15.09.2014 of the CIT(A)-XVIII, New Delhi relating to assessment year 2005-06.

2.

Levy of penalty of Rs.8,20,594/- by the Assessing Officer u/s 271(1)(c) of the I.T. Act and upheld by the ld. CIT(A) is the only issue raised by the assessee in the grounds of appeal

3. Ld. counsel for the assessee at the outset filed a copy of the order of the Tribunal in assessee’s own case and submitted that the re-assessment proceedings initiated by the Assessing Officer has been quashed. Therefore, the various additions made by the Assessing Officer in the order passed u/s 147/143(3) does not survive. Since the assessment order has been quashed, therefore, the penalty has no legs to stand and, therefore, the penalty so levied by the Assessing Officer and upheld by the ld. CIT(A) has to be deleted.

4.

Ld. DR on the other hand fairly submitted that the Tribunal has quashed the reassessment proceedings initiated by the Assessing Officer.

5.

We have considered the rival arguments made by both the sides and find that as against the income of Rs.8,91,218/- declared by the assessee in the return filed originally on 24.03.2006, the Assessing Officer completed the assessment u/s 147/143(3) on 23.10.2010 determining the total income of the assessee at Rs.56,19,570/-. We find the Tribunal vide order dated 28.11.2014 for assessment year 2005-06 has held that the reassessment order passed by the Assessing Officer is without jurisdiction, bad in law, void ab initio and accordingly they cancelled the order passed by the ld. CIT(A) in confirming the various additions. Since the reassessment proceedings have been held to be void ab initio, therefore, the various additions made by the Assessing Officer and sustained by the ld. CIT(A) does not survive. Therefore, the penalty levied on account of various additions also does not survive.

Accordingly, the penalty so levied by the Assessing Officer and upheld by the ld. CIT(A) is directed to be deleted. The grounds raised by the assessee are accordingly allowed.

6.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open Court at the time hearing itself i.e. on this 27th day of December, 2017.

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