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Facts
The Assessee filed an appeal against the CIT(A)'s order which confirmed a penalty imposed under section 271(1)(c) of the Income Tax Act for Assessment Year 2014-15. It was brought to the Tribunal's attention that in a previous quantum appeal (ITA No. 5957/Del/2018) concerning the same assessment year, the Co-ordinate Bench had already quashed the underlying assessment order.
Held
The Tribunal held that since the original assessment order, which was the basis for the penalty, had been quashed due to additions being made in an abated assessment without incriminating material, the consequential penalty order under section 271(1)(c) could not survive. Consequently, the Tribunal set aside the penalty order.
Key Issues
Whether a penalty imposed under section 271(1)(c) can legally stand when the quantum assessment order, upon which the penalty was based, has been quashed by the Tribunal.
Sections Cited
271(1)(c)
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Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Before: SH. PRADIP KUMAR KEDIA & SHRI YOGESH KUMAR U.S.
ORDER PER YOGESH KUMAR U.S., JM
This appeal is filed by the Assessee for the Assessment Year 2014-15 against the order of the Ld. Commissioner of Income Tax Appeals) -29, New Delhi (‘CIT(A)’ for short), dated 18.03.2024, wherein the Ld. CIT(A) has upheld the order of penalty passed u/s 271(1)(c) of the Act.
The Ld. Counsel for the Assessee brought to our notice that in the the Co-ordinate Bench of the Tribunal vide order dated 15/01/2024 quashed the Assessment Order on the ground that the additions have been made in the absence of any incriminating material in an abated assessment. The said fact of quashing the assessment has not been disputed by the Ld. DR.
Recording the submission of the Ld. AR and on verifying the material on record, since the Co-ordinate Bench of the Tribunal has quashed the assessment order in the quantum appeal filed by the Assessee in vide order dated 15/01/2024, the consequential impugned order of penalty and the order of the CIT(A) does not survive. Accordingly, the order of the penalty is hereby set aside by allowing the present Appeal.
In the result, the appeal of the Assessee is allowed.
Order pronounced in the open court on 11th September, 2024.