INCOME TAX OFFICER-23(3)(2), MUMBAI vs. SANJAY J AHUJA, MUMBAI

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ITA 4451/MUM/2017Status: DisposedITAT Mumbai11 July 2018AY 2010-113 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that if the additions/disallowances forming the basis of the penalty are deleted, the penalty itself cannot survive. Therefore, the CIT(A) was correct in deleting the penalty.

What were the facts?

The Revenue appealed the deletion of penalty levied under Section 271(1)(c) by the CIT(A). The penalty was based on additions/disallowances that were subsequently deleted by the ITAT.

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 authority.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “J”, MUMBAI

Before: SHRI RAJENDRA, HONBLE & SHRI C.N. PRASAD, HONBLEShri Sanjay J. Ahuja

For Appellant: Shri Haridas Bhat
For Respondent: Shri Arju Garodia
Hearing: 28.06.2018Pronounced: 11.07.2018

Date of Hearing : 28.06.2018 Date of Pronouncement : 11.07.2018 O R D E R PER C.N. PRASAD (JM) 1. This appeal is filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals) – 34, Mumbai dated 09.03.2017 for the Assessment Year 2010-11.

2.

The only grievance of the Revenue in its appeal is that the Ld.CIT(A) deleted the penalty levied u/s. 271(1)(c) of the Act on the ground that quantum additions/disallowance were deleted by the Hon'ble ITAT vide

(A.Y: 2010-11) Shri Sanjay J. Ahuja order in ITA.No. 5731/Mum/2014 dated 09.06.2016 for the Assessment Year 2010-11.

3.

Learned Counsel for the assessee submitted that, in this case the Hon'ble Bench had deleted the additions/disallowances made in the Assessment Order passed u/s. 143(3) of the Act which was the basis for levying the penalty u/s. 271(1)(c) of the Act. Learned Counsel for the assessee submitted that since the Tribunal deleted the additions/disallowance in the quantum proceedings the penalty u/s. 271(1)(c) will not survive and therefore the Ld.CIT(A) has rightly deleted the penalty. Ld. Counsel for the assessee also submitted that the appeal filed by the Revenue against ITAT order in deleting the additions/disallowances has been rejected by the Hon'ble High Court.

4.

Ld. DR vehemently supported the order of the Assessing Officer.

5.

We have heard the rival submissions, perused the orders of the authorities below. It is the finding of the Ld.CIT(A) that the Tribunal had deleted the additions/disallowances made in the quantum proceedings by the Coordinate Bench in ITA.No. 5731/Mum/2014 dated 09.12.2016 and all the additions/disallowances made by the Assessing Officer and as confirmed by the Ld.CIT(A) stand deleted by the Tribunal. This finding of the Ld.CIT(A) has not been disputed by the Revenue. Therefore, when

(A.Y: 2010-11) Shri Sanjay J. Ahuja the additions/disallowances were deleted, the penalty levied u/s. 271(1)(c) on such additions/disallowances cannot survive. Hence the Ld.CIT(A) rightly deleted the penalty. Thus, we confirm the order of the Ld.CIT(A) in deleting the penalty. Ground raised by the Revenue is rejected.

6.

In the result, appeal of the Revenue is dismissed.

Order pronounced in the open court on the 11th July, 2018.

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