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Facts
The Revenue filed an appeal against the CIT(A)'s order for AY 2009-10, which involved a penalty levied under section 271(1)(c) of the Income-tax Act. The assessee opted to settle the tax arrears under the "Vivad Se Vishwas Scheme, 2020" (VSVS), and Form 5, confirming the settlement, was subsequently issued by the Tax Department.
Held
The Tribunal held that once the underlying assessment, which formed the basis for the penalty under section 271(1)(c), has been settled under the VSVS and Form 5 has been issued, there is no legal ground remaining to levy the penalty. Consequently, the penalty order was set aside.
Key Issues
Whether a penalty levied under section 271(1)(c) of the Income-tax Act, 1961, can be sustained when the underlying tax dispute has been settled under the Vivad Se Vishwas Scheme, 2020, and Form 5 has been issued.
Sections Cited
271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘G’ : NEW DELHI
PER S.RIFAUR RAHMAN,AM: The Revenue has filed appeal against the order of the Learned Commissioner of Income Tax (Appeals)-15, New Delhi [“Ld. CIT(A)”, for short] (NFAC) dated 06.09.2019 for the Assessment Year 2009-10. Ld. AR for the assessee submitted that the assessee has opted to settle the 2. dispute relating to the tax arrears for the assessment year under consideration under the “Vivad Se Vishwas Scheme, 2020” and the same has been settled and also Form 5 was issued by the Tax Department. He further submitted that the impugned assessment was challenged in ITA No.9129/Del/2019 before this 2 tribunal which was decided vide order dated 16.03.2023 after the issuance of Form 5 under VSVS. He submitted that in view of the aforesaid, the penalty levied under section 271(1)(c) of the Income-tax Act, 1961 (for short ‘the Act’) against the original assessment, which is challenged by the Revenue in the present appeal, does not survive and the same may be deleted and the appeal be dismissed.
Keeping in view the aforesaid facts, when the assessment order on the basis of which penalty u/s 271(1)(c) is levied is decided under VSVS and Form 5 has also been issued, there remains no basis at all for levying the penalty. So, in view of the matter, the penalty order passed by the AO is set aside and the appeal filed by the Revenue is hereby dismissed.
In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open court on this 23rd day of August, 2024 (SUDHIR PAREEK) ACCOUNTANT MEMBER Dated: 23.08.2024 TS