ACIT, NEW DELHI vs. M/S. GARG CHEAP CUT PIECE HOUSE, DELHI

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ITA 301/DEL/2015Status: DisposedITAT Delhi03 October 2017AY 2006-075 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 since the order under Section 263 was quashed by a coordinate bench, the penalty levied based on that order became infructuous. Therefore, the deletion of the penalty by the CIT(A) was upheld.

What were the facts?

The Revenue appealed against the deletion of penalty imposed under Section 271(1)(c) by the CIT(A). The penalty was levied consequent to an order passed by the CIT under Section 263. However, a coordinate bench of the ITAT had previously quashed the proceedings under Section 263 for the same assessment year.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the order under Section 263, which formed the basis for the additions, has been quashed.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 263,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES: ‘C’, NEW DELHI

Before: SHRI H.S.SIDHU & SHRI L.P. SAHU

PER L.P. SAHU, ACCOUNTANT MEMBER

1.

This appeal filed by the Revenue is directed against the order dt. 13.10.2014 of the Ld. CIT(Appeals)-XXX, New Delhi pertaining to the Assessment Year (A.Y.) 2006-07 on the following grounds.

1. On the facts and in the circumstances of the case, the order of the Ld. CIT(A) is bad in law and not in consonance with the facts of the case. 2. On the facts and in the circumstances of the case the Ld. CIT(A) had erred in deleting the penalty amounting to Rs.15,27,887/- levied u/s 271(1)(c) consequent to the order of the CIT passed u/s 263 of the Act. 3. The appellant craves leave to add, alter or amend any / all the grounds of appeal during the course of hearing of the appeal.

2. At the outset of the hearing Ld.A.R. drew our attention to the fact that this appeal has arisen against the proceedings u/s 143(3)/263 of the Income Tax Act, 1961. He submitted that the Coordinate Bench has quashed the initiation of proceedings u/s 263 of the Act by Ld. CIT(A) in ITA 1905/Del/2010 for the A.Y. 2006-07, and, therefore, the appeal becomes infructuous.

2.1. The assessee has preferred appeal against the order of the Ld. CIT(A). Ld. CIT(A) has observed as under.

3. I have considered the written submissions filed by the Ld.AR of the appellant and also considered the facts of the case and agree with the argument of the appellant that since the order passed u/s 263 is cancelled by Hon’ble ITAT, no penalty can be levied on the basis of addition made by the Ld.AO in the order passed u/s 143(3) in compliance to order passed by the CIT u/s 263 of the Act. In the result penalty levied by the A.O. is hereby deleted. 4. In the result the appeal allowed.

2.2. Ld.D.R. relied on the order of the Assessing Officer.

3.

After hearing both the sides and perusing material placed on record and orders of lower authorities, we note that the Coordinate Bench of the Tribunal has quashed the proceedings u/s 263 of the Act in ITA 1905/Del/2010 for the A.Y. 2006-07 vide order dt. 30.9.2013. The penalty imposed u/s 271(1)(c ) of the Act against order u/s 143(3)/263 for the above A.Y. Ld. CIT(A) has allowed the penalty appeal of the assessee by observing as under. “3. I have considered the written submissions filed by the Ld.AR of the appellant and also considered the facts of the case and agree with the argument of the appellant that since the order passed u/s 263 is cancelled by Hon’ble ITAT, no penalty can be levied on the basis of addition made by the A.O. in the order apssed u/s 143(3) in compliance to order passed by the CIT u/s 263 of the Act. In the result penalty levied by the Ld.AO is hereby deleted.”

4.

From the above observations of the Ld. CIT(A) it is noted that since the ITAT has quashed order u/s 263 proceedings, therefore, the entire proceedings have become infructuous. In view of this, we are of the view that the Ld. CIT(A) has rightly deleted the penalty imposed by the A.O. and hence we dismiss the appeal of the revenue.

5.

In the result the appeal of the Revenue is dismissed.

Pronounced in the Open Court on 03rd October, 2017.

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