M/S. R.K. INDUSTRIES ,BURDWAN vs. ACIT, CIRCLE - 2, BURDWAN , BURDWAN

Heard both parties and perused the material available on record. It is noted from the record that the assessee filed appeal before the Tribunal challenging the action of the CIT(A) in upholding the disallowance u/s 40A(3) of the Income Tax Act, 1961 (in short “Act”) delaying the payment of provident fund and undisclosed income. This Tribunal vide its order dated 24.10.2018 allowed the appeal of the assessee partly. It is observed from the order imposing penalty u/s 271(1)(c) of the Act by the AO, that the penalty proceedings initiated for not disclosing of corresponding income received from Food Corporation of India (in short “FCI”). As discussed above, the said addition was deleted by this Tribunal vide its order dated (ASSESSMENT YEAR-2011-12) 24.10.2018 vide its para 3. Therefore, in our opinion, when the quantum was deleted by this Tribunal and penalty imposed on the same issue does not stand and no order contrary brought on record by the Ld.DR. In such circumstances, in our opinion, the penalty imposed by the AO does not stand for scrutiny. Therefore, the penalty of Rs.60,000/- is cancelled and the order of CIT(A) is set aside. Accordingly, Grounds No.1 & 2 raised by the assessee are allowed.

In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 22.11.2018.