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Facts
The revenue appealed against the deletion of penalties under section 271(1)(c) amounting to Rs.105.06 Lacs and Rs.118.98 Lacs for AY 2010-11 and 2011-12, respectively, by the CIT(A). The CIT(A) had deleted these penalties because the underlying quantum additions, originally made by the AO, were already deleted by the Tribunal. Subsequently, the revenue's appeals against the quantum deletions were dismissed by the High Court due to low tax effect.
Held
The Tribunal affirmed that as the quantum additions, forming the basis for the penalties, had already been deleted by the Tribunal and this deletion was subsequently upheld by the High Court on account of low tax effect, the consequential penalties could not survive. Consequently, the revenue's appeals seeking to reinstate the penalties were dismissed.
Key Issues
Whether penalties levied under Section 271(1)(c) are sustainable when the quantum additions forming their basis have been deleted by the Tribunal and the revenue's appeal against such deletion was dismissed by the High Court.
Sections Cited
271(1)(c)
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Income Tax Appellate Tribunal, ‘DB’, AMRITSAR BENCH, AMRITSAR
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI UDAYAN DAS GUPTA, JM
O R D E R Manoj Kumar Aggarwal (Accountant Member) Aggrieved by deletion of penalty u/s 271(1)(c) for Rs.105.06 1. Lacs and Rs.118.98 Lacs as levied by Ld. AO for Assessment Years (AY) 2010-11 and 2011-12 respectively, the revenue is in further appeals before us. The impugned orders have been passed by Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] on 06-06-2024. The registry has noted delay of 49 days in the appeals which stand condoned. Upon perusal of impugned orders, it could be seen that the penalties have been deleted on the ground that quantum additions as made by Ld. AO stood deleted by Tribunal in its order dated 25- 05-2023. The Ld. AR demonstrated that the revenue’s appeal against the same stood dismissed by Hon’ble Punjab & Haryana Court in and 204 of 2023 vide orders dated 15-10- 2024 on account of low tax effect, the copies of which have been placed on record. The said fact could not be controverted by Ld. Sr. DR. Since quantum additions has already been deleted, the consequential penalties would not survive.
Both the appeals stand dismissed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.