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Facts
The revenue challenged the CIT(A)'s deletion of penalties levied under section 271(1)(c) for Assessment Years 2010-11 and 2011-12, amounting to Rs.105.06 Lacs and Rs.118.98 Lacs respectively. These penalties, initially imposed by the AO, were deleted by the CIT(A) because the underlying quantum additions had been deleted by the Tribunal and subsequently upheld by the Punjab & Haryana High Court due to low tax effect.
Held
The Tribunal affirmed the deletion of penalties, holding that once the quantum additions, which formed the basis for the penalties under section 271(1)(c), had been deleted by the Tribunal and confirmed by the High Court, the consequential penalties could not legally survive. Therefore, both appeals filed by the revenue were dismissed.
Key Issues
Whether penalties imposed under Section 271(1)(c) of the Income Tax Act are maintainable after the corresponding quantum additions, forming the basis of such penalties, have been deleted by the Tribunal and confirmed 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.