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Facts
An assessment initially made an addition of Rs. 41,36,250/- u/s 69 for unexplained investment. This addition was subsequently deleted by the Ld. CIT(A) and the deletion was sustained by the Tribunal in an earlier appeal. The present appeal contests the penalty levied u/s 271(1)(c) which was based on this now-deleted addition.
Held
The Tribunal held that since the foundational addition of Rs. 41,36,250/- under Section 69, on which the penalty u/s 271(1)(c) was based, has already been deleted and upheld by appellate authorities, the penalty cannot legally survive. Accordingly, the Assessing Officer was directed to delete the penalty.
Key Issues
Whether a penalty levied under Section 271(1)(c) for unexplained investment can be sustained when the underlying addition under Section 69 has been deleted by appellate authorities.
Sections Cited
271(1)(c), 143(3), 69, 144, 148
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Income Tax Appellate Tribunal, DELHI BENCH “SMC” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD
सुनवाईक�तारीख/ Date of hearing: 28.12.2023 12.03.2024 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R
This appeal is filed by the assessee against the order of the Ld. CIT(Appeals) – (NFAC) dated 25.09.2023 arising out of the penalty order passed u/s 271(1)(c) of the Act.
At the outset, the Ld. Counsel for the assessee submits that the assessment made u/s 143(3) of the Act making addition of Rs.41,36,250/- u/s 69 of the Act as an unexplained investment has been deleted by the Ld.CIT(A) which ordered was also sustained by I.T.A.No.3255/Del/2023 the Tribunal in dated 15.05.2020. Therefore, it is pleaded that the penalty levied on the basis of the addition made in the assessment order be deleted.
Heard rival submissions. We find that while completing the assessment u/s 144/148 of the Act dated 18.11.2016 an addition of Rs.41,36,250/- was made u/s 69 of the Act as an unexplained investment on the investment made in the purchase of immovable property. This addition was deleted by the Ld.CIT(A) and the order of the Ld.CIT(A) was sustained by the Tribunal by dismissing the appeal of the Revenue in dated 15.05.2020 which is placed on record. Therefore, since the addition made in the assessment order came to be deleted the penalty levied on the basis of the addition made in the assessment order cannot survive.
Thus, we direct the AO to delete the penalty levied u/s 271(1)(c) of the Act.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 12/03/2024