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Facts
The assessee filed an appeal against the order of the CIT(A) for AY 2012-13, challenging the imposition of a penalty of Rs. 18,18,851/- under Section 271(1)(c) of the Income Tax Act. The appeal was filed with a delay of 43 days, which the Tribunal condoned after considering the assessee's application for condonation of delay.
Held
The Tribunal observed that in the quantum proceedings, the matter was remanded, and the Assessing Officer subsequently deleted the additions that formed the very basis for imposing the penalty. Since the foundational additions for the penalty were deleted and the Revenue did not dispute this fact, the Tribunal held that the impugned penalty could not survive. Consequently, the Tribunal directed the AO to delete the penalty.
Key Issues
1. Whether the penalty levied under Section 271(1)(c) is sustainable when the quantum additions forming its basis have been deleted. 2. Condonation of delay in filing the appeal.
Sections Cited
271(1)(c), 143(3), 254
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI KUL BHARAT
O R D E R PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 07.06.2023, pertaining to the assessment year 2012-13. The assessee has raised following grounds of appeal:
“1. That learned CIT(Appeals) erred in law & fact by imposing an penalty u/s 271(1)(c) amounting to Rs. 1818851/-, while there was no concealment nor filing of an inaccurate particulars. Hence imposition of penalty u/s 271(1)(c) is amounting to Rs. 1818860/- is illegal arbitrary ought to be deleted.
That Learned CIT(Appeals) erred in law & fact by imposing the penalty of Rs. 1818851/- while it was not initiated in assessment order passed u/s 143(3) / 254 of I.T. Act, 1961. Hence imposition of penalty amounting to Rs. 1818860/- is very very excessive arbitrary ought to be deleted.” 2. As per office report, the appeal is barred by 43 days. The assessee has filed application seeking condonation of delay in filing the appeal and an affidavit by the Authorized Representative is also filed.
2.1 Learned DR opposed the submissions.
2.2 For the reasons stated in the application, I am satisfied that there was reasonable cause for delay in filing the appeal. Therefore, the delay is condoned and the appeal is taken up for adjudication.
Apropos to the grounds of appeal, learned counsel for the assessee at the outset submitted that in the quantum proceedings the matter was remanded by the Tribunal and the Assessing Authority has deleted the additions on the basis of which impugned penalty was imposed.
Learned DR placed reliance on the orders of the authorities below.
I have heard rival contentions and perused the material available on record.
During the course of hearing the assessee has also filed assessment order passed pursuant to the directions of the Tribunal in quantum proceedings. As per the assessment order the AO had deleted the impugned additions. The Revenue has not controverted these undisputed facts. Therefore, the impugned penalty would not survive as the addition in quantum, which was the very base for imposing penalty, has been deleted. I, therefore, direct the AO to delete the penalty. Grounds of appeal stand allowed.
Appeal of the assessee is allowed.
Order pronounced in open court on 8th February, 2024.