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Facts
The Revenue challenged the CIT(A)'s deletion of a penalty of Rs.33,47,40,340/- imposed on Bombardier Transportation India P. Ltd. under section 271(1)(c) for furnishing inaccurate particulars of income for AY 2011-12. The penalty was originally based on adjustments related to Arms Length Price (ALP) and income enhancement.
Held
The Tribunal noted that the underlying merits of the case, concerning ALP adjustments and income enhancement, had already been set aside to the TPO for fresh adjudication by an earlier Tribunal order. Since the very basis for imposing the penalty under section 271(1)(c) no longer existed, the CIT(A)'s decision to delete the penalty was deemed justified.
Key Issues
Whether the CIT(A) was justified in deleting the penalty levied under section 271(1)(c) when the underlying issues on merits for which the penalty was imposed had been set aside by the Tribunal for fresh adjudication.
Sections Cited
Section 250(6) of the Income Tax Act, 1961, Section 271(1)(c) of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH ‘H’, NEW DELHI
Before: SH. G.S. PANNU, HON’BLE & SH. ANUBHAV SHARMA
PER ANUBHAV SHARMA, JM : The Revenue has come in appeal, challenging the order dated 24.09.2020 u/s 250(6) of the Income Tax Act, 1961 (hereinafter referred as the ‘Act’) passed by the Ld. Commissioner of Income Tax (Appeals)-44, New Delhi (hereinafter referred as Ld. CIT(A)), pertaining to AY 2011-12.
Bombardier Transportation India P. Ltd. 2
The Revenue has challenged the deletion of penalty of Rs.33,47,40,340/- levied u/s 271(1)(c) of the Act for furnishing inaccurate particulars of its income.
At the time of hearing, it transpired that the Tribunal by its order dated 09.08.2019 in for the relevant assessment year has already set aside the issues on merits to TPO for fresh adjudication/determination.
Ld. DR was unable to impress that any appeal against the same has been preferred by the Revenue. Thus, where the basis of imposition of penalty i.e. adjustments in the ALP and the enhancement of the income, no longer survives that the Ld.CIT(A) was justified to delete the penalty. There is no substance in the grounds raised. The appeal of Revenue is dismissed.