HIMANSHU BHARDWAJ,NEW DELHI vs. ITO WARD 44(1), NEW DELHI

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ITA 3395/DEL/2023Status: DisposedITAT Delhi02 January 2024AY 2014-15Bench: SHRI PRADIP KUMAR KEDIA (Accountant Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that the additions in the quantum proceedings, which formed the basis for the penalty, had been deleted by a co-ordinate bench. Therefore, the penalty was not sustainable.

What were the facts?

The assessee filed an appeal against the CIT(A)'s order confirming a penalty imposed by the AO. The penalty was levied based on an addition made in quantum proceedings. The assessee argued that the basis for the penalty, the addition, was later deleted by a co-ordinate bench of the ITAT.

What were the issues?

Whether the penalty under Section 271(1)(c) is sustainable when the additions in the quantum proceedings on which it was based have been deleted by the Tribunal?

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “SMC” DELHI

Before: SHRI PRADIP KUMAR KEDIA

For Appellant: Shri Subhash Gupta, ITP
For Respondent: Ms. Kirti Sankratyayan, Sr.DR

The captioned appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (‘CIT(A)’ in short) dated 24.05.2022 arising from the assessment order dated 27.03.2019 passed by the Assessing Officer (AO) under Section 271(1)(c) of the Income Tax Act, 1961 (the Act) concerning AY 2014-15. 2. The grounds of appeal raised by the assessee read as under:

1. On the facts and circumstances of the case the Ld CIT(A) was not justified in confirming penalty of Rs 54762/- imposed by AO on Unsecured Loan Rs.365000/- as the addition on Unsecured Loan Rs 365000/- was deleted by ITAT. On the facts and circumstances of the case the Ld CIT(A) was not justified in confirming penalty of Rs 54762/- imposed by AO on Unsecured Loan Rs.365000/- as the addition on Unsecured Loan Rs 365000/- was deleted by ITAT.

Therefore CIT(A) passed the order without application of judicial mind against the principal of natural justice with applicant. The LD CIT(A) as erred in confirming penalty of Rs 54762/- imposed by AO on Unsecured Loan Rs 365000/- as the addition on Unsecured Loan Rs 365000/-was deleted by ITAT. On the facts and circumstances of the case and has not appreciated the facts evidences submission made by the appellant in correct perspective.

3.

When the matter was called for hearing, the ld. counsel for the assessee submitted that the imposition of penalty of Rs.54,762/- arises from the additions in the quantum proceedings. The additions of the quantum proceedings stands deleted by the Co-ordinate Bench of Tribunal in order dated 29.04.2022. The ld. counsel thus submitted that the very edifice for sustaining the penalty under Section 271(1)(c) has ceased to exist and consequently urged for suitable relief.

4.

The ld. DR for the Revenue did not offer any comments. 5. I straightaway find merit in the case made out on behalf of the assessee. Since, the relief has been granted in the quantum proceedings, the consequential penalty in question imposed under Section 271(1)(c) does not hold any water. 6. In the light of the order of the Tribunal in quantum proceedings referred in the preceding paragraphs, the Assessing Officer is directed to delete the penalty. 7. In the result, the appeal of the assessee is allowed. Order was pronounced and dictated in the open Court on 02/01/2024

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