M/S. VARSHA SPINNING MILLS LIMITED,NEW DELHI vs. JCIT, NEW DELHI

PDF · subscribers
ITA 776/DEL/2014Status: DisposedITAT Delhi04 July 2017AY 1997-983 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that since the original addition on which the penalty was based was set aside, the penalty itself is consequential and also needs to be set aside. The matter is restored to the Assessing Officer for fresh consideration.

What were the facts?

The assessee appealed against a penalty levied under Section 271(1)(c) of the Income Tax Act. The penalty was based on an addition that was subsequently set aside by the ITAT in a separate appeal.

What were the issues?

Whether a penalty under Section 271(1)(c) can be sustained when the underlying addition has been set aside. The principle of natural justice and consequential nature of penalty.

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 ‘D’, NEW DELHI

Hearing: 04.07.2017Pronounced: 04.07.2017

ORDER

Per N. K. Saini, AM:

1.

This is an appeal by the assessee against the order dated 21.10.2013 of ld. CIT(A)-XIX, New Delhi.

2.

The only grievance of the assessee in this appeal relates to the sustenance of penalty levied by the AO u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act).

3.

During the course of hearing, the ld. Counsel for the assessee at the very outset stated that the quantum addition on the basis of which the impugned penalty was levied by the AO and sustained by the ld. CIT(A) was set aside by the ITAT in vide order dated 2 Varsha Spinning Mills Ltd. 27.07.2016 in assessee’s own case. Therefore, the penalty u/s 271(1)(c) of the Act is not leviable, since the addition on the basis of which this penalty was levied has been set aside.

4.

In his rival submissions the ld. DR although supported the orders of the authorities below but could not controvert the aforesaid contention of the ld. Counsel for the assessee.

5.

We have considered the submissions of both the parties and perused the material available on the record. In the present case, it is noticed that the addition on the basis of which the impugned penalty was levied by the AO u/s 271(1)(c) of the Act was a subject matter of the assessee’s appeal in wherein vide order dated 27.07.2016, the issue has been set aside to the file of the AO and the relevant findings have been given in para 4 of the said order which read as under: “4. In view of the above submissions of the parties we are of the considered opinion that due to one reason or other, the assessee could not get opportunity to place his case properly before the AO and CIT(A) and thus to meet ends of justice and to prevent injury caused to it due to violation of principles of natural justice, we find it appropriate to restore the case to the file of the AO for afresh and de novo framing of assessment order after affording due opportunity of hearing to the assessee. We order accordingly.”

3 Varsha Spinning Mills Ltd. 6. In the present case, now, it is clear that the addition on the basis of which the impugned penalty was levied, has been set aside to the file of the AO. Therefore, the issue relating to levy of penalty u/s 271(1)(c) of the Act being consequential is also set aside to the file of the AO.

7.

In the result, the appeal of the assessee is allowed for statistical purposes. (Order Pronounced in the Court on 04/07/2017)

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →