ABHITECH ENERGYCON LTD,MUMBAI vs. ACIT CC 20, MUMBAI

In brief, the relevant facts are that the Assessing Officer in the assessment finalised u/s 143(3) of the Act on 26.12.2011 made an addition of Rs.3,18,07,827/- on account of wrong claim of deduction u/s 80-IC of the Act and had initiated separately, penalty proceedings u/s 271(1)(c) of the Act. The Assessing Officer levied penalty of Rs.1,08,14,272/- being 100% of the tax sought to be evaded. Even the CIT(A) has affirmed the levy of penalty. Against such a decision of the CIT(A), assessee is in further appeal before us.

At the time of hearing, the learned representative for the assessee pointed out that the quantum proceedings against the disallowance of the claim of deduction u/s 80-IC of the Act has been decided in favour of the assessee by the Tribunal vide its order in dated 13.01.2017. The learned representative also submitted that since the addition, on the basis of which the penalty has been levied u/s 271(1)(c), itself has been deleted by the Tribunal vide its order dated 13.01.2017 (supra), the penalty does not survive.

The ld. DR did not oppose the factual matrix brought out by the learned representative for the assessee.

We have heard the rival submissions. We find that the addition on the basis of which the penalty proceedings were initiated have been deleted by the Tribunal vide its order dated 13.01.2017. Therefore, the penalty levied u/s 271(1)(c) of the Act does not survive and is hereby deleted.

In the result, appeal of the assessee is allowed.