HIKAL LTD,MUMBAI vs. DCIT CIR 3(1), MUMBAI

The only issue raised by the assessee in this appeal is against the confirmation of penalty of `37,68,299/- by the CIT(A) as imposed by the AO under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter “the Act”) for concealment of income.

At the outset the learned A.R. for the assessee pointed out that the quantum appeal in connection with which this penalty has been levied stands decided in favour of the assessee by the order dated 17.02.2016 passed in for A.Y. 2003-04 by the coordinate bench wherein the assessment order passed u/s 143(3) r.w.s. 147 of the Act has been declared invalid and quashed. The learned A.R. submitted that since the assessment order has been quashed, the penalty, which is M/s. Hikal Limited the subject matter of the present appeal, has no legs to stand and therefore the penalty be deleted.

The learned D.R. fairly agreed with the contention and the arguments of the learned A.R.

We have heard the rival submissions and perused the material on record. We find that the quantum appeal has been decided by the order of the Coordinate Bench in for A.Y. 2003-04 wherein the reassessment proceedings under Section 147 has been declared to be invalid and therefore in view of the said order, the penalty levied by the AO and sustained by the CIT(A) is ordered to be deleted.

In the result, the appeal filed by the assessee is allowed.