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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. N. K. Saini
ORDER This is an appeal by the assessee against the order dated 24.08.2015 of ld. CIT(A), Faridabad.
Following grounds have been raised in this appeal: “1. The order of the ld. Commissioner Income Tax Appeals Faridabad confirming the penalty of Rs.168677 u/s 271(1)(c) of the Income Tax Act, 1961 does not hold good and erroneous as the relevant quantum addition has been deleted by the hon’ble Income Tax Appellate Tribunal.
2. On the facts and circumstances of the case the ld. Commissioner of Income Tax Appeals Faridabad erred in confirming the penalty of Rs.168677 u/s 271(1)(c) of the Income Tax Act, 1961.
2 Anil Gupta 3. The appellant on the facts and circumstances of the case denies to be levied penalty of Rs.168677 u/s 271(1)(c) of the Income Tax Act, 1961.
The assessee craves leave to add, amend, delete, and modify any grounds of the appeal before/during the hearing of the appeal and all the above grounds are without prejudice to each other.”
During the course of hearing the ld. Counsel for the assessee furnished the copy of the order dated 27/10.2016 of the Tribunal in and submitted that the addition on the basis of which impugned penalty was levied, has been deleted. The aforesaid contention of the ld. Counsel for the assessee was not controverted by the ld. DR.
4. After considering the submissions of both the parties, it appears that the addition on the basis of which penalty was levied by the AO and sustained by the ld. CIT(A) has been deleted in vide order dated 27.10.2016 by the ITAT Bench ‘A’, New Delhi. Since the addition has been deleted, so the penalty u/s 271(1)(c) of the Income- tax Act, 1961 is not leviable. On a similar issue the Hon’ble Supreme Court in the case of K. C. Builders & Others Vs ACIT (2004) 265 ITR 562 wherein it has been held as under: “Where the additions made in the assessment order on the basis of which penalty for concealment is levied, are deleted, there remains no basis at all for levying penalty for concealment and, therefore, in such a case no penalty can survive and the penalty is liable to be 3 Anil Gupta cancelled. Ordinarily, penalty cannot stand if the assessment itself is set aside.”
I, therefore, by keeping in view the ratio laid down by the Hon’ble Supreme Court deleted the penalty levied by the AO and sustained by the ld. CIT(A).
In the result, the appeal of the assessee is allowed. (Order Pronounced in the Court on 30/05/2017)