SH. RAJIV JAIN,NEW DELHI vs. ACIT, NEW DELHI

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ITA 5731/DEL/2013Status: DisposedITAT Delhi20 September 2016AY 2007-083 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 held that since the addition forming the basis for the penalty was deleted and no longer existed, the penalty under Section 271(1)(c) could not survive. The penalty was consequently deleted.

What were the facts?

The Assessing Officer (AO) made an addition of Rs. 65,00,000/- under Section 68 and initiated penalty proceedings under Section 271(1)(c). The penalty was confirmed by the CIT(A). However, the ITAT later deleted the addition, a decision upheld by the High Court.

What were the issues?

Whether a penalty under Section 271(1)(c) can be sustained when the underlying addition on which it was levied has been deleted by a higher appellate authority.

Which sections of the Income-tax Act were involved?

Section 68,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI

For Appellant: Ms. Sumangla Saxena, Adv
Hearing: 19.09.2016Pronounced: 20.09.2016

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’, NEW DELHI Before Sh. N. K. Saini, AM And Smt. Beena Pillai, JM Asstt. Year : 2007-08 Sh. Rajiv Jain, Vs Asstt. Commissioner of Income I-42, Ashok Vihar, Phase-I, Tax, Central Circle-1, New Dehi-110052 New Delhi-110055 (APPELLANT) (RESPONDENT) PAN No. AAJPJ0074G Assessee by : Ms. Sumangla Saxena, Adv. Revenue by : Sh. F. R. Meena, Sr. DR Date of Hearing : 19.09.2016 Date of Pronouncement : 20.09.2016 ORDER Per N. K. Saini, AM:

This is an appeal by the assessee against the order dated 26.08.2013 of ld. CIT(A)-III, New Delhi.

2.

The only grievance of the assessee in this appeal relates to the confirmation 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 addition on the basis of which the penalty u/s 271(1)(c) of the Act was Rajiv Jain levied by the AO has been deleted by the ITAT in for the assessment year 2007-08 vide order dated 25.07.2014 (copy of the said order was furnished which is placed on record). We may mention that the Hon’ble Delhi High Court vide its order dated 12.10.2105 in ITA No. 351/2015 has confirmed the order of the ITAT. The ld. DR could not controvert the aforesaid contention of the ld. Counsel for the assessee.

4.

After considering the submissions of both the parties and material on record, it is noticed that the AO framed the assessment u/s 143(3) of the Act on 24.12.2009 by making an addition of Rs.65,00,000/- u/s 68 of the and also initiated the penalty proceedings u/s 271(1)(c) of the Act and levied the penalty of Rs.21,87,900/- which was confirmed by the ld. CIT(A). Now the said addition made by the AO and sustained by the ld. CIT(A) has been deleted by the ITAT vide aforesaid referred to order dated 25.07.2014 which has also been upheld by the Hon’ble High Court as referred to above. Therefore, the addition on the basis of which the impugned penalty u/s 271(1)(c) of the Act was levied is now not in existence, therefore, the said penalty u/s 271(1)(c) of the Act does not survive. On a similar issue the Hon’ble

Rajiv Jain Supreme Court in the case of K.C Builders Vs ACIT 265 ITR 562 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 cancelled.” 4. In view of the above, the penalty levied by the AO and sustained by the ld. CIT(A) is deleted.

5.

In the result, appeal of the assessee is allowed. (Order Pronounced in the Court on 20/09/2016)

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