M/S PRASAD & CO. PVT. LTD.,NEW DELHI vs. ITO, NEW DELHI

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ITA 5588/DEL/2013Status: DisposedITAT Delhi16 September 2016AY 2005-064 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 observed that the addition made by the AO, which formed the basis for the penalty, was subsequently deleted by the Tribunal in quantum proceedings. Therefore, the penalty cannot be sustained.

What were the facts?

The assessee filed a return declaring a loss. The Assessing Officer made an addition of Rs. 12,95,636 and imposed a penalty under Section 271(1)(c). This penalty was affirmed by the CIT(A).

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the addition forming its basis has been deleted.

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 BENCHES ‘F’, NEW DELHI

Before: SHRI R.S. SYAL & SMT.BEENA A PILLAI

Hearing: 14.09.2016

PER RS SYAL, ACCOUNTANT MEMBER

1.

This appeal by the assessee arises out of the order passed by the Ld.CIT(A)-XVII, New Delhi dated 12.08.2013 affirming the levy of penalty of Rs.4,53,474/- imposed by the Assessing Officer (A.O.)

2 u/s 271(1)(c) of the Income Tax Act, 1961 (the Act) in relation to the Assessment Year 2005-06.

2.

Briefly stated the facts of the case are that the assessee filed return declaring loss of Rs.1,40,938/-. The A.O. on the basis of the discussion made in the assessment order made an addition of Rs.12,95,636/- and consequently computed total income at Rs.11,54,700/-. It is on the basis of this addition that he imposed penalty u/s 271(1)(c) of the Act of Rs.4,53,473/- which came to be affirmed in the First Appeal. The assessee is aggrieved by the confirmation of penalty.

3.

Having heard the rival submissions and perusing the relevant material available on record, it is observed that the addition of Rs.12,95,636/- made by the A.O. was challenged by the assessee in quantum proceedings before the Tribunal. The said addition came to be deleted by the Tribunal vide its order dt. 31.12.2014 in ITA no.419/Del/12. In view of the fact that the very foundation for imposing the penalty, being the addition of Rs.12,95,663/- stands officially deleted, there can be question of 3 any penalty u/s 271(1)(c) of the Act on this score. We therefore delete the penalty.

4.

In the result the appeal is allowed.

The order pronounced in the open court on 16.09.2016.

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