M/S. VASUNDRA MARBELS,GHAZIABAD vs. ITO, GHAZIABAD

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ITA 275/DEL/2013Status: DisposedITAT Delhi05 September 2016AY 2005-063 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay and admitted the appeal. It held that penalty cannot be sustained where the addition itself has been deleted, directing the Assessing Officer to levy the minimum penalty on the sustained addition of ₹70,000/-.

What were the facts?

The assessee filed an appeal against a penalty of ₹7,38,940/- with a significant delay. The assessee claimed the delay was due to a bona fide impression that the penalty would be automatically cancelled if the addition was deleted.

What were the issues?

Whether the penalty levied is sustainable when the primary addition has been deleted, and the issue of delay in filing the appeal against the penalty.

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, IN THE INCOME TAX APPELLATE TRIBUNAL

Before: SHRI G.D. AGRAWALG.D. AGRAWAL & AND BEFORE SHRI G.D. AGRAWALG.D. AGRAWAL & AND SHRI CHANDRA MOHAN GARG SHRI CHANDRA MOHAN GARGSHRI CHANDRA MOHAN GARG SHRI CHANDRA MOHAN GARG

For Appellant: Shri Sanat Kapoor, Advocate
For Respondent: Shri Umesh Chandra Dubey
Hearing: 29.08.2016Pronounced: 05.09.2016

PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP :- PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP This appeal by the assessee for the assessment year 2005-06 is directed against the order of learned CIT(A), Ghaziabad dated 3rd March, 2011.

2.

The only ground raised by the assessee is against the levy of penalty of `7,38,940/-.

3.

We find that there is a delay of 624 days in filing of the appeal. At the time of hearing before us, it is submitted by the learned counsel for the assessee that the assessee was under the bona fide impression that it has already filed the appeal against the addition made by the Assessing Officer and once the addition would be deleted, the penalty would automatically be cancelled. Under this bona fide belief, the assessee did not file the appeal against the levy of penalty. However,

1.

2 ITA-275/Del/2013 subsequently, assessee was advised to file separate appeal against the levy of penalty. Therefore, the assessee filed the appeal. That this bona fide impression was the reason for delay in filing of the appeal against the levy of penalty. He further stated that in the quantum appeal, in fact, all the additions have been deleted except the small addition of `70,000/-.

4.

Learned DR stated that in view of the above submission of the learned counsel, the penalty should be sustained to the extent of addition sustained. Learned counsel for the assessee has no objection to the above submission of the learned DR.

5.

After considering the facts of the case and submissions of both the parties, we deem it proper to condone the delay in filing of the appeal and the same is admitted. Admittedly, the penalty cannot be sustained where the addition itself has been deleted. The learned counsel for the assessee has pointed out that after the appeal to ITAT, the only addition sustained is `70,000/-. He also stated that there is no concealment of income with regard to the addition sustained for `70,000/-. However, he would have no objection if the minimum penalty is sustained thereon due to smallness of quantum of penalty. In view of the above, we direct the Assessing Officer to levy the minimum penalty on the addition of `70,000/- sustained by the ITAT. The penalty on the remaining amount is deleted.

6.

In the result, the appeal of the assessee is partly allowed. Decision pronounced in the open Court on 05.09.2016.

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