DINESH CHAND SHARMA,GHAZIABAD vs. ITO WARD 3(4), NEW DELHI

This appeal is filed by the assessee against the order of the Ld. CIT(A)-Ghaziabad, dated 31.12.2018 for the assessment year 2008- 09 in sustaining the penalty levied U/s 271(1)(c) of the Act by the Assessing Officer.

At the outset, the Ld. Counsel for the assessee submits that the quantum addition made in reassessment order passed u/s 143(3)/147 of the Act has been deleted by the Tribunal by order

We have heard rival submissions and perused the order of the Tribunal in dated 04.03.2020. We observed that the Tribunal quashed the reassessment order dated 28.10.2015 passed u/s 143(3) r.w.s 147 of the Act in which an addition of Rs.1,50,000/- was made as unexplained cash deposit in to the bank account of the assessee. The Assessing Officer levied penalty U/s 271(1)(c) of the Act on the addition of Rs.1,50,000/- made the reassessment order. However, since the reassessment order has been quashed by the Tribunal by order dated 04.03.2020 in ITA No.5234/Del/2016 the very basis of addition for levy of penalty no longer exists. Therefore, once the very basis of addition is no longer in existence the penalty order will not survive on its own. In the circumstances, we direct the assessing officer to delete the penalty levied U/s 271(1)(c) of the Act for the assessment year under consideration. Grounds raised by the Assessee are allowed.

In the result, appeal of the assessee is allowed.