DCIT (EXEMPTION), GHAZIABAD vs. FRIENDS CHARITABLE SOCIETY, GHAZIABAD

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ITA 7196/DEL/2018Status: DisposedITAT Delhi29 July 2021AY 2010-113 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal affirmed the order of the CIT(A) which deleted the penalty. This was because the substantial addition on which the penalty was based had itself been deleted by the Tribunal.

What were the facts?

The Revenue appealed against the deletion of penalty levied under Section 271(1)(c) by the CIT(A). The penalty was related to additions made for hostel receipts treated as business income.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying addition has been deleted. The consequential impact of deletion of quantum addition on penalty.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 275(1A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI “B” BENCH: NEW DELHI

Before: SHRI KUL BHARAT & SHRI O.P.KANT

For Respondent: Ms. Nidhi Srivastava, CIT DR
Hearing: 14.07.2021Pronounced: 29.07.2021

ORDER PER KUL BHARAT, JM :

This appeal filed by the Revenue for the assessment year 2010-11 is directed against the order of Ld. CIT(A), Ghaziabad dated 31.08.2018. The Revenue has raised following grounds of appeal:-

1. "The ld.CIT(A) has erred in law and facts in deleting the penalty levied u/s 271(1)(c) of the IT Act while assessee has been found to have indulged in business activities in respect of hostel receipts.

2. The order of Ld.CIT(A) be cancelled and the order of the Assessing Officer be restored.”

2. The only effective ground raised by the Revenue in this appeal is against the deletion of penalty imposed u/s 271(1)(c) of the Income Tax Act, 1961 (“the Act”). No one appeared on behalf of the assessee.

3.

Ld. CIT DR supported the order of the Assessing Officer.

4. We have heard Ld. CIT DR and perused the material available on record. It is noticed that Ld.CIT(A) deleted the penalty on the ground that quantum was deleted. Ld. CIT DR could not controvert the findings of Ld.CIT(A) that quantum of penalty of Rs.72,75,100/- imposed u/s 271(1)(c) of the Act, is reduced to NIL as the substantial quantum of addition of Rs. 2,35,43,997/-being surplus from hostel activity which was treated as business income and has been deleted by the Tribunal. Ld.CIT(A) has given liberty to the Assessing Officer to take action u/s 275(1A) of the Act in the event the assessment order gets revised. We do not see any infirmity in the order of Ld. CIT(A) and same is hereby affirmed. Thus, Grounds of the appeal raised by the Revenue are dismissed.

4.

In the result, the appeal of the Revenue is dismissed.

Above decision was pronounced on conclusion of Virtual Hearing in the presence of both the parties on 29th July, 2021.

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