DSC LIMITED,NEW DELHI vs. ACIT, CENTRAL CIRCLE- 14, NEW DELHI

PDF · subscribers
ITA 6757/DEL/2018Status: DisposedITAT Delhi19 July 2021AY 2006-074 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 reassessment proceedings themselves were previously quashed by the Tribunal, the additions made during those proceedings do not survive. Consequently, the penalty levied based on these additions also has no basis.

What were the facts?

The Assessing Officer (AO) levied a penalty under Section 271(1)(c) of the Income Tax Act, 1961, which was upheld by the CIT(A). The assessee's appeal is against this penalty.

What were the issues?

The primary issue is whether a penalty under Section 271(1)(c) can survive when the underlying reassessment proceedings have been quashed.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES “B” : DELHI

Before: SHRI R.K. PANDA & SHRI AMIT SHUKLA

Hearing: 19.07.2021Pronounced: 19.07.2021

ORDER PER R.K. PANDA, A.M. This appeal filed by the Assessee is directed against the Order dated 03.08.2018 of the Ld. CIT(A)-XXVI, New Delhi, relevant to the A.Y. 2006-2007.

2.

Levy of penalty of Rs.1,01,54,933/- under section 271(1)(c) of the I.T. Act, 1961 by the A.O. and upheld by the 2 ITA.No.6757/Del./2018 M/s. DSC Limited, New Delhi. Ld. CIT(A) is the only issue raised by the assessee in the grounds of appeal.

1.

3. Learned Counsel for the Assessee, at the outset, submitted that the A.O. has passed the order under section 147/143(3) of the I.T. Act, 1961, determining the total income of assessee at Rs.57,19,15,422/- as against the returned income of Rs.54,16,13,061/-. Referring to the order of the Tribunal in ITA.No.146/Del./2015 Dated 31.10.2018, for the A.Y. 2006-2007, the Learned Counsel for the Assessee submitted that the Tribunal has quashed the re-assessment proceedings, therefore, once the re- assessment proceedings are quashed, the penalty does not survive. He accordingly submitted that the Order of the Ld. CIT(A) in confirming the penalty levied by the A.O. under section 271(1)(c) of the I.T. Act should be deleted.

4.

The Ld. D.R. on the other hand, supported the Order of the Ld. CIT(A).

3 ITA.No.6757/Del./2018 M/s. DSC Limited, New Delhi.

5.

We have heard the rival arguments made by both sides, perused the Orders of the A.O. and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We find that as against the returned income of Rs.54,14,79,842/-, the A.O. completed the assessment under section 147/143(3) of the I.T. Act, 1961 determining the total income of the assessee at Rs.57,19,15,422/- wherein he made addition of Rs.3,01,69,142/- on account of unverifiable purchases and Rs.1,33,219/- under section 14A read with Rule 8D. It may be pertinent to mention herein that the original assessment order was completed under section 143(3) on 15.10.2008 determining the total income at Rs.54,16,13,061/-. We find the A.O. initiated the penalty proceedings subsequently and levied the penalty of Rs.1,01,54,933/- @ 100% of tax sought to be evaded under section 271(1)(c) of the I.T. Act, 1961, which has been upheld by the Ld. CIT(A). We find the Tribunal in the quantum proceedings in ITA.No.146/Del./ 2015 Order Dated 31.10.2018 has already quashed such re- assessment proceedings. Therefore, once the re-assessment proceedings are quashed, the addition does not survive.

4 ITA.No.6757/Del./2018 M/s. DSC Limited, New Delhi. Since the addition does not survive, the penalty also has no legs to stand and has to be deleted. Accordingly, the Order of the Ld. CIT(A) sustaining the penalty is set aside and the grounds raised by the Assessee are allowed.

6.

In the result, appeal of the Assessee is allowed.

Order pronounced in the open Court at the time of hearing itself i.e., on 19.07.2021.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →