DCIT 15(3)(1), MUMBAI vs. WARTSILA INDIA LTD, MUMBAI

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ITA 2528/MUM/2015Status: DisposedITAT Mumbai13 February 2017AY 2007-083 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the additions on which the penalty was levied were subsequently deleted by the ITAT in quantum proceedings, the penalty is no longer sustainable and must be deleted.

What were the facts?

The Assessing Officer levied a penalty under Section 271(1)(c) based on disallowances for provision for trading guarantee and professional fees. The CIT(A) cancelled this penalty.

What were the issues?

Whether a penalty under Section 271(1)(c) can be sustained when the underlying additions have been deleted by a higher appellate authority.

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, “I” Bench, Mumbai

Before: Shri B.R. Baskaran (AM)& Sandeep Gosain (JM)

For Appellant: Shri Shreyam B. Shah
For Respondent: Shri Saurabh Kumar
Hearing: 13.2.2017Pronounced: 13.2.2017

Heard together (2 matters)

I.T.A. No. 2528/Mum/2015
C.O. No. 193/Mum/2016

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R Per Sandeep Gosain (JM) :-

The appeal filed by the Revenue and the Cross objection filed by the assessee are directed against the order dated 19.1.2015 passed by the learned CIT(A)-8, Mumbai-8, Mumbai and they relate to A.Y. 2007-08. The Revenue is aggrieved by the decision of the learned CIT(A) in cancelling the penalty of ` 45 lakhs levied by the Assessing Officer u/s. 271(1)(c) of the Act. The assessee has filed the cross objection supporting the order passed by the learned CIT(A).

2 M/s. Wartsila India Limited

2.

We have heard the parties and perused the record. The Assessing Officer levied the penalty u/s. 271(1)(c) of the Act on the following disallowances made by him :- a) Provision for trading guarantee ` 1,03,34,220/- b) Professional fees ` 30,36,122/- The learned CIT(A) confirmed the addition in the appeal filed by the assessee and hence the Assessing Officer levied penalty of ` 45,00,457/- u/s. 271(1)(c) of the Act. The assessee filed the appeal before the learned CIT(A) challenging the penalty levied u/s. 271(1)(c) of the Act and the same was allowed by the learned CIT(A). Aggrieved, the Revenue has filed this appeal before us.

3.

At the time of hearing, learned counsel appearing for the assessee submitted that it had also challenged the order passed by the learned CIT(A) in quantum proceedings confirming the above said two additions, by filing the appeal before the ITAT. The Tribunal, vide its order dated 5.6.2015 passed in has reversed the order passed by the learned CIT(A) and directed the Assessing Officer to delete the above said two disallowances. Accordingly, the assessee submitted that the additions, on which the impugned penalty was levied, no longer exist and hence, the impugned penalty is liable to be deleted.

4.

Learned Departmental Representative did not contradict the factual aspect presented by the assessee.

5.

Since the additions, on which the penalty was levied, have been deleted by the Tribunal by the order referred supra, we find merit in the contentions of the assessee that the impugned penalty is liable to be deleted. Accordingly, we uphold the decision of the learned CIT(A) in cancelling the impugned penalty for the reasons cited above.

6.

Since we have dismissed the appeal of the revenue, the Cross objection filed by the assessee does not require consideration.

3 M/s. Wartsila India Limited

7.

In the result, the appeal filed by the Revenue and the cross objection filed by the assessee are dismissed.

Order has been pronounced in the Court on 13.2.2017.

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