ITO, WARD- 2(4), NEW DELHI vs. PATRONAGE WELFARE & EDUCATIONAL SOCIETY, NEW DELHI

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ITA 4493/DEL/2017Status: HeardITAT Delhi24 December 2020AY 2006-073 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 quantum addition corresponding to the penalty no longer subsisted, the deletion of the penalty by the CIT(A) was liable to be affirmed. Therefore, the Revenue's appeal against the penalty deletion was allowed.

What were the facts?

The Revenue appealed the deletion of penalty under Section 271(1)(c) by the CIT(A). The CIT(A) had deleted the penalty because the quantum appeal was decided in favor of the assessee. The Revenue's appeal against the quantum addition was dismissed by the ITAT due to low tax effect.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the corresponding quantum addition has been deleted. The impact of the dismissal of the Revenue's appeal on the quantum addition on the penalty proceedings.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘F’ NEW DELHI

Before: SHRI G.S. PANNU & SHRI SUDHANSHU SRIVASTAVA

For Respondent: Shri Sandeep Kumar, Sr. DR
Hearing: 24.12.2020Pronounced: 24.12.2020

PER G.S. PANNU, VICE PRESIDENT

1.

This appeal by the Revenue is directed against the order of learned Commissioner of Income Tax(A)-36, New Delhi dated 28.04.2017 and pertains to assessment year 2006-07 on the following Grounds of appeal:-

“1. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax(A) erred in deleting the penalty under section 271(1)(c) of the Act amounting to Rs. 1,95,28,114/- on the ground that the quantum appeal has been decided in favour of the assessee despite the fact that the assessee ITA 4493/Del/2017 did not comply with the notices sent during the assessment proceedings and the order was passed under section 144 of the Income Tax Act. The department has challenged the decision of the Ld. Commissioner of Income Tax(A) on merits in quantum appeal before the Hon’ble ITAT.”

2.

When the case was fixed for hearing through video conferencing, none appeared on behalf of the assessee. At the time of hearing, the Ld. DR explained that the Commissioner of Income Tax(A) has deleted the penalty on the ground that corresponding addition made in the quantum proceedings has been set aside. It has been reported by the Registry that the appeal of the Revenue against the order of the Commissioner of Income Tax(A) dated 28.04.2017 relating to the quantum proceedings has already been dismissed by the Tribunal vide order dated 10.09.2018 on account of low tax effect (with reference to the CBDT Circular No. 03/2018 dated 11th July, 2018).

3.

As a consequence, the quantum addition corresponding to the instant levy of penalty u/s 271(1)(c) of the Act no longer subsists and, therefore, the impugned order of the learned Commissioner of Income Tax(A) deleting the penalty u/s 271(1)(c) of the Act is liable to be affirmed. We hold so.

4.

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

ITA 4493/Del/2017

Above decision was announced in the presence of the Ld. DR on conclusion of Virtual Hearing on 24th December, 2020.

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