M/S. IMPERIAL AUTO INDUSTRIES LTD.,NEW DELHI vs. DCIT, FARIDABAD

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ITA 4603/DEL/2016Status: DisposedITAT Delhi24 May 2018AY 2008-093 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 noted that the addition made for unexplained investment in agricultural land, which was the basis for the penalty, had already been deleted by the Tribunal in a prior order. Therefore, the penalty was not sustainable.

What were the facts?

The assessee appealed against a penalty levied under Section 271(1)(c) of the Income Tax Act. This penalty was based on an addition made for undisclosed investment in agricultural land under Section 69.

What were the issues?

Whether a penalty under Section 271(1)(c) can survive if the underlying addition on which it was based has been deleted.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI

Before: SHRI S.K. YADAV & SHRI PRASHANT MAHARISHI

For Appellant: Dr. Rakesh Gupta, Adv
Hearing: 23.05.2018Pronounced: 24.05.2018

ORDER PER SHRI S.K. YADAV, J.M. This appeal is preferred by the assessee against the order of the Commissioner of Income Tax (Appeals) (for short called as the ‘CIT (A)’) on a solitary ground that CIT(A) has confirmed the penalty of Rs. 48,02,149 u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter called as the ‘Act’) levied by the Assessing Officer (hereinafter called as the ‘AO’).

2.

During the course of hearing, Ld. Counsel for the assesse has invited our attention that penalty u/s 271(1)(c) of the Act was levied on account of addition of Rs. 1,41,28,125/- made for undisclosed investment in agricultural land u/s 69 of the Act. The addition was challenged before the Tribunal and the Tribunal vide its order dated 19.04.2018 has deleted the addition made u/s 69 of the Act. Since the addition for which the penalty u/s 271(1)(c) of the Act was levied, has been deleted, penalty does not survive. Therefore, the same may be deleted. Copy of the order of Tribunal deleting the addition is placed on record.

3.

The ld. DR did not dispute the factual aspect.

4.

Having carefully examined the order of the Tribunal in quantum and the order of the lower authorities, we find that the addition made on account of unexplained investment in agricultural land for which the impugned penalty was levied u/s 271(1)(c) of the Act, has been deleted by the Tribunal. Therefore, the impugned penalty is not sustainable in the eyes of law. We, therefore, set aside the order of the CIT(A) and delete the penalty levied u/s 271(1)(c ) of the Act.

5.

In the result, the appeal of the assessee stands allowed.

Order pronounced in the open court on 24.05.2018

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