SH. PAWAN KUMAR JAIN,NEW DELHI vs. ACIT, NEW DELHI

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ITA 6668/DEL/2013Status: DisposedITAT Delhi01 June 2016AY 2004-054 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 additions made by the AO, which formed the basis for the penalty, were subsequently deleted by a coordinate bench of the Tribunal in the assessee's own case, the penalty was not sustainable.

What were the facts?

The Assessing Officer initiated penalty proceedings under Section 271(1)(c) for filing inaccurate particulars and concealment of income, based on additions made for unexplained investment in unsecured loans. The CIT(A) confirmed these penalty orders.

What were the issues?

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

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 68,Section 153C,Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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

Before: SHRI N.K. BILLAIYA & SHRI KULDIP SINGH

For Appellant: Shri Saubhagya Agarwal, Advocate
For Respondent: Smt. Deepika Mittal, CIT DR
Hearing: 25.09.2019

Date of Hearing : 25.09.2019 Date of Order : 01.10.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : Since common questions of facts and law have been raised in the aforesaid appeals, the same are being disposed off by way of consolidated order to avoid repetition of discussion.

2.

Appellant, Shri Pawan Kumar Jain (hereinafter referred to as the ‘assessee’) by filing the present appeals sought to set aside the impugned orders both dated 25.10.2013 passed by the Commissioner of Income - tax (Appeals)-XII, New Delhi affirming the penalty orders both dated 27.11.2012 passed u/s 271(1)(c) of the Income-tax Act, 1961 (for short ‘the Act’), qua the assessment years 2004-05 & 2006-07 on the identical ground except the difference in amount that :-

“That the CIT (A) is erred under the law while confirming the order of A.O. imposing the penalty of Rs.1,20,000/- & Rs.2,07,337/- for AYs 2004-05 & 2006- 07 respectively u/s 271(1)(c) of the Act for filing inaccurate particulars of income and its concealment.” 3. Briefly stated the facts necessary for adjudication of the issue at hand are : On the basis of assessment completed under section 153C read with section 143 (3) of the Act, penalty proceedings were initiated in both the aforesaid cases on the ground that addition of Rs.4,00,000/- & Rs.7,00,000/- on account of unexplained investment in unsecured loans for AYs 2004-05 & 2006-07 respectively u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income and concealing particulars of income. Declining the contentions raised by the assessee, Assessing Officer (AO) proceeded to levy the penalty of Rs.1,20,000/- & Rs.2,07,337/- for AYs 2004-05 & 2006-07 respectively.

4.

Assessee carried the matter by way of an appeal before the ld. CIT (A) who has confirmed the penalties by dismissing the appeals. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeals.

5.

We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.

6.

At the very outset, it is brought to our notice by the ld. AR for the assessee that addition made in both the aforesaid cases u/s 68 of the Act has since been deleted by the Tribunal in assessee’s own case in & 3080/Del/2012 for AYs 2004-05 & 2006-07 respectively vide order dated 01.01.2016 and contended that the penalty levied and confirmed by the ld. CIT (A) is not sustainable and brought on record the copy of the order of the Tribunal dated 01.01.2016.

7.

Undisputedly, coordinate Bench of the Tribunal vide order dated 01.01.2016 (supra) in assessee’s own case deleted the addition made by the AO and confirmed by the ld. CIT (A) in both the aforesaid cases qua AYs 2004-05 & 2006-07. In these circumstances, penalty levied by the AO and confirmed by the ld. CIT (A) is not sustainable in view of the law laid down by the Hon’ble Supreme Court in K.C. Builders & Anr. Vs. ACIT 265 ITR 562 (SC) because, “when the addition made in the assessment order on the basis of which penalty for concealment is levied have been deleted there remains no basis at all for levying the penalty for concealment and in such case, no penalty can survive and the penalty is liable to be cancelled.” So, in view of the matter, penalties levied by the AO and confirmed by the ld. CIT (A) to the tune of 1,20,000/- & Rs.2,07,337/- for AYs 2004-05 & 2006-07 respectively is ordered to be deleted. Consequently, both the appeals filed by the assessee stand allowed. Order pronounced in open court on this 1st day of October, 2019.

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