M/S BIMEL RESINS PVT. LTD.,DELHI vs. ITO, NEW DELHI

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ITA 98/DEL/2016Status: DisposedITAT Delhi06 May 2016AY 2004-053 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 quantum addition, which was the basis for the penalty, was set aside and restored to the AO, the penalty order could not survive. The occasion to levy or uphold the penalty did not arise.

What were the facts?

The assessee appealed against a penalty order upheld by the CIT(A). The original quantum appeal, which formed the basis for the penalty, had been restored to the Assessing Officer by the ITAT.

What were the issues?

Whether a penalty order can survive when the underlying addition forming its basis has been set aside and restored to the Assessing Officer.

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, DELHI BENCH: ‘SMC’ NEW DELHI

Before: SMT DIVA SINGH

Hearing: 14.03.2016Pronounced: 06.05.2016

Date of Hearing 14.03.2016 Date of Pronouncement 06.05.2016 ORDER The present appeal has been filed by the assessee assailing the correctness of the order dated 18/09/2015 of CIT(A)-2, New Delhi pertaining to 2004 – 05 assessment year wherein the assessee has assailed the finding of the CIT(A) in upholding the penalty imposed by the Assessing Officer.

2.

On behalf of the Revenue, an adjournment has been moved stating that Ld. Sr. DR is on leave. On going through the same, it is seen that apart from carrying some indecipherable initial it neither names the person who has moved it nor does it reflect the designation of the person petitioning for time. No one was present in support of the petition moved. The moving of the petition in such a casual way is not appropriate. The application accordingly was rejected and it was considered appropriate to proceed with the present appeal ex-parte qua the Revenue Respondent on merits. Before we address the issues it may also be I.T.A .No.-98/Del/2016 pertinent to note that the Registry has pointed out a defect in regard to shortage in the Tribunal’s fee on 04/02/2016 subsequently by order sheet entry dated 23/05/2016 the Registry has noted that the defect has been removed.

2.1. The Ld. AR submitted that the ITAT restored the Quantum appeal to the AO. Accordingly the penalty order based on the order which no longer existed in the eyes of law as a result of this set aside cannot survive. Inviting attention to the Paper Book page No. 37 to 39 it was submitted that the additions upheld by the CIT(A) challenged by the assessee in appeal before the ITAT have been set aside back to the file of the Assessing Officer vide order dated 02/09/2015 in ITA 791/Del/2013. Accordingly in the circumstances it was his submission that since the very basis of the penalty order has been restored the occasion for the penalty to survive does not arise. It was his submission that whether the penalty is to be imposed or not at all is a decision which can be taken only by the Assessing Officer and that too at the stage when the issue is decided in the quantum proceedings by him. Accordingly it was his submission that the penalty order cannot survive.

3.

Having heard the submissions and perused the material available on record, I am of the view that in the peculiar facts and circumstances of the case the appeal of the assessee is to be allowed. Whether the ingredients of the penalty under section 271(1)(c) are fulfilled or not is a view which has to be formed by the AO. Since the very basis of the same i.e. the quantum order itself has been restored to the Assessing Officer the occasion to levy penalty or uphold the penalty imposed does not arise. In the absence of any representation on behalf of I.T.A .No.-98/Del/2016 the Revenue to the contrary and being satisfied by the reasons and explanation offered by the assessee in the facts of the present case the penalty order becomes infructuous at this stage. The impugned order is set aside and the appeal of the assessee consequently is allowed.

4.

In the result the appeal of the assessee is allowed.

The order is pronounced in the open court on 06 of May, 2016.

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