GEE CEE CYCLE BALLS (PVT.) LTTD.,NEW DELHI vs. ITO, NEW DELHI

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ITA 6739/DEL/2015Status: DisposedITAT Delhi28 March 2016AY 2001-023 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 addition on which the penalty was based has been deleted by the ITAT, the penalty does not survive. Following the Supreme Court's decision in K.C. Builders, the penalty is liable to be cancelled.

What were the facts?

The Assessing Officer made an addition of Rs. 5,00,000 on account of cash credit and initiated penalty proceedings. The penalty was confirmed by the CIT(A).

What were the issues?

Whether penalty under Section 271(1)(c) can survive when the underlying addition has been deleted.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

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 ‘SMC-1’, NEW DELHI

Hearing: 08.03.2016Pronounced: 28.03.2016

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC-1’, NEW DELHI Before Sh. N. K. Saini, AM And Smt. Beena Pillai, JM Asstt. Year : 2001-02 Gee Cee Cycle Balls Pvt. Ltd., Vs ITO, B-378, New Friends Colony, Ward-12(1), New Delhi-110048 New Delhi (APPELLANT) (RESPONDENT) PAN No. AAACG4036F Assessee by : Sh. Prabhat Agarwal, CA Revenue by : Sh. Subhakant Sahu, Sr. DR Date of Hearing : 08.03.2016 Date of Pronouncement : 28.03.2016 ORDER Per N. K. Saini, AM:

This is an appeal by the assessee against the order dated 23.10.2015 of ld. CIT(A)-IV, New Delhi.

2.

The only grievance of the assessee in this appeal relates to the confirmation of penalty levied by the AO u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act).

3.

During the course of hearing the ld. Counsel for the assessee at the very outset stated that the addition on the basis of which the penalty u/s 271(1)(c) of the Act was Gee Cee Cycle Balls Pvt. Ltd. levied by the AO has been deleted by the ITAT in for the assessment year 2001-02 vide order dated 30.10.2015 (copy of the said order was furnished which is placed on record). The ld. DR could not controvert the aforesaid contention of the ld. Counsel for the assessee.

4.

After considering the submissions of both the parties and material on record, it is noticed that the AO framed the assessment u/s 147/143(3) of the Act on 10.11.2008 by making an addition of Rs.5,00,000/- on account of cash credit and also initiated the penalty proceedings u/s 271(1)(c) of the Act and levied the penalty of Rs.1,97,750/- which was confirmed by the ld. CIT(A). Now the said addition made by the AO and sustained by the ld. CIT(A) has been deleted by the ITAT vide aforesaid referred to order dated 30.10.2015. Therefore, the addition on the basis of which the impugned penalty u/s 271(1)(c) of the Act was levied is now not inexistence, therefore, the said penalty u/s 271(1)(c) of the Act does not survive. On a similar issue the Hon’ble Supreme Court in the case of K.C Builders Vs ACIT 265 ITR 562 held as under: “Where the additions made in the assessment order on the basis of which penalty for concealment is levied, are deleted, there remains no basis at all for levying penalty for Gee Cee Cycle Balls Pvt. Ltd. concealment and, therefore, in such a case no penalty can survive and the penalty is liable to be cancelled.” 4. In view of the above, the penalty levied by the AO and sustained by the ld. CIT(A) is deleted.

5.

In the result, appeal of the assessee is allowed. (Order Pronounced in the Court on 28/03/2016)

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