ACIT, NEW DELHI vs. SEEMA DEVI BANSAL, NEW DELHI

The only grievance of the department in this appeal relates to the deletion of penalty of Rs.64,44,609/- levied by the AO u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act).

Facts of the case in brief are that the assessee filed the return of income on 29.01.2010 declaring an income of Seema Devi Bansal Rs.1,75,825/-. However, the assessment was framed by the AO at an income of Rs.1,93,44,724/- by making the addition of Rs.1,91,68,900/-. The AO also levied the penalty u/s 271(1)(c) of the Act amounting to Rs.64,44,609/-.

Being aggrieved the assessee carried the matter to the ld. CIT(A) who deleted the penalty by observing that the addition on the basis of which penalty u/s 271(1)(c) of the Act was levied by the AO, has been deleted by the ITAT. The relevant findings have been given in para 3.2 of the impugned order which read as under: “3.2 I have gone through the penalty order, submissions filed on behalf of the appellant and the order of Hon’ble ITAT dated 28.02.2013 in wherein the addition made by the revenue has been deleted. As the quantum addition has been deleted, the penalty imposed does not survive and is hereby deleted.”

Now the department is in appeal. The ld. DR strongly supported the order of the AO but could not controvert the findings given by the ld. CIT(A).

In his rival submissions the ld. Counsel for the assessee strongly supported the order of the ld. CIT(A) and Seema Devi Bansal further submitted that the addition on the basis of which penalty was levied by the AO has been deleted by the ITAT in vide order dated 28.02.2013. He also submitted that the said order of the ITAT has been affirmed by the Hon’ble Jurisdictional High Court in ITA No. 498/2013 vide order dated 11.11.2013 (copy of the aforesaid orders were furnished which is placed on record).

We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the addition on the basis of which penalty was levied by the AO u/s 271(1)(c) of the Act now stands deleted vide order dated 28.02.2013 by the ITAT Bench ‘G’, New Delhi in ITA No. 342/Del/2013. The said order has been affirmed by the Hon’ble Jurisdictional High Court vide order dated 11.11.2013 in ITA No. 498/2013. Therefore, it is clear that the addition on the basis of which penalty u/s 271(1)(c) of the Act was levied by the AO is not in existence. 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 Seema Devi Bansal concealment and, therefore, in such a case no penalty can survive and the penalty is liable to be cancelled.” 8. In view of the above, we do not see any merit in the appeal of the department.

In the result, appeal of the department is dismissed. (Order Pronounced in the Court on 05/01/2016)