ORIENTAL INSURANCE COMPANY LTD.,NEW DELHI vs. ACIT LTU, NEW DELHI

PDF · subscribers
ITA 5952/DEL/2012Status: DisposedITAT Delhi31 December 2015AY 2004-054 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal cancelled the penalty, stating that since the basis for the penalty (the Tribunal's quantum appeal order) was set aside by the High Court, the penalty no longer survived.

What were the facts?

The assessee's appeal was against the CIT(A)'s order upholding a penalty under Section 271(1)(c). The penalty was levied based on a previous Tribunal order.

What were the issues?

Whether a penalty levied under Section 271(1)(c) can survive if the underlying order forming the basis of the penalty is subsequently set aside by a higher court.

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: ‘E’ : NEW DELHI

Before: SHRI CHANDRA MOHAN GARG, & SHRI L.P. SAHU,

For Appellant: Shri Tarandeep Singh, CA
Hearing: 17.12.2015Pronounced: 31.12.2015

PER CHANDRA MOHAN GARG, JUDICIAL MEMBER

1.

This appeal filed by the assessee is directed against the order of the CIT(A)-LTU, New Delhi, dated 10/10/2012 for A.Y 2004-05.

2.

The only ground raised in this appeal by the assessee relates to the upholding of the penalty u/s 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] by the ld. CIT(A).

3.

At the very outset of the opening of the arguments, the ld. AR referred to the decision of the Hon'ble High Court of Delhi in the case of the very assessee itself in dated 15th September, 2105 wherein at para No. 24, the Hon'ble High Court has set aside the order passed by the Tribunal by allowing the appeal of the assessee. In view of the said decision, the ld. AR prayed that the penalty levied by the AO and sustained by the ld. CIT(A) may be cancelled.

4.

On the other hand, the ld. DR supported the orders of the authorities below.

5.

We have heard the rival submissions and have perused the relevant material on record. We find that the basis of levy of penalty in this case is the Tribunal order in the quantum appeal. Since the penalty was levied on the basis of the order of the Tribunal dated 20.07.2011 which the Hon'ble High Court in the case of the assessee itself [supra] has set aside vide para 24 order dated 15.09.2015, the penalty does not survive and the 2

same is hereby cancelled. Para 24 of the order of the Hon'ble High Court is reproduced hereinbelow for ready reference:

“In view of the aforesaid, we find considerable merit in the contention of the assessee that the AO did not have the jurisdiction to tax the profits and gains from sale/realization of investments u/s 147 of the Act. The first and the third questions of law are therefore, answered in favour of the assessee and against the revenue. In view of our decision that the AO could not assume jurisdiction to reopen the assessment u/s 147 of the Act, it is not necessary to address and the second question of law, which relates to the taxability of profits on sale of investments on merits.”

In view of the above, the grounds raised by the assessee stand allowed by deleting the penalty levied by the AO and confirmed by the ld. CIT(A).

8.

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

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →