SHRI BHAGWANDAS BAHETI,NEEMUCH vs. THE ITO, NEEMUCH

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ITA 170/IND/2023Status: DisposedITAT Indore15 September 2023AY 2006-07Bench: SHRI VIJAY PAL RAO (Judicial Member), SHRI B.M. BIYANI (Accountant Member)2 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 assessed income has reverted to 'Nil', there is no surviving addition to justify the penalty. Therefore, the penalty imposed under Section 271(1)(c) deserves to be deleted.

What were the facts?

The assessee initially filed a 'Nil' income return. The AO determined income at Rs. 48,80,053/- and imposed a penalty under Section 271(1)(c). However, the ITAT set aside the assessment order, and a subsequent assessment order accepted the returned income of 'Nil'.

What were the issues?

The primary issue was whether a penalty under Section 271(1)(c) could be sustained when the final assessed income was 'Nil' after the original assessment was set aside.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI

For Appellant: Shri Pankaj Shah, CA and Shri Soumya Bumb
Hearing: 14.09.2023Pronounced: 15.09.2023

Feeling aggrieved by appeal-order dated 09.03.2023 passed by learned Commissioner of Income-tax-NFAC, Delhi [“CIT(A)”], which in turn arises out of penalty-order dated 05.10.2016 passed by learned ITO, Neemuch [“AO”] u/s 271(1)(c) of Income-tax Act, 1961 [“the Act”] for assessment-year [“AY”] 2006-07, the assessee has filed this appeal.

2.

When the case was called, none appeared on behalf of revenue. However, there is an intimation from revenue’s side that the Ld. DR is on office tour. Ld. AR for assessee submitted that the case is straightforward

Shri Bhagwan Das Baheti, Neemuch v. ITO, Neemuch AY 2006-07 and can be decided taking into account his submissions even without representation from revenue. Accordingly, the hearing was proceeded.

3. Ld. AR submitted that the assessee filed return declaring “Nil” income in the proceeding of section 147. The AO, however, completed assessment vide order dated 24.12.2009 u/s 147 read with section 143(3) determining the total income at Rs. 48,80,053/- as against returned income of Rs. Nil. The assessee carried matter in first-appeal to CIT(A) but could not succeed. The assessee went in next appeal to ITAT, which the ITAT decided on 27.11.2018 wherein the assessment-order was set aside to AO. In pursuance thereof, the AO passed newer assessment-order dated 31.12.2019 accepting the returned income of Rs. Nil. During intervening period, the AO passed penalty-order u/s 271(1)(c) dated 05.10.2016 qua the originally assessed income of Rs. 48,80,053/-. Now, since the assessed income has again turned to Rs. Nil, there is no surviving addition. Therefore, the penalty imposed by AO u/s 271(1)(c) also has no legs to stand and the same deserves to be deleted fully.

3.

We find merit in the submissions of Ld. AR, accordingly the penalty imposed by AO is deleted. The assessee succeeds in this appeal.

4.

Resultantly, this appeal is allowed.

Order pronounced in the open court on 15.09.2023.

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