INCOME TAX OFFICER, AHMEDABAD vs. RAJESHRI AVAS DEVELOPERS PRIVATE LIMITED, AHMEDABAD

The instant appeal filed at the behest of the Revenue is directed against the order dated 21.07.2023 passed by the National Faceless Appeal Centre (NFAC), Delhi, arising out of the penalty order dated 27.03.2019 passed by the ITO, Ward-3(1)(1), (ITO vs. Rajeshri Avas Developers Private Limited) A.Y.– 2013-14 - 2 - Ahmedabad under Section 271(1)(c) of the Income Tax Act, 1961, (hereinafter referred to as ‘the Act’) for Assessment Year 2013-14.

The matter relates to levy of penalty under Section 271(1)(c) of the Act on account of bogus purchase. The assessment under Section 143(3) of the Act was finalized on 26.03.2016 assessing total income at Rs.3,97,36,810/- on account of bogus purchases which was further confirmed by the First Appellate Authority. Parallelly, the penalty proceeding under Section 271(1)(c) of the Act initiated against the assessee was finalized upon levying penalty of Rs.1,26,26,237/-, which was further confirmed by the First Appellate Authority.

On the other hand, the quantum appeal preferred by the assessee before the Tribunal was allowed upon deletion of addition made in the assessment order dated 26.03.2016 by passing the order in dated 06.08.2021. In that view of the matter, in our considered opinion, since the addition has been deleted by the Ld. Tribunal, the penalty under Section 271(1)(c) of the Act imposed on the basis of such addition has lost (ITO vs. Rajeshri Avas Developers Private Limited) A.Y.– 2013-14 - 3 - its force and, therefore, rightly deleted by the Ld. CIT(A). We, therefore, decline to interfere with the said order. The Revenue’s appeal is, therefore, found to be devoid of any merit and thus dismissed.

In the result, the appeal of the Revenue is dismissed.