INCOME TAX OFFICER WARD 4 (3), JALANDHAR vs. SMT. GURJEET KAUR W/O SH. KULWANT SINGH, JALANDHAR

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ITA 124/ASR/2022Status: DisposedITAT Amritsar15 November 2022AY 2009-104 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, stating that since the addition forming the basis of the penalty was deleted by a coordinate bench, the penalty is not maintainable. The appeal by the Revenue was dismissed.

What were the facts?

The Revenue appealed the deletion of penalty levied under Section 271(1)(c) by the CIT(A). The CIT(A) had deleted the penalty based on the ITAT's order in quantum proceedings, which deleted the original addition.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the addition forming its basis has been deleted in quantum proceedings. Whether the appeal should be kept in abeyance pending a potential High Court appeal on the quantum addition.

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(3)Show list

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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR

Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE

Hearing: 11.11.2022Pronounced: 15.11.2022

The present appeal has been filed by the Revenue against the order dated 12.04.2022 passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi in respect of Assessment Year 2017-18, challenging

ITO v. Gurjeet Kaur therein the deletion of penalty levied u/s 271(1)(c) of the Income Tax Act, 1961.

2.

At the outset, the ld. CIT-DR for the department submitted that the ld. CIT(A) has not appreciated the merits of the case while deleting the penalty imposed u/s 271(1)(c) of the Income Ta Act on the basis of ITAT Amritsar Bench order passed in the quantum proceedings thereby granting relief to the assessee. He contended that although the ITAT has granted relief to the assessee in the quantum appeal, however the department is considering the order of the tribunal to be challenged before the Hon’ble High Court as yet time is available to file the appeal before the Hon’ble High Court. Whether the Hon’ble High Court/partly restored the order of the Assessing Officer, no adjudication by the CIT(A) on merits against the penalty order would be available. He prayed that the appeal may be kept in abeyance till the decision of the Hon’ble High Court.

3.

Per contra, the ld. counsel for the assessee supported the order of the Commissioner of Income Tax (NFAC) in deleting the penalty imposed u/s 271(1)(c) of the Act. He contended that since the addition made in the quantum proceedings has been deleted by the Hon’ble ITAT Amritsar Bench, and therefore, the penalty u/s 271(1)(c) is also not maintainable and ITO v. Gurjeet Kaur required to be deleted. For this purpose, he placed reliance on the following judgments:

“(i) K.C Builders vs. ACIT, 265ITR 562 (ii) CIT vs. Bahri Brothers Pvt. Ltd. 167 ITR 0880(Pat) (iii) CIT vs. Bhagwan Ltd. 168 ITR 846 (Cat) (iv) CIT vs. Bengal Jute Mills Company Ltd. 174 ITR 402 (Cal) (v) CIT vs. Madanlal Sohanlal 176 ITR 189 (Cal) (vi) CIT vs. Bedi and Co. Pvt. Ltd. 183 ITR 59 (Kar) (vii) CIT vs. Roy Durlabhaji 211 ITR 470 (Raj)”

4.

We have heard both the sides and perusal of the record.

Admittedly, in this case the addition has been deleted in the quantum proceedings by the ITAT Amritsar Bench in & 628/Asr/2017 vide order dated 21.02.2022. The issue raised by the Revenue is that time for filing further appeal before the Hon’ble High Court was yet available and the Hon’ble High Court may restored/partly restore the order of the Assessing Officer and hence no adjudication by CIT(A) on merits against the penalty order would be available. In our view, the issue raised by the Revenue would not survive because the very addition farming the basis of penalty has been deleted by the coordinate bench. We, therefore, concur with the finding of the ld. CIT(A) who has rightly deleted the penalty u/s 271(1)(c) of the Act. This view of ours gets support from the judgment of ITO v. Gurjeet Kaur the ITAT Tribunal Bench in the case of ITO v. Deepa Restaurant & Bar Pvt.

Ltd. in ITA No. 5424/Mum/2012.

5.

In the above view, we find no merit the grounds raised by the department and hence CIT(A) order, deleting the penalty levied u/s 271(1)(c) is upheld.

6.

In the result, the appeal filed by the Revenue is dismissed.

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