SHRIMATI RANI,LUDHIANA vs. INCOME TAX OFFICER,WARD-2, PHAGWARA

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ITA 601/ASR/2018Status: DisposedITAT Amritsar11 August 2022AY 2010-114 pages
AI SummaryAllowed

What did the Tribunal hold?

Since the addition of Rs. 6,11,000/- was deleted by the ITAT, the basis for levying the penalty under Section 271(1)(c) no longer exists. Therefore, the penalty is not sustainable.

What were the facts?

The Assessing Officer confirmed an addition of Rs. 6,11,000/- as unexplained cash deposit and levied a penalty of Rs. 1,30,345/-. The assessee appealed to the CIT(A) who upheld the penalty. Subsequently, the ITAT deleted the addition of Rs. 6,11,000/- in a separate appeal.

What were the issues?

The primary issue is whether a penalty under Section 271(1)(c) can be sustained when the underlying addition that formed the basis for the penalty has been deleted.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR

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

Hearing: 28.06.2022Pronounced: 11.08.2022

ORDER

Per Anikesh Banerjee, JM:

1.

The instant appeal is directed against the order of Ld. Commissioner of Income Tax (Appeals)-2, Jalandhar {in brevity CIT(A)} bearing appeal no. 2/10737/17-18/CIT(A)/JAL date of order 12.10.2018, order passed u/s. 250(6) of the Income Tax Act, 1961 (in brevity of the Act) for the Assessment year 2010-11. The impugned order was generated from the order of Income Tax Officer, Ward- 2, Phagwara (in brevity A.O) order passed u/s.271(1)(c) of the Act, date of order 08.02.2018.

Smt. Rani, ASSTT. YEAR 2010-11

2.

Tersely we advert the fact of the case. For the year of appeal, addition was confirmed amount to Rs.6,11,000/- in the order by ld. AO passed u/s. 143(3) of the Act. On the basis of order the ld. AO passed penalty order u/s. 271(1)(c) , considering the addition of Rs.6,11,000/- as unexplained cash deposit in the bank account. The penalty was levied @100% on Tax amount to Rs.1,30,345/-.

Aggrieved assessee filed an appeal before the ld. CIT(A) and the ld. CIT(A) passed order in favour of the ld. AO. Being aggrieved assessee filed an appeal before us.

3.

The counsel of the assessee filed a submission and informed that the demand against the order u/s. 143(3) of the Act was vacated by the order of the ITAT,Amritsar Bench bearing pronouncement vide order dated 04.05.2022. As per the order, the addition of Rs.6,11,000/- was deleted by the order of the Bench.

3.1 Thus, the addition stands reduced to NIL against the assessee. The ld. DR has not disputed the facts.So, the demand raised in penalty amounting to Rs.1,30,345/- has not leg to stand. Since there is no demand of tax so, hence there would be no penalty is applicable u/s. 271(1)(c) of the Act in case of assessee.

4.

Accordingly, we hereby delete the penalty amount of Rs.1,30,345/-.

Smt. Rani, ASSTT. YEAR 2010-11

5.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on11 .08.2022

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