SHIVGORI BUILDERS (P) LTD,NEW DELHI vs. DCIT CENTRAL CIRCLE-14, NEW DELHI
In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that if the assessment order is annulled, the penalty levied based on that assessment order must also fall. Therefore, the penalty order was set aside.
What were the facts?
The assessee's appeal was against a penalty levied under Section 271AAA. The assessee argued that since the assessment order was annulled by the Tribunal, the penalty should also be deleted.
What were the issues?
Whether a penalty under Section 271AAA can survive if the underlying assessment order has been annulled.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘G’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI YOGESH KUMAR U.S
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the ld. CIT(A) – 26, Delhi dated 30.01.2020 pertaining to Assessment Year 2008-09.
The sum and substance of grievance of the assessee is that the ld. CIT(A) erred in upholding the penalty of Rs. 27.20 lakhs levied by the Assessing Officer u/s 271AAA of the Income-tax Act, 1961 [the Act, for short].
At the very outset, the ld. counsel for the assessee pointed out that the assessment order has been annulled by this Tribunal in a bunch of 111 appeals in which the appeal of the assessee is at Sl. No. 66 in ITA No. 1288/DEL/2018. It is the say of the ld. counsel for the assessee that since the assessment order has been annulled, penalty so levied does not have any legs to stand.
The ld. DR strongly contested this submission of the ld. counsel for the assessee and vehemently stated that even if the assessment order was annulled, penalty is leviable u/s 271AAA of the Act.
5. Though the ld. DR fairly conceded that this Tribunal has annulled the impugned assessment order.
We have carefully considered the rival contentions and have perused the orders of the authorities below. We have also gone through impugned order of the co-ordinate bench by which it decided 111 appeals alongwith the appeal of the assessee at Sl. No. 66 in ITA No. 1288/DEL/2018. The relevant findings read as under:
“38. From the above chart, it can be seen that investment of the share applicants/subscribers have been accepted in their respective assessment orders by same Assessing Officer who has sent proposal to the Additional CIT for making addition in the hands of the assessee. This clearly shows that the Additional CIT did not even care to ask the officer when he has accepted the investment in the hands of the subscribers, then why he is proposing addition in the hands of the assessees. Since, as mentioned elsewhere, approval was completely devoid of any application of mind, these facts got completely ignored by the approving authority.
Considering the facts from all possible angles, we have no hesitation to hold that the approval granted by the Addl. CIT is mechanical and without application of mind and the assessment order so framed pursuant to such approval u/s 143(3) r.w.s 153A of the Act is bad in law and deserves to be annulled.
Since the foundation has been removed by the coordinate bench of the Tribunal by annulling the relevant assessment order, therefore, the super structure including the penalty order u/s 271AAA of the Act has to fall. Accordingly, grounds of assessee are allowed and the assessing officer is directed to delete the impugned penalty”
Respectfully following the above, the grounds of assessee are allowed.
In the result, the appeal of the assessee in is allowed.
The order is pronounced in the open court on 18.08.2023.
More judgments on Section 271AAA
- Rosy Blue (India) Private Limited, Mumbai vs Dy. Commissioner of Income-Tax, Central…ITA 3351/MUM/2026[2012-13]Status: Disposed17 Sept 2026AY 2012-13
- B Nanji Enterprises Ltd., Ahmedabad vs The ACIT, Circle-1(1)(1), AhmedabadITA 2401/AHD/2025[2018-19]Status: Disposed5 Aug 2026AY 2018-19
- B Nanji Enterprises Ltd., Ahmedabad vs The ACIT, Circle-1(1)(1), AhmedabadITA 2400/AHD/2025[2017-18]Status: Disposed5 Aug 2026AY 2017-18
- B Nanji Enterprises Ltd., Ahmedabad vs The ACIT, Circle-1(1)(1), AhmedabadITA 2399/AHD/2025[2016-17]Status: Disposed5 Aug 2026AY 2016-17
- B Nanji Enterprises Ltd., Ahmedabad vs The ACIT, Circle-1(1)(1), AhmedabadITA 2398/AHD/2025[2016-17]Status: Disposed5 Aug 2026AY 2016-17
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