ACIT, CIRCLE, KARNAL vs. MEHTA CONSTRUCTION COMPANY, NEW DELHI

This appeal by the Revenue is preferred against the order dated 02.09.2019 by the CIT(A), Karnal pertaining to Assessment Year 2012- 13.

The solitary grievance of the Revenue is that the ld. CIT(A) erred in deleting the penalty of Rs. 2,10,33,606/- levied by the Assessing Officer u/s 271(1)(c) of the Income-tax Act, 1961 [the Act, for short].

None appeared on behalf of the assessee in spite of several notices. We decided to proceed exparte.

The roots for levy of penalty lie in the assessment order dated 04.03.2015 framed u/s 143(3) of the Act wherein the returned income of the assessee at Rs. 93,47,710/- was assessed at Rs. 3,23,77,640/- after making addition of Rs. 2,10,33,606/- and Rs. 19,96,324/-.

Addition on account of low profit travelled upto the Tribunal and the Tribunal vide order dated 23.10.2018 in has deleted the addition on account of low profit which means that penalty to the extent of addition of Rs. 2,10,33,606/- does not hold any water and has no legs to stand. To this extent penalty stands deleted. However, the Assessing Officer is directed to decide the levy of penalty on the balance amount of Rs. 19,96,324/- after affording reasonable opportunity of being heard to the assessee.

In the result, the appeal of the Revenue in is party allowed.