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

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ITA 8920/DEL/2019Status: DisposedITAT Delhi10 July 2023AY 2012-134 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that since the larger addition on account of low profit was deleted by the Tribunal itself, the penalty related to that addition was not sustainable. However, the Assessing Officer was directed to re-examine the penalty on the remaining addition.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of penalty levied under Section 271(1)(c). The original assessment order had made additions to the assessee's income, leading to the penalty.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the underlying addition has been deleted by a higher appellate authority. The sustainability of penalty on the remaining addition.

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, DELHI ‘E’ BENCH,

Before: SHRI N.K. BILLAIYA, & MS. ASTHA CHANDRA

For Respondent: Shri M. K. Pandey, Sr. DR
Hearing: 06.07.2023Pronounced: 10.07.2023

PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-

1.

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.

2.

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].

3.

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

4.

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/-.

5.

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.

6.

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

The order is pronounced in the open court on 10.07.2023.

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