DCIT, Exemption Circle, Ghaziabad V. Krishna Charitable Society, Ghaziabad

ITA 6399/DEL/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1249 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 02-10-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 04-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNALDELHI (DELHI BENCH ‘C’ : NEW DELHI) BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH.ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.6399/Del/2018 (Assessment Year : 2010-11) DCIT, Exemption Circle Ghaziabad PAN : AAATK2465P Vs. M/s. Krishna Charitable Society, 13 Km Stone, Meerut Road, Ghaziabad (APPELLANT) (RESPONDENT) Assessee by Sh. Akhilesh Kumar and Sh. Anil Gupta, CA Revenue by Sh. Hemant Gupta, Sr. DR Date of hearing: 03.10.2022 Date of Pronouncement: 11.10.2022 ORDER PER ANUBHAV SHARMA, JM : The Revenue has filed this appeal against the order dated 28.03.2016 passed by the Dy. Commissioner of Income Tax, Exemption, Circle, Ghaziabad confirming the penalty levied by the Assessing officer u/s 271(1)(c) of the Income Tax Act, 1961. 2. The facts in brief are the case of assessee was selected for scrutiny and order u/s 143(3) was passed after making different additions and Ld. AO initiated penalty proceedings. Subsequently, the additions were sustained by Ld. CIT(A). The A.O. levied the penalty of Rs. 1,25,34,700/- u/s. 271(1)(c). However, the Ld. CIT(A) deleted the penalty. 2 ITA No. 6399/Del/2018 Krishna Charitable Society 3. Now Revenue has raised following grounds of appeal :- “1. The Ld. CIT(A) has erred in law and facts in deleting the penalty of Rs. 1,25,34,700/- levied by the AO u/s 271(1)(C) of the IT Act. 2. The order of Ld. CIT(A) be cancelled and the order of the AO be restored.” 4. Heard. It was pointed out by the Ld. Counsel for the assessee that the quantum appeal arising out of assessment order has been decided vide ITA No. 3302/Del/2015, A.Y. 2010-11 and the addition has been deleted. The fact could not be controverted by the Revenue and same is foundation of impugned order of Ld. CIT(A). 5. The Bench is of firm view that the foundation of issuing show cause notice for penalty u/s 271(1)(c) of the Act, being crumbled by a verdict of this Tribunal, by deletion of additions, the penalty order alone cannot stand by its own against the assessee. Reliance in this regard can be placed on the judgement of Hon'ble Delhi High Court in the case of Principal CIT vs. Fortune Technocomps P.Ltd. vide ITA 313/2016 dated 13th May, 2016 where it has held that once the assessment order of the AO in the quantum proceedings was altered by the Ld.CIT(A), in a significant way, the very basis of initiation of penalty proceedings was nonexistent. The Hon’ble Allahabad High Court in the cases of Shadiram Balmukand [1972] 84 ITR 183 and Dwarka Prasad Subhas Chandra [1974] 94 ITR 154 and the Hon’ble Gujarat High Court in the case of Lakkdhir Lalji [1972] 85. ITR 77 have also held that when the original basis of initiation of the penalty proceeding is altered or modified by the appellate authority, the authority initiating the penalty proceedings has no jurisdiction thereafter to proceed on the basis of the findings of the appellate authority. The Hon’ble Supreme Court in the case of K.C. Builders vs. ACIT 135 Taxman 461 (SC), has made it crystal clear that where the additions made in the Assessment Order, on the basis of which penalty for 3 ITA No. 6399/Del/2018 Krishna Charitable Society concealment was levied, are deleted, by ITAT or otherwise, the penalty cannot stand by itself and is liable to be cancelled. 6. Consequently, there is no substance in the grounds and the appeal of Revenue is dismissed. Order pronounced in open court on this 11 th day of October, 2022. Sd/- Sd/- (ANIL CHATURVEDI) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 11 th .10.2022 *Binita, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI