ACIT, CIRCLE- 27(1), NEW DELHI V. U K PAINTS INDIA PVT. LTD., NEW DELHI

ITA 835/DEL/2020

AI Insights

The case involves appeals by the Revenue against M/s UK Paints India Pvt. Ltd. concerning penalties levied under section 271(1)(c) of the Income Tax Act, 1961, for the assessment years 2007-08 and 2011-12. The penalties were initially imposed by the Assistant Commissioner of Income Tax, Circle-27(1), New Delhi, but were later deleted by the CIT(A). The Revenue challenged this deletion, arguing that the CIT(A) erred in his decision. However, the Tribunal found that the underlying quantum additions, which were the basis for the penalties, had been previously removed, rendering the penalties themselves invalid. The Tribunal's decision was based on the principle that if the main addition is deleted, the consequential penalties must also be removed.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130706 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 30-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 17-02-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c)

Judgement Text

Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’: NEW DELHI BEFORE, SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.835/Del/2020 (ASSESSMENT YEAR 2011-12) ITA No.904/Del/2020 (ASSESSMENT YEAR 2007-08) Asst. CIT Circle-27(1) New Delhi Vs. M/s UK Paints India Pvt. Ltd. D-19, Kalka Ji New Delhi-110019 PAN-AAACU 0057C (Appellant) (Respondent) Assessee by Mr. R.K. Kapoor, CA Department by Ms. Meenakshi J. Goswami, CIT- DR Date of Hearing 31/07/2023 Date of Pronouncement 17/08/2023 ORDER PER M. BALAGANESH AM: Both the appeals filed by Revenue arises out of the common order of the Learned Commissioner of Income Tax (Appeals)-28, New Delhi, [hereinafter referred to as ‘Ld. CIT(A)’] in Appeal Nos.31/18-19/1059, 30/18-19/1058, 32/18-19/1060 dated 15/10/2019 against the penalty order passed by Assistant ITA Nos.835 & 904/Del/2020 ACIT vs. U.K. Paints India Pvt. Ltd. Page 2 of 4 Commissioner of Income Tax, Circle-27(1), New Delhi (hereinafter referred to as the ‘Ld. AO’) u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 29/03/2018. 2. The common grounds raised by the Revenue in both appeals except variance of figures. “1. “Whether on facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the penalty of Rs.81,03,423/- levied u/s 271(1)(c) of the Income Tax Act, 1961.” 2. “Whether on the facts and circumstances of the case, the CIT(A) has erred in holding that the penalty u/s 271(1)(c) is not leviable, if correct limb has not been marked in the notice, even though it is not a statutory notice.” 3. “Whether on the facts and circumstances of the case, the CIT(A) has erred in holding that AO cannot levy penalty on the quantum recalculated by the Ld. CIT(A), even though the issue is same and the Ld.CIT(A) has upheld the merit of addition. 3. “The appellant craves, leave or reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.” 3. The identical issues are involved in both the appeals, hence, they are taken up together and disposed off by this common order for the sake of convenience. 4. The only identical issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in deleting the penalty levied ITA Nos.835 & 904/Del/2020 ACIT vs. U.K. Paints India Pvt. Ltd. Page 3 of 4 u/s 271(1)(c) of the act in the facts and circumstances of the instant case. 5. At the outset, both the parties agreed that the quantum addition for which penalty has been levied, has been deleted by the order of this Tribunal for Asst. Years 2007-08 to 2013-14 vide its order dated 20.04.2020. We have gone through the quantum appellate order and we find that the Tribunal had elaborately dealt with all the grounds and had ultimately concluded that all the appeals of the assessee are allowed, all the cross objections of the assessee are allowed for statistical purposes and all the appeals of the Revenue are dismissed. Since, the quantum additions were deleted, the concealment of penalty u/s 271(1)(c) of the Act would have no legs to stand. Hence, the penalty for both the years are hereby direct to be deleted. 5. In the result, both the appeals of the Revenue are dismissed. Order pronounced in the open court on 17 th August, 2023. Sd/- Sd/-/- (ANUBHAV SHARMA) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 17/08/2023 Pk/sps ITA Nos.835 & 904/Del/2020 ACIT vs. U.K. Paints India Pvt. Ltd. Page 4 of 4 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI