LAXMIBEN NARAYAN CHAUTE,SURAT V. ITO, WARD 1(2)(3), SURAT

ITA 357/SRT/2025

AI Insights

The case involves Laxmiben Narayan Chaute, the appellant, who contested a penalty imposed by the Income Tax Officer (ITO) for the assessment year 2014-15. The penalty was initially levied due to discrepancies between the declared income and the income assessed after scrutiny, which involved a significant addition to the assessee's declared income based on property transaction values. The appellant challenged the penalty after the Commissioner of Income-tax (Appeals) upheld it. However, the Tribunal's decision to allow the appeal was based on the fact that the primary addition to income, which justified the penalty, had been reversed in a related appeal, thus nullifying the grounds for the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786904 (ITAT-SURAT)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 24-03-2025
• Other Referred Cases: K.C.Builders vs. ACIT, 265 ITR 562 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAMITA PATEL
• Assessee Lawyers: MANISH J SHAH
• Keywords: Set aside
• Section: 143(3); 271(1)(c)

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE MS. SUCHITRA RAGHUNATH KAMBLE, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.357/SRT/2025 Assessment Year: 2014-15 (Hybrid hearing) Laxmiben Narayan Chaute Plot No.2, Ambica Society 2, Udhna Magdalla Road, Surat- 395 007 बनाम/ Vs. Income Tax Officer, Ward- 1(2)(3), Surat, Aaykar Bhavan, Majura Gate, Surat-395 001 èथायीलेखासं./जीआइआरसं./PAN/GIR No: ABFPC 0082 L (अपीलाथŎ/Appellant) (ŮȑथŎ /Respondent) िनधाŊįरती की ओर से /Appellant by Shri Manish J Shah, AR राजˢ की ओर से /Respondent by Ms. Namita Patel, Sr-DR सुनवाई की तारीख/Date of Hearing 27/08/2025 उद ्घोषणा की तारीख/Date of Pronouncement 17/11/2025 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), dated 10.02.2025 by the National Faceless Appeal Centre, Delhi/Commissioner of Income- tax(Appeals) [in short, ‘CIT(A)’] for the assessment year (AY) 2014-15, confirming penalty levied u/s 271(1)(c) of the Act by Assessing Officer (in short, ‘AO’) vide order dated 26.03.2019. 2. Grounds of appeal raised by the assessee are as under: “1. The ld. CIT(A) erred in law and on facts of the case, in confirming penalty of Rs.4,60,313/- levied u/s 271(1)(c). 2. The appellant craves leave to add, amend or alter the grounds of appeal at the time of hearing, if need arise.” Printed from counselvise.com 2 ITA No.357/Srt/2025 A.Y 14-15 Laxmiben N Chaute 3. Facts of the case in brief are that assessee filed return of income for AY 2014-15 on 09.07.2014 declaring total income of Rs.2,28,290/-. The case was taken up for scrutiny and after hearing the assessee, addition of Rs.18,36,876/- was made, being the difference between the value of jantri and the value as per the sale deed, vide order u/s 143(3) dated 30.01.2016. Penalty proceedings u/s 271(1)(c) were also separately initiated for furnishing inaccurate particulars of income. Subsequently, the AO issued show cause notice and after hearing the assessee, levied minimum penalty of Rs.4,60,3143/-, being 100% of the tax sought to be evaded. Aggrieved by the penalty order of the AO, assessee filed appeal before CIT(A) who dismissed the appeal. 4. Aggrieved by the order of CIT(A), assessee has filed present appeal before the Tribunal. The Ld. AR submitted that the co-ordinate Bench of this Tribunal has allowed the appeals of the assessee and others in ITA Nos.383- 385, 284, 285 and 681/SRT/2017/2018 dated 31.01.2022 against the order of CIT(A), who had confirmed the additions made by the AO. The appeal of the assessee is in ITA No.285/SRT/2018 (AY 2014-15). The Ld. AR has filed copy of the said order of the Tribunal. He submitted that once the main demand stands deleted, there can be no sustainable penalty. Accordingly, he requested to set aside the order of CIT(A). 5. On the other hand, Ld. Sr-DR for the revenue relied on the orders of the lower authorities. Printed from counselvise.com 3 ITA No.357/Srt/2025 A.Y 14-15 Laxmiben N Chaute 6. We have heard both the parties and perused the materials on record carefully. We have also gone through the order of the co-ordinate Bench of this Tribunal in case of the assessee cited supra. We find that co-ordinate Bench has allowed the appeal of assessee against the quantum addition. Where the addition made in the assessment order, on the basis of which the penalty was levied, is deleted, they remains no basis at all for levying the penalty and, therefore, in such a case no such penalty can survive and the same is liable to be cancelled. Reliance is placed on the decision of Hon’ble Supreme Court in case of K.C.Builders vs. ACIT, 265 ITR 562 (SC). Hence, the order of CIT(A) is set aside and appeal of the assessee is allowed. 7. In the result, appeal of the assessee is allowed. Order pronounced in accordance with Rule 34 of ITAT Rules, 1963 on 17/11/2025 in the open court. Sd/- Sd/- (SUCHITRA R KAMBLE) (BIJAYANANDA PRUSETH) Æयाियक सदÖय/JUDICIAL MEMBER लेखा सदÖय/ ACCOUNTANT MEMBER सूरत /Surat Ǒदनांक/ Date: 17/11/2025 Dkp Outsourcing Sr.P.S* आदेश कì ÿितिलिप अúेिषत/ Copy of the order forwarded to :  अपीलाथê/ The Appellant  ÿÂयथê/ The Respondent  आयकर आयुĉ/ CIT  आयकर आयुĉ (अपील)/ The CIT(A)  िवभागीय ÿितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडª फाईल/ Guard File // True Copy // By order/आदेश से, सहायक पंजीकार आयकर अपीलȣय अͬधकरण, सूरत Printed from counselvise.com "