PARAMOUNT INDUSTRIAL SECURITIES PRIVATE LIMITED,FARIDABAD V. .INCOME TAX OFFICER WARD 19(3), DELHI

ITA 3729/DEL/2023

AI Insights

The case involves Paramount Industrial Securities Private Limited, which appealed against the penalty sustained by the CIT(Appeals) on the grounds of undisclosed contractual receipts for the assessment year 2011-12. Initially, the AO made an addition of Rs.8,47,824 to the assessee's income, which was later reduced to Rs.1,27,374 by the CIT(Appeals) in quantum proceedings. Despite this reduction, the penalty was sustained on the original addition amount. The Tribunal found this inconsistent and set aside the penalty, directing the AO to reassess the penalty in light of the revised addition.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 43603 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 19-12-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: AJAY NAGAR; DIRECTOR
• Keywords: Set aside
• Section: 144; 271(1)(c)

Judgement Text

"I.T.A. No. 3729/Del/2023 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC” NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER आ.अ.सं/.I.T.A No.3729/Del/2023 िनधा\tरणवष\t/Assessment Year: 2011-12 Paramount Industrial Securities Private Limited, 352, Gali No.16, Bhikam Colony, Ballabgarh, Faridabad, Haryana. बनाम Vs. Income Tax Officer Ward-19(3), Delhi. PAN No. AAACP6978P अपीलाथ\u0014 Appellant \u0016\u0017यथ\u0014/Respondent िनधा\u0005\u0006रतीक\u000bओरसे /Assessee by Shri Ajay Nagar, Director राज\u0010वक\u000bओरसे /Revenue by Shri Sanjay Kumar, Sr. DR सुनवाईक\u000bतारीख/ Date of hearing: 04.12.2024 उ\u0016ोषणाक\u000bतारीख/Pronouncement on 13.12.2024 आदेश /O R D E R This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi dated 20.10.2023 for the AY 2011-12 in sustaining the penalty levied u/s 271(1)(c) of the Income Tax Act, 1961. 2. The Ld. Counsel for the assessee, at the outset, submits that the assessment in the case of the assessee was completed u/s 144 r.w.s. 147 of the Act on 09.12.2018 determining the income at I.T.A. No. 3729/Del/2023 2 Rs.8,47,824/- by making addition of Rs.8,47,824/- on account of undisclosed contractual receipts. The Assessing Officer (AO) passed penalty order dated 28.06.2019 levying penalty of Rs.2,61,977/- on the addition of Rs.8,47,824/- made in the quantum assessment. Ld. Counsel submits that when the assessee appealed against the addition made towards undisclosed contractual receipts, the Ld.CIT(Appeals) by order dated 25.06.2024 restricted the addition to Rs.1,27,374/- as against Rs.8,47,824/- made in the assessment order. The Ld. Counsel submits that the Ld.CIT(Appeals)-NFAC sustained the penalty levied by the AO on the entire addition of Rs.8,47,824/- observing that the assessee did not file appeal in quantum addition which is factually incorrect. The Ld. Counsel invited the attention of the Bench to the consequential order dated 30.11.2024 passed by the AO giving effect to the order of the Ld.CIT(Appeals) in quantum proceedings, wherein the income was revised to Rs.1,27,374/- as against Rs.8,47,824/-. Therefore, the Ld. Counsel submits that there is no justification in sustaining the penalty of Rs.2,61,977/- u/s 271(1)(c) of the Act on the addition of Rs.8,47,824/- made in the assessment order. 3. Heard rival submissions, perused the orders of the authorities below. On perusal of the record before me it is observed that the I.T.A. No. 3729/Del/2023 3 Ld.CIT(Appeals)-NFAC sustained the penalty levied u/s 271(1)(c) of the Act on the entire addition of Rs.8,47,824/- when in fact the addition was restricted to Rs.1,27,374/- by the Ld.CIT(A) in quantum proceedings. Consequential order was also passed to that effect bringing down the addition to Rs.1,27,374/-. However, it is observed that the penalty was levied u/s 271(1)(c) of the Act on the addition of Rs.8,47,824/- when the addition was made in the quantum proceedings. Since the addition has been reduced substantially by the Ld.CIT(A) in quantum proceedings and also the consequential order was also passed by the AO, penalty cannot be sustained on the addition made in quantum proceedings. Thus, the order passed by the AO dated 28.06.2019 levying penalty of Rs.2,61,977/- u/s 271(1)(c) of the Act on the quantum addition of Rs.8,47,824/- is set aside. The issue of levy of penalty u/s 271(1)(c) of the Act is restored to the file of the AO to pass a fresh order in accordance with law after taking cognizance order passed by the Ld.CIT(A) in quantum proceedings and the consequential order dated 30.11.2024 passed giving effect to the order of the Ld.CIT(Appeals), in accordance with law after providing adequate opportunity to the assessee. I.T.A. No. 3729/Del/2023 4 4. In the result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open court on 13/12/2024 Sd/- (C.N. PRASAD) JUDICIAL MEMBER Dated: 13/12/2024 *Kavita Arora, Sr. P.S. Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order Assistant Registrar, ITAT: Delhi Benches-Delhi "