VIMAL ALLOYS PVT LTD,MANDI GOBINDGARH V. DC/ACIT, CIRCLE,GOBINDGARH, GOBINDGARH

ITA 684/CHANDI/2025

AI Insights

Vimal Alloys Pvt. Ltd. appealed against the penalty imposed by the Assessing Officer, which was confirmed by the CIT (Appeals). The penalty was initially set at Rs. 32,49,546 for alleged concealment of income, later reduced to Rs. 16,24,773 by the CIT (Appeals). The Tribunal noted that the reassessment order accepted the returned income without any additions, thus negating the basis for the penalty. The Tribunal's decision emphasized that penalties under section 271(1)(c) are contingent upon the existence of additional income assessed, which was not the case here.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784841 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 09-05-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Assessee Lawyers: VIPEN SETHI
• Keywords: Set aside; Assessment record
• Section: 143(3); 271(1)(c)

Judgement Text

"आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 684/CHD/2025 Ǔनधा[रण वष[ / Assessment Year: 2014-15 Vimal Alloys Pvt. Ltd., V-Saunti, Amloh Road, Mandi Gobindgarh. Vs The DC/ACIT, Circle, Mandi Gobindgarh. èथायी लेखा सं./PAN NO: AAACV7801M अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Assessee by : Shri Vipen Sethi, Advocate Revenue by : Dr. Ranjit Kaur, Addl. CIT Sr.DR Date of Hearing : 09.10.2025 Date of Pronouncement : 12.11.2025 PHYSICAL HEARING O R D E R PER RAJPAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 29.03.2025 passed for assessment year 2014-15. 2. The grievance of the assessee is that ld.CIT (Appeals) has erred in confirming the levy of penalty amounting to Printed from counselvise.com ITA No.684/CHD/2025 A.Y.2014-15 2 Rs.16,24,773/- imposed u/s 271(1)(c) of the Income Tax Act by the ld. Assessing Officer. 3. With the assistance of the ld. Representative, we have gone through the record carefully. It emerges out from the record that assessee has filed its return of income on 03.11.2014 declaring an income of Rs.62,43,060/- and assessment order was passed u/s 143(3) on 13.12.2016 whereby income of the assessee was determined at Rs.1,09,53,555/-. The AO, thereafter, visited the assessee with penalty u/s 271(1)(c) of the Act vide his order dated 13.03.2020.He imposed a penalty @ 200% at Rs.32,49,546/-. 4. Dissatisfied with this penalty, assessee filed an appeal before the ld.CIT (Appeals) who has reduced the penalty to Rs.16,24,773/- by way of the impugned order. 5. It emerges out from the assessment record that assessment order was challenged by the assessee and ultimately dispute travelled upto the Tribunal. The ITAT has set aside the assessment order in ITA No.275/CHD/2019 vide its order dated 24.05.2022. The AO has passed a fresh Printed from counselvise.com ITA No.684/CHD/2025 A.Y.2014-15 3 assessment order on 27.02.2024 u/s 143(3) read with Section 254 of the Act. In this assessment order, AO has accepted the returned income declared by the assessee, hence, no additions have been made. The income has been determined at Rs.62,43,060/- which is equivalent to the returned income. 6. On due consideration of the facts, we are of the view that ld. First Appellate Authority has failed to take cognizance of this assessment order while deciding the penalty appeal. The penalty ought to have been deleted because no addition has been made to the total income of the assessee. A perusal of Section 271(1) sub-clause (c) of the Act contemplates that if the AO/CIT (Appeals)/PCIT, in the course of any proceeding under the Act is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty; as per such clause (iii),which read as under: (iii) in the cases referred to in clause (c) or clause (d), in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the Printed from counselvise.com ITA No.684/CHD/2025 A.Y.2014-15 4 concealment of particulars of his income or fringe benefits or the furnishing of inaccurate particulars of such income or fringe benefits. 5.1 A perusal of the above clause would indicate that if an assessee is required to pay taxes on an addition made during the course of assessment, over and above the declared income, then such penalty would be calculated according to the above sub-clause (iii). In the present case, there is no addition made to the income of the assessee on which it can be alleged that assessee has evaded the taxes by reason of concealment of particulars of income or furnishing of inaccurate particulars. This charge is no more available against the assessee. Accordingly, no penalty could be computed upon the assessee. We allow the appeal of the assessee and delete the penalty. 6. In the result, appeal of the assessee is allowed. Order pronounced on 12 th November,2025. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” Printed from counselvise.com ITA No.684/CHD/2025 A.Y.2014-15 5 आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 5. गाडᭅ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "