2015 (10) TMI 2641 - AT - Income Tax

Penalty under section 271(1)(c) - capital gain addition - Held that - The issue is covered in favour of the assessee by order of ITAT Chandigarh Bench in the case of Shri Balwinder Singh Dhillon 2015 (8) TMI 1384 - ITAT CHANDIGARH on identical facts penalty has been cancelled and the departmental appeal has been dismissed. Further, when Hon ble High Court has deleted the addition in the cases of assessees by following decision in the case of Shri C.S. Atwal V CIT 2015 (7) TMI 878 - PUNJAB & HARYANA HIGH COURT therefore, nothing survives in favour of the revenue to levy the penalty under section 271 (1) (c) of the Act. In the result, there are no merits in the departmental appeals, the same are accordingly, dismissed. - Decided in favour of assessee

Summary

Issues:
Appeals challenging cancellation of penalty under section 271(1)(c) of the IT Act against different assessees.

Analysis:
The appeals before the Appellate Tribunal ITAT Chandigarh involved the cancellation of penalties under section 271(1)(c) of the IT Act against various assessees for assessment years 2007-08 and 2008-09. The common issue in all the appeals was the levy of penalty on members of different Housing Societies who had entered into tripartite agreements for the development of land in exchange for monetary and in-kind considerations. The Assessing Officer enhanced the capital gains by considering the total amount as the sale consideration, leading to the imposition of penalties which were later cancelled by the ld. CIT(Appeals).

The assessees argued that the Hon'ble Punjab & Haryana High Court had deleted the additions on quantum in similar cases, citing the judgment in the case of Shri C.S.Atwal V CIT. They also referred to a decision by ITAT Chandigarh Bench in another case where penalties were dismissed on identical facts. The Tribunal noted that the issue was settled in favor of the assessees by previous judgments and that there was no basis for the revenue to levy penalties under section 271(1)(c) of the Act. Consequently, the departmental appeals were dismissed.

In conclusion, the Tribunal upheld the cancellation of penalties in all the appeals, emphasizing that the decisions of the High Court and previous Tribunal rulings supported the assessees' positions. The Tribunal found no merit in the revenue's arguments and dismissed all departmental appeals accordingly.