2017 (12) TMI 1697 - AT - Income Tax

Penalty u/s 271(1)(c) - Quantum additions deleted - HELD THAT - CIT(A) has quashed the penalty orders is evident from the ground raised by the Department itself. A perusal of the impugned order shows that the reason for quashing the penalty orders has been the fact that the issue has been decided in favour of the assessee which has affirmed the order of the ITAT 2015 (12) TMI 1805 - ITAT CHANDIGARH . Accordingly, once the additions stand deleted, the Revenue s appeal in the peculiar facts and circumstances has no merit. - Decided against revenue

Summary

Issues:
- Correctness of the consolidated order quashing the penalty imposed by the AO for the assessment years 2006-07 and 2008-09.

Analysis:
The appeals were filed by the Revenue challenging the consolidated order of CIT (Appeals)-3 Ludhiana, which had quashed the penalty imposed by the AO for the assessment years 2006-07 and 2008-09. The parties agreed that the Revenue raised identical grounds in both appeals. The key issue was whether the CIT(A) was justified in deleting the penalty without considering the pending quantum appeal before the Punjab and Haryana High Court. The AR highlighted that the additions made in the assessment years were deleted entirely by the ITAT in the quantum proceedings, supporting the dismissal of the Departmental appeals.

The Senior DR relied on the penalty order, not disputing the facts. After hearing the submissions, the Tribunal found no flaw in the CIT(A)'s consolidated order. The CIT(A) had quashed the penalty orders based on the decision in favor of the assessee by the Punjab & Haryana High Court, affirming the ITAT's order. Since the additions were deleted, the Revenue's appeal lacked merit in the given circumstances. Consequently, the appeals by the Revenue were dismissed, and the order was pronounced in the Open Court during the hearing itself.

In conclusion, the Tribunal upheld the CIT(A)'s decision to quash the penalties imposed by the AO for the assessment years 2006-07 and 2008-09. The judgment emphasized the importance of the High Court's decision in favor of the assessee, leading to the dismissal of the Revenue's appeals due to the deleted additions.