2020 (7) TMI 15 - AT - Income Tax

Penalty u/s 271(1)(c) - Quantum addition deleted - HELD THAT - Additions, on which the penalties were levied, have since been deleted by the ITAT. We notice that the Ld. CIT(A) has placed reliance on the decision rendered by Hon ble Gujarat High Court in the case of Babul Harivadan Parikh 2013 (10) TMI 105 - GUJARAT HIGH COURT and in the case of Smt. Bharto Devi 2011 (2) TMI 951 - PUNJAB AND HARYANA HIGH COURT in support of his decision. Though the Ld D.R contended that the Ld CIT(A) should not have deleted the penalty, yet he could not furnish any decisions contrary to the decisions relied upon by Ld CIT(A). Hence, we do not find any infirmity in the decision rendered by Ld. CIT(A) in deleting the penalty levied u/s 271(1)(c) - Decided in favour of assessee.

Summary

Issues:
Appeals against deletion of penalty u/s 271(1)(c) for assessment years 2005-06 to 2011-12.

Analysis:
1. Background: The appeals filed by the revenue challenged the deletion of penalties under section 271(1)(c) of the Income-tax Act, 1961 by the Ld. CIT(A) for the assessment years 2005-06 to 2011-12.

2. Assessee's Business and Assessments: The assessee was involved in the business of dealing in jewellery and bullion. Following a search under section 132 of the Act, assessments were completed by the Assessing Officer (A.O.) for the years in question, making additions in various categories.

3. Penalty Imposition: Subsequent to the assessment orders, the A.O. imposed penalties under section 271(1)(c) of the Act for the mentioned years based on the additions made.

4. Appellate Proceedings: The assessee appealed against the penalties before the Ld. CIT(A), highlighting that the ITAT had deleted all the quantum additions for the respective years.

5. CIT(A)'s Decision: The Ld. CIT(A) deleted the penalties for all the years, considering that the quantum additions, forming the basis of the penalties, had been deleted by the ITAT in separate orders.

6. Legal Basis for Deletion: The Ld. CIT(A) relied on judicial precedents, including the decisions of the Hon'ble Gujarat High Court and the Hon'ble Punjab & Haryana High Court, to support the deletion of penalties when quantum additions are overturned by the ITAT.

7. Revenue's Challenge: The revenue contested the Ld. CIT(A)'s decision, arguing that the issues were not final as appeals had been filed before the High Court of Karnataka against the ITAT's decisions.

8. Final Decision: The ITAT upheld the Ld. CIT(A)'s decision to delete the penalties, noting the absence of contrary legal precedents to challenge the deletion based on the ITAT's decisions. Consequently, all appeals of the revenue were dismissed.

This detailed analysis covers the issues involved in the legal judgment, the background of the case, the penalty imposition, the appellate proceedings, the legal basis for deletion of penalties, the revenue's challenge, and the final decision rendered by the ITAT.