2024 (4) TMI 934 - AT - Income Tax

Penalty u/s 271(1)(c) - CIT(A) deleted addition made u/s 69C based on the Remand Report filed by the AO - as argued quantum proceedings were subjudiced and it was requested by the appellant to keep the penalty proceedings in abeyance till the disposal of quantum appeal - HELD THAT - The present appeal is against penalty order under section 271(1)(c) of the Act levied on the basis addition made u/s 69C of the Act for A.Y. 2010-11 and A.Y. 2012-13. Since the ld.CIT(A) has deleted the addition under section 69C of the Act the penalty does not have any limbs to stand. In these facts and circumstances of the case we direct the AO to delete the penalty levied under section 271(1)(c) of the Act. Accordingly grounds of appeal filed by the assessee are allowed.

Summary

Issues: Appeals against penalty orders u/s 271(1)(c) of the Income Tax Act, 1961 for A.Y. 2010-11 and 2011-12, where the quantum proceedings were subjudiced.

A.Y. 2010-11:
The appellant contested the penalty levied u/s 271(1)(c) despite ongoing quantum proceedings, requesting a stay until the quantum appeal's resolution. The Commissioner upheld the penalty, but the ITAT found in favor of the appellant due to the deletion of the addition u/s 69C by the CIT(A). Consequently, the penalty was deemed unjustified and directed to be deleted.

A.Y. 2012-13:
Similar to the A.Y. 2010-11 case, the penalty u/s 271(1)(c) was challenged by the appellant amidst ongoing quantum proceedings. Following the CIT(A) deleting the addition u/s 69C, the ITAT allowed the appeal, ruling the penalty unsustainable. The appellant's grounds of appeal were upheld in both cases, and the appeals were allowed.

Conclusion:
The ITAT Nagpur allowed the appeals of the assessee for both A.Y. 2010-11 and 2011-12, directing the deletion of penalties u/s 271(1)(c) due to the deletion of additions u/s 69C by the CIT(A) in both cases.