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2019 (4) TMI 1515 - AT - Income TaxPenalty u/s. 271(1) (C) - Additions made by disallowing the exemption claimed u/s. 10(38) - HELD THAT - Quantum addition has been deleted by the Tribunal. Since quantum addition(s) have been deleted, the imposition of penalty has no legs to stand. Accordingly, we confirm the impugned order of the ld. CIT(A) deleting the imposition of penalty - Decided against revenue
Issues: Appeal against the order of imposition of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 for the A.Y. 2010-11.
Analysis: The appeal was filed by the revenue against the order of the ld.CIT(A)-1, Jaipur for the assessment year 2010-11 regarding the imposition of penalty under section 271(1)(c) of the Income Tax Act, 1961. The appellant contended that since the additions made were deleted in the assessee's own case by the Tribunal and confirmed by the Hon'ble Rajasthan High Court, the penalty imposed had no basis. The Tribunal noted that the penalty was imposed concerning the disallowance of exemption claimed under section 10(38) of the Act. The Tribunal observed that the quantum additions were deleted by the Tribunal and confirmed by the High Court, rendering the penalty unjustified. Consequently, the Tribunal upheld the order of the ld.CIT(A) in deleting the penalty of ?90,00,000 levied under section 271(1)(c) of the Act. The Tribunal dismissed the grounds raised by the revenue and ultimately dismissed the appeal of the revenue. This judgment highlights the importance of the appellate process in tax matters, where the deletion of quantum additions can impact the imposition of penalties. The Tribunal's decision was based on the principle that if the additions leading to the penalty are deleted, the penalty itself becomes unsustainable. The confirmation of the Tribunal's decision by the High Court further solidified the position that the penalty lacked merit in the absence of the underlying additions. The case underscores the significance of thorough review and analysis of the facts and legal provisions to ensure a fair and just outcome in tax penalty matters.
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