2023 (7) TMI 18 - AT - Income Tax

Penalty u/s 271(1)(c) - deduction claimed u/s 54F as denied to the assessee and consequently thereto the income of long term capital gain was determined - HELD THAT - Considering the findings of the Tribunal in assessee own case 2023 (6) TMI 517 - ITAT JAIPUR we are of the considered view that when the quantum appeal is allowed and the deduction has been granted by this Tribunal consequently the penalty cannot hold its leg and therefore, we vacate the consequential levy of penalty - Decided in favour of assessee.

Summary

Issues Involved:
1. Validity of order of imposition of penalty u/s 271(1)(c) of the Income Tax Act.
2. Sustaining the penalty of Rs. 4,17,900/- u/s 271(1)(c) of the Act.
3. Non-consideration of the application for adjournment by the ld. CIT(A).

Summary:

1. Validity of Order of Imposition of Penalty u/s 271(1)(c):
The assessee contested the imposition of penalty u/s 271(1)(c) of the Income Tax Act. The penalty was levied due to the denial of the deduction claimed u/s 54F, leading to the determination of long-term capital gain at Rs. 20,28,370/-. The ld. CIT(A) upheld the penalty, stating, "the AO has rightly levied the penalty of Rs. 4,17,900/- u/s 271(1)(c) in respect of the addition of Rs. 20,28,370/- made by the AO under the head 'Long Term Capital Gain' because the appellant had filed inaccurate particulars of income."

2. Sustaining the Penalty of Rs. 4,17,900/- u/s 271(1)(c):
The assessee argued that the penalty was unjust as the quantum appeal regarding the deduction u/s 54F was allowed by the ITAT. The tribunal noted, "Considering the findings of the Tribunal in ITA No. 397/JP/2018 in assessee own case, we are of the considered view that when the quantum appeal is allowed and the deduction has been granted by this Tribunal consequently the penalty cannot hold its leg and therefore, we vacate the consequential levy of penalty at Rs. 4,17,900/-."

3. Non-Consideration of the Application for Adjournment:
The assessee claimed that the ld. CIT(A) erred in not considering the application for adjournment. However, the tribunal's decision focused on the merits of the penalty and the outcome of the quantum appeal, which rendered this issue secondary.

Conclusion:
The tribunal allowed the appeal of the assessee, vacating the penalty of Rs. 4,17,900/- u/s 271(1)(c) since the quantum appeal was decided in favor of the assessee, granting the deduction u/s 54F. The order was pronounced in the open Court on 28/06/2023.