9911796707
TMI Blog2012 (10) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... A.N.Pahuja:- This appeal filed on 09.01.2012 by the Revenue against an order dated 28.10.2011 of the ld. CIT(A)-XV, New Delhi, raises the following grounds:- 1 Whether Ld. CIT(A) was correct on facts and circumstances of the case and in law in cancelling the penalty of Rs.8,52,85,341/- u/s 271(1)(c) of the Income-tax Act, 1961 imposed by AO. 2. The appellant craves leave to add, alter or amend any ground of the appeal raised above at the time of hearing. 2 Facts, in brief, as per relevant orders are that assessment in this case was completed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act) vide order dated 29.12.2006,determining loss of Rs.310,44,80,700/- in pursuance to return declaring loss of Rs.384, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot accept the submissions of the assessee and imposed a penalty of Rs.8,52,85,341/- @100% tax sought to be evaded on the aforesaid amount of Rs.23,77,29,174/-for furnishing inaccurate particulars of income. Inter alia, the AO relied upon the decision of Hon ble Supreme Court in the case of Union of India Vs. Dharmendra Textiles Processors,306 ITR 277(SC) and CIT vs. Gurbachan Lal,250 ITR 157(Del.). 4. On appeal, the ld. CIT(A) cancelled the penalty, holding as under:- 6. I have considered the submissions of the appellant and findings of the AO and facts on records and 1 am of the view that proceedings initiated under Section 143(3) of the Act consequent to the CIT's order under Section 263 dated 25th March 2009 are null and void as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chief Commissioner and the Assessing officer who initiated the prosecution under Section 276C(l) had no right to overrule the order of the Income Tax Appellate Tribunal. More so when the Income Tax Officer giving the effect to the order cancelled the penalty levied under Section 271 (l)(c). e) Whether the High Court's order is liable to be set aside in view of the errors apparent on record. While deciding on the above questions Hon ble Court has observed as under: Where the additions made in the assessment order, on the basis of which penalty for concealment was levied, are deleted, there remains no basis at all for levying the penalty for concealment and, therefore, in such a case no such penalty can survive and the same is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 271(l)(c) of the Act has been struck down by the Tribunal, the Assessing Officer has no other alternative except to correct his order under Section 154 of the Act as per the directions of the Tribunal. As already noticed, the subject-matter of the complaint before this Court is concealment of income arrived at on the basis of the finding of the Assessing Officer. If the Tribunal has set aside the order of concealment and penalties, there is no concealment in the eyes of law and, therefore the prosecution cannot be proceeded with by the complaint and further proceedings will be illegal and without jurisdiction. The Assistant Commissioner of Income Tax cannot proceed with the prosecution even after the order of concealment has been set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty itself have been set aside, penalty imposed u/s 271(1)(c) of the Act does not survive. Hon ble Supreme Court in the case of K.C.Builders Vs. ACIT, 265 ITR 562(SC) held that ordinarily, penalty cannot stand if the assessment itself is set aside. Where an order of assessment or reassessment on the basis of which penalty has been levied on the assessee, has itself been finally set aside or cancelled by the Tribunal or otherwise, the penalty cannot stand by itself and the same is liable to be cancel led. Hon ble Delhi High Court in the case of CIT Vs. R.Dalmia,(1992)107 Taxation 107, held that no penalty survives after deletion of additions, forming the basis for the levy of penalty. Similar view was taken in Addl. Commissioner of Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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