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TMI Blog2021 (7) TMI 1124X X X X Extracts X X X X X X X X Extracts X X X X ..... same time the penalty for the same addition is sustained, even if it is due to acquiescence or ignorance of the assessee. Thus, in the interest of substantial justice we deem fit that the penalty levied should have been quashed by the Ld. CIT (A) and the doors for remedy should not have been closed for some technical reasons. Once the levy of penalty itself has no legs to stand, then penalty also cannot subsist. - Decide in favour of assessee. - ITA Nos. 1868, 1869/Del/2018, ITA Nos. 1870, 1871/Del/2018 - - - Dated:- 8-7-2021 - Shri N.K. Billaiya, Accountant Member And Shri Amit Shukla, Judicial Member For the Assessee : Ms. Roli Chaubey, CA For the Department : Ms. Nidhi Srivastava, CIT (DR) ORDER PER AMIT SHUKLA, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years which are the subject matter of penalty have been deleted and all the additions have been quashed. However, assessee on some wrong notion requested to withdraw the appeal filed before Ld. CIT (A) against the penalty order. Ld. CIT (A) accepted the assessee s letter of withdrawal of appeal on the ground that assessee seeks no remedy and the appeal of the assessee was dismissed. 2. Thereafter assessee filed an application u/s 154 before the Ld. CIT (A) as noted in the impugned order stating as under :- The assessee has filed this rectification application and through it, the assessee wishes to point out that the withdrawal of the above referred appeal against the order of penalty U/s 271(l)(c) has been erroneously and unlawfully ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected under an order by your H nbleself. Consequently, the LAO continues to uphold the penalty order and the demand raised thereunder against the assessee. This prayer is now being made to re-instate the appeal of the assessee since, on technical grounds, it s withdrawal has been incorrectly accepted, and to pass a speaking order cancelling the penalty based on the invalidation of the assessment proceedings and assessment order as ruled by the Hon ble ITAT vide its order Dt. 4.8.2017. Consequent to the Hon ble ITAT granting relief in the quantum case it was opined that the penalty levied on the basis of quantum addition in that case would stand automatically deleted and in that view of the matter our Authorized Representative had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessee submitted that this Tribunal on similar facts, in assessee s own case has accepted the assessee s plea and the penalty levied has been cancelled by the Tribunal. She further submitted that it was purely a bonafide mistake that instead of praying before the Ld. CIT (A) that penalty levied by the AO u/s 271(1)(c) has become infructuous because all the additions have been quashed by the Tribunal in the quantum proceedings, it has erroneously withdrawn the appeal filed before the Ld. CIT(A) in the appeals filed against penalty order proceedings u/s 154. Accordingly, assessee should not penalised for its own mistake when penalty levied u/s 271(1)(c) cannot stand as no addition subsists. She thus requested that the penalty should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 154 filed before him, but the fact of the matter is that, once the entire edifice for levy of penalty has been knocked down, that is, the additions on which penalty was levied has been deleted / quashed by the Tribunal which is an admitted fact and also brought to the notice of Ld. CIT(A) at the first stage itself, then there was no reason that penalty should not have been deleted/quashed. There cannot be a scenario where the addition in the quantum proceedings have been quashed or have been deleted and at the same time the penalty for the same addition is sustained, even if it is due to acquiescence or ignorance of the assessee. Thus, in the interest of substantial justice we deem fit that the penalty levied should have been quashed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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