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TMI Blog2023 (8) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... e vacated. In the case of CIT v Shah Alloys [ 2012 (9) TMI 957 - GUJARAT HIGH COURT] held that penalty cannot be imposed when addition made, which was basis for penalty, was set aside. In the case of LRs Management [ 2023 (5) TMI 351 - ITAT RAJKOT] it was held that Where quantum addition made by AO was deleted by Tribunal, there remained no basis for levy of penalty under Section 271(1)(c) of the Act. In view of the facts of the instant case and the settled legal proposition on the subject that once the quantum proceedings itself have been decided in favour of the assessee, there is no scope of levy of penalty u/s 271(1)(c) - Decided in favour of assessee. - Smt. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttention to letter dated 03.08.2023 filed by the assessee in which the assessee submitted that the present penalty proceedings were initiated pursuant to order under Section 147 of the Act dated 29.03.2016. However, since the aforesaid order under Section 147 of the Act has been quashed by Hon ble Tribunal vide its order dated 07.12.2022 in Appeal No. ITA 1030/Ahd/2019, the penalty proceedings, therefore, do not survive. Accordingly, it was submitted that the penalty appeal preferred by the Department may therefore be quashed. 5. It would be useful to reproduce the relevant extracts of the order passed by ITAT Ahmedabad in the case of ITO vs. M/s. PRSSB Services Ltd. vide order dated 07-12-2022 for ready reference:- 9.1 From the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quent Assessment Year is based on the inferences drawn from certain facts which cannot be construed as tangible material. The reasons mentioned in the notice for reassessment are based on mere change of opinion and therefore, the reopening of the assessment proceeding is not permissible in the facts and circumstances of the case. The aforesaid finding cannot be said to be perverse. For the aforementioned reasons, the substantial questions of law involved in this appeal are answered against the revenue and in favour of the assessee. 9.1 The principles laid down by the Hon ble Karnataka High court and subsequently confirmed by Hon ble Supreme Court in the case cited above are squarely applicable to the facts of the present case. Admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities admitted that quantum addition on account of transfer pricing difference which was basis for imposition of penalty had already been deleted, impugned penalty order based on said addition also deserved to be set aside. In the case of CIT v Babul Harivadan Parikh 37 Taxmann.com 52 (Gujarat) , the Gujarat High Court held that where revenue authorities passed a penalty order on basis of addition made to assessee's income under section 69A, in view of fact that said addition had been deleted by Tribunal in quantum appeal, penalty order so passed by authorities below was also liable to be quashed. In the case of CIT (Exemptions) v. Ahmedabad Urban Development Authority 103 taxmann.com 82 (SC) , the Hon ble Supreme Court held that whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 271(1)(c) of the Act. 8. In view of the facts of the instant case and the settled legal proposition on the subject that once the quantum proceedings itself have been decided in favour of the assessee, there is no scope of levy of penalty u/s 271(1)(c) of the Act, we are here by dismissing the appeal filed by the Department. 9. In the result, the appeal filed by the Revenue is dismissed. C.O. No. 27/Ahd/2020(A.Y. 2008-09):- 10. So far as assessee s Cross Objection is concerned, the same is merely in support of the order of the Ld. CIT(A), which we have set-aside as per the observations and findings recorded by us in the foregoing paragraphs. Hence, the Cross Objection of the assessee is dismissed as infructuous. 11. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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