ACIT Vs Lionbridge Technologies LLP (ITAT Mumbai)
Penalty u/s 271(1)(c) Deleted After Quantum Addition Was Quashed—Revenue Appeal Dismissed; No Basis to Keep Penalty Alive
Assessment was reopened u/s 147 & completed u/s 143(3) r.w.s 147 on 29.03.2016 determining income at ₹20.64 Cr. Assessee succeeded before ITAT (in ITA No.610/Mum/2018 dated 27.05.2020), & quantum addition was deleted in full. Consequentially, AO levied 100% penalty u/s 271(1)(c) of ₹6,92,76,334/- on 31.03.2019.
CIT(A) deleted the penalty relying on the ITAT’s quantum order, holding that once quantum does not survive, penalty cannot survive.
Revenue appealed arguing the quantum deletion has been challenged before Bombay HC & that penalty should be kept in abeyance. However, Revenue could not produce any stay order, direction, or instruction from HC requiring the Tribunal to withhold disposal of penalty appeal.
Tribunal held that:
- Quantum addition already stands deleted by binding ITAT order.
- Penalty based on a non-existent addition is infructuous.
- Mere filing of an appeal before HC does not revive a deleted quantum unless stayed.
- CIT(A)’s deletion of penalty was correct.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The instant appeal of the assessee was filed against the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter, ‘Ld.CIT(A)’] passed under section 250 of the Income Act, 1961 [hereinafter, ‘Act’] date of order 23/07/2025 for Assessment Year 2008-09. The impugned order arises from the order of the Learned Deputy Commissioner of Income-tax- 15(2)(1), Mumbai (in short, ‘Ld.AO’) passed under section 271(1)(c) of the Act, date of order 31/03/2019.
