ACIT Vs M/s. Aerens Buildwell Ltd. (ITAT Delhi)
As noticed, the Tribunal in the quantum proceedings has reversed the action of the Revenue. It is trite that penalty under Section 271(1)(c) is not automatically attracted merely because it is lawful to do so. The penalty is not ordinarily to be imposed unless assessee obliged in law, either acted deliberately in defiance of law or guilty of dishonest conduct or acted in conscious disregard of its obligation. The decision of the Tribunal in favour of the assessee implies absence of such possibilities. Thus, in view of the fact that quantum additions/disallowances itself have been admittedly deleted, the very basis for imposition of penalty ceases to exist and does not survive any more. Hence, the conclusion drawn by the CIT(A) deleting the penalty cannot disturbed.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
The captioned appeals have been filed by the Revenue against the orders of the Commissioner of Income Tax (Appeals)-XXVII, New Delhi [‘CIT(A)’ in short], of even date 24.12.2018 arising from the respective orders of the Assessing Officer (AO) whereby penalty under Sections 271(1)(c) of the Income Tax Act, 1961 (the Act) amounting to Rs.74,37,668/- (A.Y. 2008-09) and Rs.34,98,136/- (A.Y. 2009-10) were deleted by the CIT(A).
2. From the grounds of appeal raised by the Revenue itself, it is admitted position that the additions/disallowances made in the quantum assessments giving rise to the penalty in question in the respective appeals stood reversed by the Co-ordinate Bench of Tribunal in ITAs No.5037/Del/2016 and 5075/Del/2016 for Assessment Years 2008-09 and 2009-10, respectively. Thus, in view of the fact that quantum additions/disallowances itself have been admittedly deleted, the very basis for imposition of penalty ceases to exist and does not survive any more. Hence, the conclusion drawn by the CIT(A) deleting the penalty cannot disturbed.
3. The appeal moved by the Revenue on the ground that quantum appeal in favour of the assessee is subjected to challenge before the Jurisdictional High Court and thus not yet attained finality is devoid of any merit. As noticed, the Tribunal in the quantum proceedings has reversed the action of the Revenue. It is trite that penalty under Section 271(1)(c) is not automatically attracted merely because it is lawful to do so. The penalty is not ordinarily to be imposed unless assessee obliged in law, either acted deliberately in defiance of law or guilty of dishonest conduct or acted in conscious disregard of its obligation. The decision of the Tribunal in favour of the assessee implies absence of such possibilities. We thus decline to interfere with the order of the CIT(A).
3. In the result, both the appeals of the Revenue are dismissed.
