Lionbridge Technologies LLP Vs ACIT (ITAT Mumbai)
In revenue’s appeal u/s 271(1)(c), AO had levied penalty of Rs.6.92 crore after completing reassessment u/s 143(3) r.w.s.147 determining income at Rs.20.64 crore. Assessee succeeded before Tribunal in quantum proceedings in ITA No.610/Mum/2018 (order dated 27.05.2020), whereby entire addition was deleted & demand stood quashed.
CIT(A), relying on this binding Tribunal decision, deleted penalty since no addition survived. Revenue argued that quantum order has been challenged before Hon’ble Bombay HC & the penalty appeal should be kept in abeyance, but no stay order or direction from HC was produced. Tribunal held that once quantum addition is deleted, penalty becomes infructuous as per settled law. Finding no infirmity in CIT(A)’s deletion, Tribunal dismissed revenue’s appeal.
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.
2. The brief facts of the case are that the assessment was completed under section 143(3) r.w.s. 147 of the Act on 29/03/2016, determining the total income at Rs.20,64,97,610/-. The assessee challenged the impugned assessment order before the Ld. CIT(A). The Ld. CIT(A) upheld the impugned addition. Thereafter, the assessee preferred an appeal before the ITAT, challenging both the legal grounds as well as the merits of the addition, and obtained relief. Consequently, the demand stood quashed. The Ld. AO thereafter issued a notice under section 274 r.w.s. 271(1)(c) of the Act and levied a penalty at 100% of the tax sought to be evaded, amounting to Rs.6,92,76,334/-. The penalty order was simultaneously challenged before the Ld. CIT(A). The Ld. CIT(A), relying upon the order of the ITAT, Mumbai Bench in ITA No. 610/Mum/2018 date of pronouncement 27/05/2020, deleted the penalty on the ground that the quantum addition itself had not survived. Aggrieved, the revenue has filed the present appeal before us.
