If additions by authority is Deleted, Penalty cannot Survive!

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If additions by authority is Deleted, Penalty cannot Survive!

Take a case where additions are made by the assessing officers. Assessing Officer levies fines and penalties. Later, the additions are deleted. The penalties shall also stand deleted. Refer the below case law.

Farrukhabad Investment (India) Ltd vs. DCIT (ITAT Agra Third Member)

Both the departmental appeals are directed against separate order of ld. CIT(A), Gaziabad dated 31.08.2012 for the assessment year 2002-03 and 2004-05, challenging the cancellation of penalty u/s. 271(1)(c) of the IT Act .

2. The ld. CIT(A) noted in the appellate order that the assessee has furnished copy of order of ITAT, Agra Bench in the case of the same assessee for the same assessment years in ITA Nos. 164 & 165/Agr/2009 dated 22.06.2012 whereby both the appeals of the assessee have been partly allowed on quantum. It was pleaded before the ld. CIT(A) that since the additions, on which penalty has been imposed have been deleted by the Tribunal, therefore, penalty would not survive. The ld. CIT(A) accepted the contention of the assessee that since the addition itself on the basis of which penalty was levied have been deleted by the Tribunal, therefore, penalty cannot survive and both the appeals of the assessee were accordingly allowed.

3. The ld. Counsel for the assessee at the outset reiterated the submissions made before the ld. CIT(A) and filed copy of the order of Tribunal on quantum dated 22.06.2012 whereby all the additions on which penalty was levied, have been deleted by the Tribunal. Copy of the order is given to the ld. DR who did not dispute the same.

4. Since the quantum additions have already been deleted by the Tribunal in the cases of the same assessee for the above assessment years, on which penalty has been imposed, nothing survives in favour of the Revenue to levy penalty in the matter. Therefore, the appeals of the Revenue are not maintainable and are accordingly dismissed.

5. In the result, both the appeals of the Revenue are dismissed.

Order pronounced in the open court.


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