ITA No.- 5580/Del/2016
Mahendergarh Central Co-op Bank Ltd.
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH: `G': NEW DELHI)
BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER
AND
SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER
ITA No:- 5580/Del/2016
(Assessment Year: 2010-11)
Income Tax Officer, The Mahendergarh Central
Ward -1, Vs. Co-op Bank Ltd.
Narnaul. Railway Road,
Mahendergarh.
PAN No: AAAAT9320K
APPELLANT RESPONDENT
Revenue by : Shri N.K. Bansal, Sr. Dr
Assessee by : Shri Rajesh Goel, Adv. and
Shri Prashant Goel, CA
ORDER
PER ANADEE NATH MISSHRA, AM
This appeal by Revenue is filed against the order of Learned Commissioner of
Income Tax (Appeals)-Rohtak, ["Ld. CIT(A)", for short], dated 24.11.2014 and
19.08.2016 respectively for Assessment Year 2010-11, on the following grounds:
"1. The CIT(A) has erred in deleting the penalty amounting to Rs. 43,15,142/-
for furnishing inaccurate particulars of income as the appellant had written
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Mahendergarh Central Co-op Bank Ltd.
off Rs. 1,39,64,587/- as OTS interest relief without making any effort to
recover (also confirmed by the (CIT(A)).
2. The CIT(A) has erred in deleting the penalty, while CIT(A) herself has
sustained the quantum of addition on which this penalty was imposed."
(2) The Assessment order dated 28.03.2013, U/s 143(3) of the Income Tax Act, 1961
("I.T. Act", for short) was passed wherein an addition of 1,39,64,857/- was made by
Assessing Officer ("AO", for short). This addition was confirmed by Ld. CIT(A) vide order
dated 24.11.2014. Thereafter, penalty U/s 271(1)(c) was levied by the AO vide order
dated 30.09.2015, amounting to Rs. 43,15,142/- which was @ 100% of tax sought to be
evaded, in respect of the aforesaid addition of Rs. 1,39,64,857/-. Against the penalty
order dated 30.09.2015, assessee appealed before the Ld. CIT(A), who, vide her order
dated 19.08.2016 allowed the appeal of the assessee. The present appeal before Income
Tax Appellate Tribunal ("ITAT", for short) has been filed by Revenue against the
aforesaid order dated 19.08.2016 wherein the Ld. CIT(A) deleted the penalty. At the
time of hearing before us, the Learned Counsel for Assessee submitted that vide order
dated 04.07.2018, ITAT has set aside the issues regarding the aforesaid quantum
addition of Rs. 1,39,64,857/- to the file of the AO vide order dated 04.07.2018 in ITA No.
883/Del/2015 for Assessment Year 2010-11. He filed a copy of the aforesaid order dated
04.07.2018 passed in ITA No. 883/Del/2015. The relevant portion of the order of ITAT is
reproduced as under:
"5. We have heard the rival submissions and have perused the material available on
record. A perusal of the order of the Assessing Officer shows that the Assessing
Officer has disallowed the entire amount claimed as expenditure on the ground that
the impugned amount was huge as compared to the interest receipts credited by the
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Mahendergarh Central Co-op Bank Ltd.
assessee in its profit and loss account. The Assessing Officer has disallowed the
assessee's claim at the threshold itself without examining the details in this regard
and also without examining as to whether the provisions of the afire mentioned
Circular, as being relied upon by the assessee, were applicable in the assessee's case
or not. It is also apparent that the Assessing Officer has also not examined whether
the assessee had claimed the deduction of one time interest waiver as per the
provisions of the aforesaid circular or not. The Ld. CIT (Appeals), while dismissing the
assessee's appeal, has dismissed the assessee's appeal on the ground that no follow
up action had been taken up by the assessee bank to recover the outstanding
amount. Therefore, it is very much apparent that none of the lower authorities have
examined the deduction claimed by the assessee in light of the terms of the aforesaid
Circular issued by the Registrar of Cooperative Societies, Haryana. In view of these
facts, it is our considered opinion that in the interest of justice, the matter should be
re-examined by the Assessing Officer. Accordingly, we restore the issue to the file of
the Assessing Officer to be examined afresh after taking into account the provisions
of the Circular as well as after duly examining whether the assessee has claimed the
waiver of interest in terms of the aforesaid Circular or not. Needless to say, the
assessee will be afforded due opportunity by the Assessing Officer in this regard."
(2.1) The Ld. Counsel for assessee submitted that the penalty levied by the AO is
unsustainable in view of the aforesaid order of the ITAT. The Ld. Sr. Departmental
Representative ("DR", for short) appearing for Revenue relied on the order of the AO. We
have heard both sides patiently and we have also carefully perused the materials available
on record. We are of the view that penalty U/s 271(1)(c) of I.T. Act of Rs. 43,15,142 /-
levied by AO, has no legs to stand when the issues regarding corresponding additions
made by the AO have already been set aside by ITAT vide its aforesaid order dated
04.07.2018. When the quantum addition is already set aside by ITAT, the penalty levied
U/s 271(1)(c) of I.T. Act on the corresponding quantum addition also cannot survive. We
take support from judicial precedent in the case of K.C. Builders vs. ACIT 135 Taxman 461
(SC), in which the Hon'ble Apex Court held that where the additions made in the
Assessment Order, on the basis of which penalty for concealment was levied, are set aside
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or cancelled by ITAT or otherwise, the penalty cannot stand by itself and is liable to be
cancelled. In such a situation, there remains no basis at all for levying the penalty for
concealment, and therefore, in such a case, no such penalty can survive and the same is
liable to be cancelled. In view of the foregoing, appeal filed by Revenue is hereby
dismissed.
(3) In the result, appeal of Revenue is dismissed.
Order pronounced in the open court on 24th day of July, 2019.
Sd/- Sd/-
(H.S. SIDHU) (ANADEE NATH MISSHRA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 24.07.2019
Pooja/-
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
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Date of dictation
Date on which the typed draft is placed before the
dictating Member
Date on which the typed draft is placed before the
Other Member
Date on which the approved draft comes to the Sr.
PS/PS
Date on which the fair order is placed before the
Dictating Member for pronouncement
Date on which the fair order comes back to the Sr.
PS/PS
Date on which the final order is uploaded on the
website of ITAT
Date on which the file goes to the Bench Clerk
Date on which the file goes to the Head Clerk
The date on which the file goes to the Assistant
Registrar for signature on the order
Date of dispatch of the Order
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