IN THE INCOME TAX APPELLATE TRIBUNAL DELHI `C' BENCH
BEFORE SHRI A.N. PAHUJA, AM & SHRI C.M.GARG, JM
ITA no.3612 /Del/2012
Assessment year: 2005-06
ADIT(E), Trust Circle -II, V/s . M/s Guru Ram Dass Public
New Delhi School,40,Tagore Garden, New
Delhi
[PAN : NA]
(Appellant) (Respondent)
Assessee by None
Revenue by Shri Satpal Singh,DR
Date of hearing 10-09-2012
Date of pronouncement 10-09-2012
ORDER
A.N.Pahuja:- This appeal filed on 10.07.2012 by the Revenue against an order
dated 30.04.2012 of the ld. CIT(A)-XXVIII, New Delhi, raises the following
grounds:-
"1 On the facts and circumstances of the case and in
law, the ld.CIT(A) has erred deleting the penalty of
`3,24,931/- imposed by the AO on the ground that
assessee has not represented before the AO during
penalty proceedings, despite reminders issued by the
AO..
2.On the facts and circumstances of the case and in law,,
the ld. CIT(A) has failed to appreciate that the addition
was made by the AO on the fact that the assessee has
not furnished the details of cash deposits in Bank a/c
during the course of assessment proceedings despite
reminders given by the AO and wherein genuineness of
claim of the assessee made at appellate stage is doubtful
and assessee has not represented before the AO during
penalty proceedings.
2 ITA no.3612/Del./2012
3. The appellant craves leave to add, to alter or amend
any ground of appeal raised above at the time of
hearing."
2. At the outset, none appeared before us on behalf of the assessee
nor submitted any request for adjournment. Considering the nature of issue and
findings of the ld. CIT(A), the Bench proceeded to dispose of the appeal after
hearing the ld. DR.
3. Facts, in brief, as per relevant orders are that assessment in this case was
completed u/s 144 of the Income-tax Act, 1961 (hereinafter referred to as the
Act) on an income of ``10,52,000/- vide order dated 28th December, 2007, the
assessee having not filed the return nor explained the source of cash deposits of
`10,52,000/- in their SB a/c with Canara Bank. Inter alia, penalty proceedings u/s
271(1)(c) of the Act were also initiated. Subsequently, in response to a
showcause notice before levy of penalty, the assessee did not submit any reply.
Accordingly,. penalty of ``3,24,931/- @100% of the tax sought to be evaded on
the aforesaid amount of ``10,52,000/- was imposed u/s 271(1)(c) of the Act for
furnishing inaccurate particulars of income..
4. On appeal, the ld. CIT(A) cancelled the penalty, quantum addition
having been deleted by the ld. CIT(A) vide order dated 27.3.2012.
5 The Revenue is now in appeal before us against the aforesaid
findings of the ld. CIT(A). The ld. DR did not dispute before us that the quantum
addition had been deleted in this case by the ld. CIT(A) and no further appeal
seems to have been preferred.
6. We have heard both the parties and gone through the facts of the
case. Indisputably, quantum addition has been deleted by the ld. CIT(A) in this
case vide his order dated 27.3.2012 and no further appeal seems to have been
3 ITA no.3612/Del./2012
preferred. Since the addition ,forming the basis of levy of penalty itself has been
set aside, penalty imposed u/s 271(1)(c) of the Act does not survive. Hon'ble
Supreme Court in the case of K.C.Builders Vs. ACIT,265 ITR
562(SC) held that ordinarily, penalty cannot stand if the assessment
itself is set aside. W here an order of assessment or reassessment
on the basis of which penalty has been levied on the assessee, has
itself been finally set aside or cancelled by the Tribunal or
otherwise, the penalty cannot stand by itself and the same is liable
to be cancelled. Hon'ble Delhi High Court in the case of CIT Vs.
R.Dalmia,(1992)107 Taxation 107, held that no penalty survives
after deletion of additions, forming the basis for the levy of penalty.
Similar view was taken in Addl. Commissioner of Income-tax v. Badri
Kashi Prasad (1993] 200 ITR 206 (All) and Prabhat Oil Traders v.
Income-tax Officer (No. 3) (1996) 218 ITR (A.T.) 39 (ITAT,
Ahmedabad),City Dry Fish Company v. Commissioner of Income-tax
(1999) 238 ITR 63 (A.P.) , CIT vs. Mohd. Bux Sokat Ali (2004) 265
ITR 326 (Raj)and ACIT vs. VIP Industries (2009) 122 TTJ 289
(Mum).
5.1 Since the very basis upon which the penalty has been imposed
on the amount of ``10,52,000/- added by the AO, does not exist in
view of the aforesaid order dated 27-3-2012 of the ld. CIT(A) in
quantum appeal , we are of the opinion that penalty levied in
relation to the said amount does not survive. Since the ld. DR did
not place before us any material ,controverting the aforesaid
findings of the ld. CIT(A), accordingly, ground nos. 1 & 2 in the appeal are
dismissed..
6. No additional ground having been raised before us in terms of residuary
ground no.3 in the appeal, accordingly, this ground is dismissed.
7. No other plea or argument was made before us.
4 ITA no.3612/Del./2012
8. In the result, appeal is dismissed.
Order pronounced in open Court
Sd/- Sd/-
(C.M.GARG) (A.N. PAHUJA)
(Judicial Member) (Accountant Member)
Copy of the Order forwarded to:-
1. Assessee
2. ADIT, Trust Circle -II, New Delhi
3. DIT(E) concerned.
4. CIT(A)-XXVIII, New Delhi
5. DR, ITAT,'C' Bench, New Delhi
6. Guard File.
By Order,
Deputy/Asstt.Registrar
ITAT, Delhi
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