The Cuttack Bench of Income Tax Appellate Tribunal(ITAT) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s decision to delete the Rs.3,08,11,278 penalty levied under section 271(1)(c) for the Assessment Year(AY) 2014-15, as the underlying quantum addition no longer existed.
The revenue filed an appeal against the CIT(A),order dated 25.6.2024, in which deleted the penalty of Rs.3,08,11,278 levied under section 271(1)(c) for the assessment year 2014-15.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
ARSS Developers Limited,the respondent-assessee,was not represented, though an adjournment application had been filed.As the case could be decided without the assessee’s presence, the adjournment request was rejected, and the appeal was heard.
The revenue raised two grounds: first, that the CIT(A)’s order was erroneous in both facts and law; and second, that the CIT(A) failed to consider the pending appeal filed by the department before the Orissa High Court in ITA No.06/2022 against the quantum addition for the assessment year 2014-15.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The CIT(A) deleted the penalty under section 271(1)(c) as the ITAT, in its order dated 23.12.2021 for the assessment year 2014-15, had already deleted the quantum addition. The pending appeal before the Jurisdictional High Court did not justify reviving the penalty proceedings. Since the quantum addition no longer existed, the CIT(A)’s order was upheld without interference.
Section 271(1)(c) of the Income Tax Act pertains to the imposition of penalties for “concealment of income” or “furnishing inaccurate particulars of income.” If an assessee is found to have concealed income or provided false information about their taxable income, the tax authorities can levy a penalty under this section, which typically ranges from 100% to 300% of the tax sought to be evaded.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The two member bench comprising George Mathan(Judicial Member) and Manish Agarwal (Accountant Member) dismissed the appeal filed by the revenue.
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