The Income Tax Appellate Tribunal (ITAT), Delhi Bench deleted penalty as there was no objection on the disallowance under Section 14A of the Income Tax Act, 1961.
The assessee company, M/s. IRCON International Ltd is a Government of India undertaking and is engaged in the execution of Civil Engineering, Electrical and Communication and Turnkey contract, In India as well as Abroad. The assessee filed its return of income for the Assessment Year 2011-12 electronically declaring total income at Rs.56,51,36,481.
The case of the assessee was selected for scrutiny and assessment was framed under section 143(3) of the I.T. Act, 1961 and the total income of the assessee was determined at Rs.5,86,65,31,285, inter alia, by disallowing Rs.1,36,47,143 under section 14A of the Income Tax Act, 1961.
On the aforesaid disallowance the A.O. vide penalty order passed under section 271(1)(c) of the I.T. Act, 1961 levied the penalty of Rs.153,24,26,390. Aggrieved the assessee preferred an appeal before the CIT(A) and the disallowance was deleted. Hence the Revenue is in appeal before the Tribunal.
The Counsel for the assessee,submitted that as far as the penalty on the disallowance of Section 14A is concerned, the CIT(A) deleted the penalty and submitted that on the aforesaid deletion of penalty, the Revenue is not in appeal.
A Division Bench consisting of Anil Chaturvedi, Accountant Member and Astha Chandra, Judicial Member observed that “The issue in the present appeal is with respect to levy of penalty by the A.O. under section 271(1)(c) of the I.T. Act, 1961 under three heads i.e., disallowance under section 14A. As far as the first issue of disallowance under section 14A is concerned, the CIT(A) deleted the penalty and the Revenue did not appeal before us. Therefore, we uphold the order of CIT(A) on this issue in absence of any appeal and in absence of any objection from the side of the Departmental Representative and delete the penalty levied by the A.O. on this issue.”
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