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Judgment
PER AMITABH SHUKLA, AM,
This appeal by Revenue is arising out of order of National Faceless Appeal Centre/learned Commissioner of Income Tax (Appeals), New Delhi [hereinafter referred to as ‘ld. CIT(A)] in appeal no.NFAC/2014-15/10252968, order dated 04.12.2024. The penalty under dispute was levied by ACIT, Circle-10(2), New Delhi, under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide order dated 19.03.2020 for Assessment Year 2015-16.
At the outset, learned CIT-DR pointed out that the Tribunal has already deleted the quantum addition on which the penalty proceedings under section 271(1)(c) of the Act was started and levied. He drew the observations of the ld. CIT(A) in para-6 of his order as under:-
“6. Observation and Decision
6.1I have carefully considered the facts of the case, penalty order, orders of the appellate authorities in quantum appeal and submissions of the appellant. Having discussed the facts of the case above and in view of the Hon’ble ITAT order allowing the appeal of the appellant filed against the quantum addition based on which penalty proceedings u/s 271(1)(c) of the Act was initiated by the AO and thereafter considering the Ld. CIT(A)’s order confirming the addition in the appellant’s case against the quantum addition, the AO levied penalty of Rs. 3,52,22,000/-, the appeal of the appellants is adjudicated accordingly.
The relevant para related to the decision of Hon’ble ITAT, Delhi is reproduced for reference –
“10.1Therefore, in view of the above-mentioned binding precedent, we are of the considered view that the assessee is entitled for depreciation as admissible on intangible assets. Thus, grounds raised by the assessee are allowed.”
As the underlying addition has been deleted by the Hon’ble ITAT in ITA No. 1297/Del/2019, the genesis of penalty u/s 271(1)(c) no more survives and there is no basis for sustaining the penalty imposed as a consequence of that addition. Thus, penalty levied by the AO to the tune of Rs. 3,52,22,000/- is hereby deleted and consequently, the only ground of appeal raised by the appellant is hereby allowed.”
After hearing ld. CIT-DR, we are of the view that once the genesis of penalty doesn’t survive, the penalty has rightly been deleted by the ld. CIT(A) as the Tribunal has already deleted the quantum addition. We therefore dismiss the appeal of the Revenue
In the result, the appeal of the Revenue is dismissed.