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Judgment
PER AMITABH SHUKLA, ACCOUNTANT MEMBER:
These two appeals are filed by the assessee against the order of the National Faceless Appeal Centre, Delhi, both dated 30.10.2025 arising out of penalty orders both dated 31.03.2019 passed by the DCIT, Circle-25(1) Delhi, under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for Assessment Years 2011-12 and 2012-13.
The Assessee has raised the following grounds of appeal for Assessment Year 2011-12:
1.That on the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in dismissing the appeal being infructuous instead of allowing the appeal despite being aware of the facts that the quantum appeal of the Appellant on the adjustments made by the Assessing Officer (“AO”) is being allowed by the Income Tax Appellate Tribunal, Delhi (“Tribunal”) vide judgement dated 05.10.2023 in Appeal Number 4097/Del/2017 in favour of the Appellant.
2.That on the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in incorrectly considering the submission filed by the Appellant seeking deletion of the penalty demand on account of quantum appeal being already decided in favour of the appellant.
3.That on the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in dismissing the appeal being infructuous as the status of the penalty order passed by the AO would not change and the penalty demand of INR 63,80,085 would remain as it is.
4.That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating that the penalty order passed by Ld. AO is without authority of law, as the penalty has been levied by Ld. AO in respect of additional income alleged to be concealed. However, the additional income/ disallowances made as per Order passed by AO has already been quashed by ITAT. Accordingly, the present penalty order is liable to be quashed and penalty should be directed to be deleted.
5.Without prejudice to the above grounds, the Ld. CIT(A) erred in not appreciating that the order of penalty passed u/s 271(1)(c) of the Act is bad in law as from the notice issued u/s 274 read with Section 271 of the Act, it is not discernible as to whether the penalty proceedings were initiated for furnishing of inaccurate particulars of income or concealment of income under the facts and circumstances of the Appellant's case.
The Assessee has raised the following grounds of appeal for Assessment Year 2012-13:
1.That on the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in dismissing the appeal being infructuous instead of allowing the appeal despite being aware of the facts that the quantum appeal of the Appellant on the adjustments made by the Assessing Officer (“AO”) is being allowed by the Income Tax Appellate Tribunal, Delhi (“Tribunal”) vide judgement dated 05.10.2023 in Appeal Number 4098/Del/2017 in favour of the Appellant.
2.That on the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in incorrectly considering the submission filed by the Appellant seeking deletion of the penalty demand on account of quantum appeal being already decided in favour of the appellant.
3.That on the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in dismissing the appeal being infructuous as the status of the penalty order passed by the AO would not change and the penalty demand INR 72,16,741 would remain as it is.
4.That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating that the penalty order passed by Ld. AO is without authority of law, as the penalty has been levied by Ld. AO in respect of additional income alleged to be concealed. However, the additional income/ disallowances made as per Order passed by AO has already been quashed by ITAT. Accordingly, the present penalty order is liable to be quashed and penalty should be directed to be deleted.
5.Without prejudice to the above grounds, the Ld. CIT(A) erred in not appreciating that the order of penalty passed u/s 271(1)(c) of the Act is bad in law as from the notice issued u/s 274 read with Section 271 of the Act it is not discernible as to whether the penalty proceedings were initiated for furnishing of inaccurate particulars of income or concealment of income under the facts and circumstances of the Appellant's case.
Both the appeals of the appellant assessee are centering around the issue of penalty order under section 271(1)(c) of the Act for AYs 2011-12 and 2012-13 and hence for the purposes of convenience were heard together and are being adjudicated by this common order. We shall take the facts and figures for AY 2011-12 and the decision taken therein shall apply the mutatis mutandis for AY 2012-13 as well.
As per brief factual matrix of the case are that the assessee had filed Return of Income at NIL for AY 2011-12. Assessment was completed under section 143(3) of the Act determining total income which inter alia included addition of Rs.42,43,71,100/- on account of deduction under section 80IA of the Act. In appeal, the ld. CIT(A) confirmed the additions on account of deduction under section 80IA of the Act amounting to Rs.24,99,84,100/-. The ld. AO imposed penalty under section 271(1)(c) of the Act amounting to Rs.63,80,085/-. The ld. CIT(A) confirmed the impugned penalty which is being currently contested by the assessee.
The short point raised by the ld. Counsel for the assessee is that no case of imposition of penalty is made out since the quantum addition upon which the penalty order is resting, stands deleted by an order of this Tribunal. Reference was invited to order in ITA Nos.4097 and 4098/Del/2017 in assessee’s own case. In the impugned matter, the Revenue had contested the order of the Ld. CIT(A) granting relief to the assessee. The ld. Counsel argued that as the quantum addition stands deleted, there cannot be any case for imposition of penalty.
The Ld. DR placed reliance upon the orders of the lower authorities.
We have heard the rival submissions in the light of material placed on record. It is trite law that no penalty is leviable in case there is no addition of income leading to rise in any amount of tax sought to be evaded. We have considered the impugned order of this Tribunal in ITA Nos.4097 and 4098/Del/2017 (supra). We have noted that the quantum addition on account of u/s 80IA deduction has been deleted by the Co-ordinate Bench of this Tribunal. Accordingly, we are of the considered view that no case of any concealment penalty is made out in this case. We therefore set-aside the order of the Ld. CIT(A) and delete the penalty imposed by the ld. AO u/s 271(1)(c) of the Act of Rs.63,80,085/-. The appeal of the assessee is allowed in ITA No.8666/Del/2025.
As the facts of the case in assessee’s appeal in ITA No.8667/Del/2025 are identical to those in ITA No.8666/Del/2025 (supra), the decision therein shall apply mutatis mutandis to this appeal also.
Finally, both the appeals of the assessee in ITA Nos. 8666 and 8667/Del/2025 are allowed.