The Cuttack Bench of Income Tax Appellate Tribunal has held that penalty u/s 271 alone will not exist after deletion of addition on Income.
During the course of assessment proceedings against the appellant, the PrajatantraPrachar Samity, the Assessing officer made addition on income and impose penalty u/s 271. Aggrieved by the addition and imposing penalty assessee preferred appeal before ITAT. On appeal ITAT deleted the addition. Later the AO demanded the penalty under sec 271. Aggrieved by the order assessee preferred appeal before CIT (A), which confirmed the imposition of penalty.
Aggrieved, assessee appealed before the ITAT against the order CIT (A) imposing penalty. The counsel for the appellant submitted that the additions in the quantum assessment have been deleted by the Co-ordinate Bench of Cuttack Tribunal. The appellant further submitted that the quantum additions itself have been deleted by the Tribunal, the penalty u/s 271 is liable to be cancelled.
The Tribunal observed that the Co-ordinate Bench of this Tribunal has already deleted the additions made in the quantum assessments on the basis of which penalty has been levied u/s.271(1)(c) of the Act for all the three assessment years.
The Coram of Mr. George Mathan, Judicial Member and Mr. Arun Khodpia, Accountant Member has held that “we are of the view that the penalty has no more legs to stand. Consequently, we cancelthe penalty levied u/s.271(1)(c) of the Act by the AO and confirmed by the
CIT (A) for the impugned assessment years.
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