Tribunal cancels penalty under section 271(1)(c) for assessee due to deleted addition on equity shares The Tribunal ruled in favor of the assessee, deleting the penalty imposed under section 271(1)(c) of the Act. The basis for the penalty was found to no ...
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Tribunal cancels penalty under section 271(1)(c) for assessee due to deleted addition on equity shares
The Tribunal ruled in favor of the assessee, deleting the penalty imposed under section 271(1)(c) of the Act. The basis for the penalty was found to no longer exist as the addition made by the Assessing Officer was previously deleted by the Tribunal in relation to the sale of equity shares. Consequently, the penalty was removed, and the appeal of the assessee was allowed.
Issues Involved: Levy of penalty u/s 271(1)(c) of the Act.
Analysis: The appeal was filed by the assessee against the order of Ld. CIT(Appeals), Ghaziabad for AY 2014-15, specifically challenging the levy of penalty u/s 271(1)(c) of the Act. The Assessing Officer had initially completed the assessment at an income of &8377; 41,20,100/- by treating the long term capital gain from the sale of shares as unexplained cash credit u/s 68 of the Act. Subsequently, penalty proceedings u/s 271(1)(c) were initiated by the AO. During the appeal proceedings, the CIT(A) observed discrepancies in the income declared by the assessee and enhanced the income by &8377; 10 lakhs, imposing the penalty for failure to substantiate the claim made in the return of income.
Upon further appeal, the AR of the assessee argued that the Tribunal had previously deleted the addition made by the AO, thereby challenging the basis for the levy of penalty u/s 271(1)(c). The DR could not counter this submission. The Tribunal had indeed deleted the addition made by the AO on account of the sale of equity shares. Consequently, the basis for the penalty no longer existed, leading to the deletion of the penalty imposed on the assessee. The Tribunal, therefore, allowed the appeal of the assessee, ruling in favor of the assessee and deleting the penalty.
In conclusion, the Tribunal found that since the addition made by the AO was deleted in a previous order, the basis for the penalty under section 271(1)(c) no longer existed. As a result, the penalty levied on the assessee was deleted, and the appeal of the assessee was allowed.
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