Appeal allowed by ITAT: Penalty under section 271(1)(c) deleted for AY 2012-13.

Green Valley Infracity Pvt. Ltd. Versus ITO Ward-1 (4), Noida

Green Valley Infracity Pvt. Ltd. Versus ITO Ward-1 (4), Noida - TMI Issues:
Levy of penalty under section 271(1)(c) of the Income Tax Act for Assessment Year 2012-13.

Analysis:
The appeal filed by the assessee was against the order of the Commissioner of Income Tax (Appeals)-I, Noida, relating to Assessment Year 2012-13. The assessee, a Real Estate Developer, had initially declared total income at Rs. Nil for A.Y. 2012-13. However, the assessment by the Assessing Officer resulted in a total income of &8377; 6,00,200/-. Subsequently, the CIT(A) enhanced the income to &8377; 33,35,52,203/- through various additions under different sections of the Act. The CIT(A) then levied a penalty of 100% of tax sought to be evaded on the enhanced income of &8377; 33,24,08,002/- under section 271(1)(c) of the Act. The assessee appealed against this penalty order on multiple grounds challenging the validity and legality of the penalty imposed.

The main contention before the ITAT was the levy of penalty under section 271(1)(c) of the Act. The Learned AR argued that the CIT(A)'s order enhancing the income and subsequently levying the penalty was set aside by the ITAT in a previous appeal, rendering the penalty order void. The ITAT had found the enhancement made by the CIT(A) to be not tenable and had canceled the order of enhancement. As the penalty was based on the enhanced income, which was annulled by the ITAT, the ITAT held that the penalty order passed by the CIT(A) did not survive. Consequently, the ITAT directed the deletion of the penalty levied by the CIT(A) and allowed the grounds of the assessee's appeal.

In conclusion, the ITAT allowed the appeal of the assessee, directing the deletion of the penalty levied under section 271(1)(c) of the Act for Assessment Year 2012-13. The ITAT's decision was based on the annulment of the enhancement made by the CIT(A) by the ITAT in a previous appeal, rendering the penalty order invalid and non-sustainable.