Dismissed penalties under section 271(1)(c) for A.Y. 2012-13 and 2014-15

The Tribunal dismissed the Revenue's appeals for A.Y. 2012-13 and A.Y. 2014-15 regarding penalties under section 271(1)(c) of the Income Tax Act. The Tribunal ruled that once the additions/disallowances forming the basis for the penalties were deleted, the penalties could not be upheld independently. The decisions were based on the principle that if the additions were not sustained, the penalties imposed could not stand alone.

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Issues Involved:
Appeal against orders passed by CIT(A) for A.Y. 2012-13 and A.Y. 2014-15 regarding penalty under section 271(1)(c) of the Income Tax Act based on additions made by the Assessing Officer.

Analysis:

A.Y. 2012-13:
1. The assessee's return for A.Y. 2012-13 was selected for scrutiny assessment under section 143(2) of the Act.
2. The Assessing Officer (A.O) made additions totaling to Rs. 2,40,00,000/- for bogus loans, Rs. 1,37,750/- for interest on bogus loans, and Rs. 92,000/- for commission on bogus loans.
3. Subsequently, a penalty of Rs. 82,35,693/- was imposed by the A.O under section 271(1)(c) of the Act.
4. The CIT(A) deleted the penalty based on the Tribunal vacating the additions/disallowances made by the A.O.
5. The Revenue appealed the CIT(A)'s decision, arguing that the Tribunal's order on the quantum appeal was not accepted by the department.
6. The Tribunal upheld the CIT(A)'s decision, stating that once the additions were deleted by the Tribunal, the penalty could not stand alone and was unsustainable in law.
7. Consequently, the appeal filed by the Revenue for A.Y. 2012-13 was dismissed.

A.Y. 2014-15:
1. The issues and facts in the appeal for A.Y. 2014-15 were similar to those in the A.Y. 2012-13 appeal.
2. The Tribunal applied the same reasoning as in the previous appeal and dismissed the appeal for A.Y. 2014-15.
3. Both appeals filed by the Revenue for A.Y. 2012-13 and A.Y. 2014-15 were dismissed as they lacked merit.
4. The orders were pronounced on 06.10.2021.

In both cases, the Tribunal emphasized that once the Tribunal deleted the additions/disallowances that formed the basis for the penalty under section 271(1)(c) of the Act, the penalty could not be sustained. The decisions were based on the principle that if the additions were not upheld, the penalty imposed could not stand alone.

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