Appeal allowed against penalty order under Income-tax Act for AY 2009-10. Addition to income deleted in quantum proceedings.

The Tribunal allowed the appeal against the penalty order imposed under section 271(1)(c) of the Income-tax Act, 1961, for the assessment year 2009-10. The Tribunal held that since the addition to income, which was the basis for the penalty, had been deleted in the quantum proceedings, the penalty was not sustainable. Therefore, the penalty under section 271(1)(c) was deleted, and the appeal of the assessee was allowed. The decision was pronounced on 7th August 2023.

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Issues involved:
The judgment deals with an appeal against a penalty order u/s 271(1)(c) of the Income-tax Act, 1961, pertaining to the assessment year 2009-10.

Details of the Judgment:

Issue 1: Challenge to Penalty Order
The appeal challenges the penalty order imposed u/s 271(1)(c) of the Income-tax Act, 1961, based on an addition to the income. The counsel for the assessee argued that since the impugned addition was deleted in quantum proceedings by the Tribunal, no penalty should be applicable.

Issue 2: Tribunal's Decision
After hearing both parties, the Tribunal noted that the addition, which formed the basis for the penalty, had been deleted in the quantum proceedings by the Coordinate Bench of the Tribunal. Consequently, the Tribunal ruled that as the grounds for imposing the penalty were no longer valid, the penalty u/s 271(1)(c) could not be sustained and was therefore deleted. The appeal of the assessee was allowed, and the order was pronounced in open court on 7th August, 2023.

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