2024 (5) TMI 1712

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....t the penalty orders by the Income Tax Officer, Ward 9(2)(1), Mumbai, u/s. 271(1)(c) r.w.s 274 of the Income-tax Act (hereinafter referred to as the "Act"), dated 26.03.2014 for Assessment Year 2006-07 and by the Income Tax Officer, Ward-12(3)(1), Mumbai, dated 31.03.2016 for Assessment Year 2005-06. 2. Grounds taken by the Revenue are reproduced as under: ITA Nos.311/MUM/2024 1. "Whether on the facts and in the circumstance of the case and in law the Ld. CIT(A) is justified to delete penalty of Rs. 4,01,16,280/- made by AO u/s. 271(1)(c) of the Income Tax Act, 1961, without appreciating the fact that the quantum proceedings vide appeal no. 3603/MUM/2013 dated 21.10.2022 was not accepted by the Revenue Department and further ....

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.... (being payments through journal entries) and addition of undisclosed commission income of Rs.4,47,650/-. Penalty proceedings were initiated under Section 271(1)(c) for furnishing inaccurate particulars of income and concealment of income. 4. Assessee appealed the assessment order before the ld. CIT(A) who upheld the additions made by the ld. AO of Rs. 7,11,53,823/- and Rs. 4,47,650/-. With regard to the addition of Rs. 2,13,00,000/-, ld. CIT(A) directed the ld. Assessing Officer to recalculate the STCG who again made addition of Rs. 2,13,00,000/- as the assessee failed to furnish necessary details. 4.1 Assessee took up the quantum matter before the Tribunal for both the assessment years i.e., AY 2006-07 and 2005-06 in appeal before u....

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....ere initiated have been quashed, and the quantum addition has been deleted. In such circumstances, the penalty levied u/s 271(1)(c) cannot survive. Accordingly, the penalty of Rs. 4,01,16,280/- imposed by the AO u/s. 271(1)(C) of the Act is hereby deleted. Thus, the ground of appeal No.1 is allowed." 7. Considering the above facts and circumstances of the case, since the quantum appeal is held in favour of the assessee in terms of the observations and findings noted above, the penalty so imposed is not justified. There is no tax sought to be evaded as contained in explanation to section 271(1)(c) and therefore, no penalty is leviable in the present case. We do not find any reason to interfere with the factual finding arrived at by ld. CI....