Case Number: ITA 2995/DEL/2022
Appellant: Rajesh Mangla, Faridabad
Respondent: DCIT, Central Circle-2, Faridabad
Assessment Year: 2009-10
Case Filed On: 2022-12-23
Order Type: Final Tribunal Order
Date of Order: 2023-08-25
Pronounced On: 2023-08-25
In the case of Rajesh Mangla vs. DCIT, Central Circle-2, Faridabad, the appellant, Rajesh Mangla, challenged the penalty levied under Section 271 (1) (c) of the Income-tax Act, 1961, for the assessment year 2009-10. The penalty in question amounted to Rs.1,04,905/-. The case was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘F’ on 23rd August 2023, with the final order pronounced on 25th August 2023.
The appeal arose from the order passed by the Commissioner of Income-tax (Appeals)-3, Gurgaon on 28th October 2022. The appellant, represented by Shri Deepesh Garg, Advocate, contended that the quantum addition, which was the basis for the penalty, had already been deleted by the ITAT in a previous order dated 21st June 2023 in ITA No.2810 & 2812/Del/2018 for the assessment years 2007-08 and 2009-10.
During the proceedings, the counsel for the appellant submitted that since the quantum addition had been deleted, the penalty under Section 271 (1) (c) should also be annulled. The Revenue, represented by Shri Sanjay Gupta, CIT DR, did not provide any substantial rebuttal to this argument.
The ITAT bench, comprising Shri Shamim Yahya (Accountant Member) and Shri Yogesh Kumar US (Judicial Member), agreed with the appellant’s contention. The bench noted that the penalty was based on the quantum addition, which no longer existed following its deletion by the ITAT in the earlier order. Therefore, the penalty levied under Section 271 (1) (c) for the assessment year 2009-10 was deemed unsustainable.
The tribunal’s order stated: ‘Since quantum addition has been deleted, we delete the penalty levied under Section 271 (1) (c) of the Act for both assessment years.’ Consequently, the appeals filed by the assessee for the assessment years 2007-08 and 2009-10 were allowed.
In conclusion, the ITAT’s decision to delete the penalty under Section 271 (1) (c) was based on the prior deletion of the quantum addition. This case highlights the importance of the foundational basis of penalties in tax assessments and the subsequent impacts of higher appellate decisions on such penalties.
Order Pronounced: In the open court on 25th August 2023.
Bench: Shri Shamim Yahya, Accountant Member and Shri Yogesh Kumar US, Judicial Member
Copy forwarded to:
Date of Hearing: 23rd August 2023
Date of Order: 25th August 2023
Rajesh Mangla vs. DCIT, Central Circle-2, Penalty under Section 271 (1) (c) Appeal for AY 2009-10
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