This case involves an appeal by Dawesh Bishnoi against the order dated 29.07.2022 of the learned Commissioner of Income-tax (Appeals)-42, Delhi, which confirmed the penalty imposed of Rs. 5,22,600 under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 2012-13.
The grievance was regarding a penalty based on an addition that was subsequently deleted by the Tribunal during a previous quantum appeal of the assessee.
At the hearing, the counsel for the assessee pointed out that since the addition serving as the basis for the penalty had been deleted, the penalty could not stand. The Departmental Representative agreed with this submission. The Tribunal noted that the foundational addition of Rs. 17,52,930 under section 68 of the Act had been deleted, thereby removing the basis for the penalty. Consequently, the penalty under section 271(1)(c) was also deleted.
The Tribunal’s decision underscores the principle that penalties based on additions, if those additions are overturned, must also be reconsidered. This case highlights the importance of correlating penalties directly with the validity of the underlying additions.
The appeal was allowed, and the penalty imposed under section 271(1)(c) was deleted, providing relief to Dawesh Bishnoi. This case is a testament to the judicial process ensuring that penalties are justly applied and contingent upon the sustainability of the additions they are based on.
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