Case Number: ITA 1440/DEL/2020
Appellant: ACIT Circle-2(2), New Delhi
Respondent: Alcatel Lucent Managed Solutions India Pvt Ltd, New Delhi
Assessment Year: 2012-13
Case Filed On: 2020-07-23
Order Type: Final Tribunal Order
Date of Order: 2022-10-20
Pronounced On: 2022-10-20
The case of ITA 1440/DEL/2020 involves an appeal by the ACIT Circle-2(2), New Delhi, against Alcatel Lucent Managed Solutions India Pvt Ltd for the assessment year 2012-13. The primary issue is the deletion of a penalty imposed under section 271(1)(c) of the Income Tax Act concerning a disallowed bad debt claim.
Alcatel Lucent Managed Solutions India Pvt Ltd, located in New Delhi, filed its return of income for the assessment year 2012-13. During the assessment, the AO disallowed a bad debt claim, leading to a penalty of Rs. 9,56,85,812 under section 271(1)(c) for furnishing inaccurate particulars of income. The CIT(A) confirmed the penalty, prompting the assessee to file an appeal.
The AO imposed a penalty of Rs. 9,56,85,812, arguing that the assessee had provided inaccurate particulars of income by claiming a bad debt that was found to be part of a colorable device to reduce taxable income. The CIT(A) upheld the penalty, leading to the present appeal.
The assessee’s counsel submitted that the addition made in the assessment order, confirmed by the CIT(A), had been deleted in the quantum appeal filed by the assessee in ITA No. 5957/Mum/2016 by order dated 17/12/2019. Since the quantum appeal was allowed, deleting the addition, the penalty order and the CIT(A)’s order confirming the penalty could not sustain. The Tribunal reviewed the relevant documents and upheld the counsel’s argument, leading to the deletion of the penalty imposed on the assessee.
The Tribunal set aside the order passed by the CIT(A) and deleted the penalty imposed under section 271(1)(c) of the Income Tax Act. The appeal filed by the assessee was allowed.
This case underscores the importance of the outcome of quantum appeals in determining the validity of penalties imposed under section 271(1)(c). The Tribunal’s decision to delete the penalty was based on the prior deletion of the addition in the quantum appeal, highlighting the interconnectedness of these proceedings.
In summary, the appeal by Alcatel Lucent Managed Solutions India Pvt Ltd was allowed, and the penalty imposed by the AO was deleted.
Order pronounced in the Open Court on 20th October 2022.
Accountant Member: B. R. R. Kumar
Judicial Member: Yogesh Kumar U.S.
ACIT vs Alcatel Lucent Managed Solutions India Pvt Ltd – ITA 1440/DEL/2020
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