The case of ITA No. 904/DEL/2020 features an appeal by the Assistant Commissioner of Income Tax, Circle-27(1), New Delhi against U K Paints India Pvt. Ltd., regarding a significant penalty deletion by the CIT(A). This decision follows the quantum deletions for assessment years 2007-08 to 2013-14, which ultimately influenced the penalty outcomes.
Both the appeals by the revenue stem from a common order of the CIT(A)-28, New Delhi, which dealt with penalties levied under section 271(1)(c) of the Income Tax Act, 1961 for alleged concealment of income. The core issue contested was the CIT(A)’s deletion of a penalty totaling Rs.81,03,423 initially levied by the Assessing Officer.
The tribunal’s consideration centered around whether the penalty was correctly deleted given that the underlying quantum additions were also deleted by the tribunal in a prior order. The significant point of discussion was whether the original notice under section 271(1)(c) was defective and the implications of such defects on the penalty’s validity.
The Income Tax Appellate Tribunal agreed with the CIT(A)’s decision, noting that since the quantum additions were deleted, the basis for the penalty no longer existed. Therefore, the penalty for the assessment year 2007-08 was directed to be deleted, dismissing the revenue’s appeals. This case highlights the critical relationship between quantum additions and subsequent penalties.
ITA 904/DEL/2020: ACIT, Circle-27(1), New Delhi vs. U K Paints India Pvt. Ltd.
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