Case Number: ITA 1778/DEL/2019
Appellant: Ratroi Maa Trading Pvt. Ltd.
Respondent: ITO Ward-21(1), New Delhi
Assessment Year: 2009-10
Date of Filing: March 5, 2019
Order Type: Final Tribunal Order
Date of Order: August 7, 2023
Date Pronounced: August 7, 2023
The case ITA 1778/DEL/2019, filed by Ratroi Maa Trading Pvt. Ltd. against the ITO Ward-21(1), New Delhi, pertains to the assessment year 2009-10. The appeal was directed against the penalty order u/s 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), passed by the learned Commissioner of Income-tax (Appeals)-XXV, New Delhi, on January 2, 2019.
The solitary effective ground raised by the assessee was that the CIT(A) erred in making an addition by enhancing the income of Rs. 3,27,45,060/- and subsequently imposing a penalty amounting to Rs. 1,01,18,224/- (@ 100%) under section 271(1)(c) of the Act.
The case was heard by the Delhi Bench “F” of the Income Tax Appellate Tribunal, consisting of Shri Kul Bharat, Judicial Member, and Dr. B.R.R. Kumar, Accountant Member. The hearing took place on August 3, 2023, and the order was pronounced on August 7, 2023.
During the hearing, the assessee was represented by Shri Shil Gupta, CA, while the Department was represented by Shri Vivek Vardhan, Sr. DR.
The learned counsel for the assessee challenged the impugned penalty order, submitting that in the quantum proceedings, the Coordinate Bench of the Tribunal in ITA no. 7489/Del/2018, vide order dated June 13, 2023, had deleted the impugned addition. Therefore, no penalty would survive.
On the other hand, the learned Departmental Representative (DR) supported the impugned penalty order but conceded that the Tribunal in the quantum appeal (ITA no. 7489/Del/2018) had deleted the addition.
After hearing the rival submissions and perusing the material available on record, the Tribunal noted that in the quantum proceedings, the addition, which was the basis for imposing the impugned penalty u/s 271(1)(c) of the Act, had been deleted by the Coordinate Bench of the Tribunal vide its order dated June 13, 2023, in ITA no. 7489/Del/2018. Therefore, since the very basis for the levy of penalty had gone, the impugned penalty levied u/s 271(1)(c) of the Act could not survive and stood deleted accordingly.
The appeal of the assessee, Ratroi Maa Trading Pvt. Ltd., was allowed. The Tribunal’s decision was based on the fact that the penalty under section 271(1)(c) was imposed due to an addition that had been deleted in the quantum proceedings. Consequently, the penalty could not be sustained.
This case emphasizes the importance of the underlying basis for penalties under the Income-tax Act, 1961. If the addition on which a penalty is based is deleted, the penalty itself cannot be upheld. This decision provides clarity on the application of section 271(1)(c) and reinforces the principle that penalties cannot be imposed in the absence of a valid basis.
This case is part of a broader set of appeals involving various parties. The Tribunal’s decision in ITA no. 7489/Del/2018 was crucial in the outcome of this case. The consistent application of judicial principles across multiple cases ensures fairness and uniformity in the application of tax laws.
Other related cases, such as ITA No.- 4965/Del/2019 involving Samsung Data Systems India Pvt. Ltd. and other appeals, also highlight the importance of adhering to CBDT guidelines and judicial precedents in tax litigation.
The detailed judgments and case records provide valuable insights into the decision-making process of the Tribunal and the implementation of tax regulations in India. These cases serve as important references for tax professionals and businesses in understanding the implications of various provisions of the Income-tax Act, 1961.
Note: This article is a summary of the tribunal’s order in ITA 1778/DEL/2019 and related cases. For detailed information, please refer to the official tribunal records.
Ratroi Maa Trading Pvt. Ltd. vs. ITO Ward-21(1), New Delhi: Assessment Year 2009-10
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