Back
2025 Supreme(Online)(ITAT) 3629
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH “A”, MUMBAI
BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER
AND
SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER
ITA No.3176/M/2025
Assessment Year: 2012-13
Shri Sagarmal Sohanlal
Jain,
M/s. Roopsangam
Jewellers,
Shop No.6, Omkar Society,
M.G. Road,
Opp. Railway Station,
Dombivli (West)
Maharashtra – 421 201
PAN: AATPJ4675K
Vs.
Income Tax Officer,
Ward 3(4), Kalyan,
Rani Mansion,
2nd Floor, Murbad Road,
Kalyan West,
Maharashtra – 421 301
(Appellant) (Respondent)
Present for:
Assessee by : Shri N.A. Kulkarni, A.R.
Revenue by : Shri Aditya M. Rai, Sr. D.R.
Date of Hearing : 25.06.2025
Date of Pronouncement : 26.06.2025
For the Appellants/Petitioners: Shri N.A. Kulkarni, A.R.
For the Respondents: Shri Aditya M. Rai, Sr. D.R.
The deletion of an addition does affect the validity of penalties imposed based on that addition.
Headnote:The appeal concerns a penalty under section 271(1)(c) of the Act for assessment year 2012-13. The appellant contested a penalty of Rs.34,608/- levied on the ground of concealed income, which the Tribunal recognized had been incorrectly upheld following prior orders. The court reiterated that the Tribunal had previously deleted an addition of Rs.1,12,000/- during quantum proceedings. The primary issue was whether the deletion of this addition affected the penalty. The Tribunal concluded that the penalty was improperly sustained and thus was deleted. The appeal is allowed.
| Table of Content |
|---|
| 1. penalty under dispute due to prior deletion. (Para 1 , 2) |
| 2. court observed reliance on previous tribunal decision. (Para 3) |
| 3. the addition of income was incorrectly levied. (Para 4 , 5 , 6) |
| 4. resulted in allowance of the appeal. (Para 7) |
ORDER
Per : Amit Shukla, Judicial Member:
The aforesaid appeal has been filed by the assessee against order dated 28.04.2025 passed by NFAC, Delhi in relation to the penalty proceedings under section 271(1)(c) of the Act for the assessment year 2012-13. The assessee is aggrieved by the levy of penalty of Rs.34,608/- under section 271(1)(c) of the Act on the ground that income under the head “Income from House Property” of Rs.1,12,000/- was concealed income.
2. At the outset, it has been stated that the Tribunal in the quantum proceedings has deleted the addition vide order dated 09.07.2024 in ITA No.506/M/2024. Therefore, penalty levied by the AO and confirmed by the Ld. CIT (A) should be deleted.
3. After considering the relevant findings given in the impugned order as well as order of the Tribunal, we find that the decision of the Tribunal was also relied upon by the AO and Ld. CIT (A) in the penalty proceedings. However, both AO and Ld. CIT (A) have held that penalty of Rs.1,12,000/- is different from the addition which has been deleted by the Tribunal.
4. The facts in brief are that in the original return of income the assessee had offered income from house property at Rs.4,62,000/-. After the receipt of notice under section 143(2) of the Act the return was revised on 02.01.2014, wherein the assessee had shown income from house property at Rs.8,20,000/- and after claiming statutory deduction, shown taxable property income of Rs.5,74,000/-. Accordingly, the amount of Rs.1,12,000/- was added by the AO on which the penalty has been levied.
5. However, precisely this issue has been dealt by the Tribunal in the quantum proceedings in para 11 which is reproduced hereunder:
“011. The second issue is with respect to the addition of ₹1,12,000/- which has already been offered to income by the assessee in the revised return filed and therefore, same cannot be added once again. Accordingly, the learned Assessing Officer directed to accept the return of income revised by the assessee on 2nd January, 2014, for the computation of taxable income. Thus, the addition of ₹1,12,000/- is also deserves to be deleted.”
6. Thus, the only addition which was made under the head “Income from House Property” of Rs.1,12,000/- has been deleted and therefore both the AO and the Ld. CIT(A) have grossly erred in holding that the deletion of addition by the Tribunal does not impact the addition in so far as penalty is concerned.
Accordingly, the penalty levied by the AO is deleted.
7. In the result, the appeal filed by the assessee is allowed.
