The Tax Publishers2020 TaxPub(DT) 5208 (Mum-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Where the very basis for levy of penalty, i.e., addition made in assessment proceedings was deleted by Tribunal, the consequential penalty levied under section 271(1)(c) had no legs to stand and hence, the same was liable to be deleted.

Penalty under section 271(1)(c) - Leviability - Quantum addition being deleted -

AO treated gains on sale of residential flat by assessee as short-term capital gain as against claim of the assessee that it should be assessed as long-term capital gain. Consequentially, penalty under section 271(1)(c) was imposed upon the assessee. Assessee submitted that Tribunal deleted the addition/disallowance made in the quantum proceedings and since the addition made in the quantum proceedings was deleted by the Tribunal, the consequential penalty under section 271(1)(c) would not survive. Held: It was found that the Tribunal accepted the claim of the assessee in respect of long-term capital gain and deleted the addition made on that account. Therefore, since the very basis for levy of penalty, i.e., addition made in assessment proceedings was deleted by the Tribunal, the consequential penalty levied under section 271(1)(c) had no legs to stand and the same was accordingly, deleted.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13



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