Section 271, 274 of Income Tax Act, 1961—Penalty u/s 271(1)(c)—Penalty on deleted addition—In the instant case, assessee stated that penalty levied u/s 271(1)(c) is not sustainable because addition made by AO and CIT on account of disallowance of expenditure claimed by the assessee has been deleted.

Held that— When undisputedly addition on the basis of which penalty proceedings have been initiated is no more in existence having been deleted by the Tribunal, penalty levied by AO and confirmed by the ld. CIT(A) is not sustainable in the eyes of law, hence ordered to be deleted in view of the judgment rendered by the Hon’ble Apex Court in the case of K.C. Builders & Anr vs. ACIT – 265 ITR 562 (SC) wherein it is held that, “when the addition made in the assessment order on the basis of which penalty for concealment is levied have been deleted there remains no basis at all for levying the penalty for concealment and in such case, no penalty can survive and the penalty is liable to be cancelled.” So, in view of the matter, penalty levied by the ld. CIT (A) is ordered to be deleted. Consequently, the appeal filed by the assessee stands allowed.[M/S. JUBILANT BIOSYS LIMITED VERSUS JCIT, RANGE 1, NOIDA.] [2019] 10 ITCD Online (53) [ITAT DELHI]