ITAT Quashes penalty post revision

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT), set aside a penalty imposed under Section 271AAC of the Income-tax Act. 

The Tribunal held that once the Principal Commissioner had deleted the underlying addition under Section 264 and the Assessing Officer had given effect to that revision by assessing the income at Nil, there remained no legal basis for sustaining or imposing a penalty. 

The ruling reinforces the settled principle that penalty cannot survive in the absence of the underlying addition.