Income Tax Appellate Tribunal - Hyderabad
Tracks & Towers Infratech Private ... vs Dcit 2(2), Hyderabad on 28 October, 2021
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES "A": HYDERABAD
(THROUGH VIRTUAL CONFERENCE)
BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER
AND
SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER
ITA No. 179/H/2021
Assessment Year: 2015-16
Tracks & Towers Infratech Vs. Dy. Commissioner of
Pvt. Ltd. (Part IX) Income-tax, ircle - 2(2),
Hyderabad. Hyderabad.
PAN - AACC 77497H
(Appellant) (Respondent)
Assessee by: Shri Mohd. Afzal
Revenue by: Shri Ravi Kiran
Date of hearing: 21/10/2021
Date of pronouncement: 28/10/2021
ORDER
PER L.P. SAHU, A.M.:
This appeal filed by the Assessee is directed against Pr. CIT - 2, Hyderabad's order dated 16/03/2021 for AY 2015-16 involving proceedings u/s 263 of the Income Tax Act, 1961 ; in short "the Act, on the following grounds of appeal:
"1. The order of the ld. Pr. CIT of Income Tax is against the law, weight of evidence and probabilities of case.
:- 2 -: ITA No. 179/Hyd/2021 Tracks & Towers Infratech Pvt. Ltd., (Part IX) Hyd.
2. The learned Pr. Commissioner erred in assuming that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of revenue since the Assessing Officer failed to initiate penalty proceedings u/s 271(1)(c) of the IT Act while passing the assessment order u/s 143(3) of the IT Act and further erred in setting aside the order.
3. The learned Pr. Commissioner erred in passing the order u/s 263 on 16.03.2021, setting aside the order dt:
29.12.2017, which is beyond the period of limitation mentioned at section 263(2) of the IT Act.
4. The learned Pr.Commissioner ought to have appreciated that the penalty proceedings u/s 271(1)(c) can only be initiated in the course of any proceedings under this Act and therefore, erred in setting aside the order u/s 143(3) for the purpose of initiating proceedings u/s 271(1)(c) of the IT Act.
5. The learned Pr. Commissioner erred in assuming that the Assessing officer has given a finding in respect of initiation of penalty u/s 271(1)(c) of the IT Act, therefore, further erred in setting aside the order for initiating proceedings u/s 271(1)(c) of the IT Act.
6. The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if it is considered necessary."
2. Briefly the facts of the case are that the assessee company filed its return of income for the AY 2015 -16 on 26/09/2015 declaring taxable income of Rs.17,20,27,320/-. Subsequently, the case was selected for scrutiny and statutory notices were issued to the assessee. A survey was also conducted in the business premises at 8 -2-
:- 3 -: ITA No. 179/Hyd/2021 Tracks & Towers Infratech Pvt. Ltd., (Part IX) Hyd.
293/82/A/J/111, Plot No. 206, Road No. 76, Jubilee Hills Hyderabad on 22/02/2016. During the course of survey proceedings, it was noticed that the assessee has inflated the expenditure by making payment to sub-contractors and to this effect, the Managing Director of the assessee company admitted that the discrepancy found during the course of survey proceedings in regard to payment to sub - contractors is an inflated expenditure and accepted and disclosed voluntarily as under:
AY 2015-16 Rs. 5,00,00,000/-
AY 2016-17 Rs. 10,00,00,000/-
2.1 During the assessment proceedings, the assessee revised its return of income and offered Rs. 5 crores as income. Accordingly, the AO completed the assessment u/s 143(3) of the Act assessing the income of the assessee at Rs. 22,22,94,933/- by disallowing the claim of the assessee u/s 80IA to the tune of Rs. 12,50,23,062/-
3. The Pr. CIT exercising his powers vested u/s 263, called for the assessment records of the assessee for the impugned AY and on examination of the same, he noticed that the AO has not initiated penalty proceedings in the assessment order and, therefore, he was opinion that the order passed by the AO is erroneous and prejudicial to the interests of revenue. Accordingly, he issued a show cause notice to the assessee u/s 263 on 18/03/2020 proposing to set aside the assessment or revised the assessment :- 4 -: ITA No. 179/Hyd/2021 Tracks & Towers Infratech Pvt. Ltd., (Part IX) Hyd.
completed for the AY 2015-16 and the assessee was given opportunity for hearing on 26/03/2020. In response, the assessee filed written submissions and after considering the same as well as relying on some case law, the Pr. CIT directed the AO to revise the assessment order and directed to initiate penalty u/s 271(1)(c) r.w.s. 274 of the Act, by passing the order on 16/03/2021.
4. Aggrieved by the order of Pr. CIT, the assessee is in appeal before the ITAT.
5. Before us, the ld. AR submitted that the order passed by the Pr.CIT is not asper section 263(2) of the Act, which is barred by limitation and, therefore, the order passed by the Pr. CIT is void-ab-initio.
6. The ld. DR, on the other hand, relied on the order of Pr. CIT.
7. After hearing both the parties and perusing the material on record as well as the orders of revenue authorities, we observe that the assessment order was passed on 29/12/2017 for AY 2015-16 and the ld. Pr. CIT issued show cause notice on 18/03/2020 and has passed his order u/s 263 of the Act on 16/03/2021, which was objected by the ld. AR on the ground that the order passed :- 5 -: ITA No. 179/Hyd/2021 Tracks & Towers Infratech Pvt. Ltd., (Part IX) Hyd.
by Pr. CIT is barred by limitation as per section 263(2) of the Act. Sub-Section (2) of section 263 reads as under:
" No order shall be made under sub- section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed."
7.1 It is clear from the said sub-section that in the instant case, the order u/s 263 of the Act should have been made by Pr. CIT on or before 31/03/2020, whereas, in the impugned case the order has been passed by the ld. Pr. CIT on 16/03/2021, which is beyond the prescribed period as per section 263(2) of the Act and, therefore, the order passed by the ld. Pr. CIT is bared by limitation. Accordingly, the grounds raised by the assessee on this issue are allowed.
8. In the result, appeal of the assessee is allowed in above terms.
Pronounced in the open court on 28 th October, 2021.
Sd/- Sd/-
(S.S. GODARA) (L. P. SAHU)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated: 28 th October, 2021.
kv
:- 6 -: ITA No. 179/Hyd/2021
Tracks & Towers Infratech Pvt. Ltd., (Part IX) Hyd.
Copy to :
1 Tracks & Towers Infratech Pvt. Ltd., (Part IX) C/o Mohd. Afzal, Advocate, 11-5-465, Sherson's Residency, Flat No. 402, Criminal Court Road, Red Hills, Hyderabad - 500 004.
2 DCIT, Circle - 2(2), Signature Towers, Kondapur, Opp. Botanical Gardens, RR District.
3 Pr. CIT - 2, Hyderabad.
4 Addl. CIT, Range - 2, Hyderabad. 5 ITAT, DR, Hyderabad.
6 Guard File.
S.No. Details Date
1 Draft dictated on
2 Draft placed before author
Draft proposed & placed before
3
the Second Member
Draft discussed/approved by
4
Second Member
Approved Draft comes to the Sr.
5
PS/PS
6 Kept for pronouncement
7 File sent to Bench Clerk
Date on which the file goes to
8
Head Clerk
9 Date on which file goes to A.R.
10 Date of Dispatch of order