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Income Tax Appellate Tribunal - Delhi

M/S. Shree Kaila Devi Real Estate Ltd., ... vs Dcit, New Delhi on 7 September, 2018

                                        1                 ITA Nos. 2131 & 2132/Del/2015



                    IN THE INCOME TAX APPELLATE TRIBUNAL
                         DELHI BENCH: 'G' NEW DELHI

                BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER
                                      AND
                   MS SUCHITRA KAMBLE, JUDICIAL MEMBER

            ITA Nos. 2131/DEL/2015 & 2132/Del/2015 ( A.Y 2003-04)

     Shree Kaila Devi Real Estate Ltd.         Vs    DCIT
     12, Ring Road,                                  Central Circle-07
     Lajpat Nagar-IV                                 ARA Centre, Jhandewalan
     New Delhi                                       Extn.
     AAGCS7321D                                      New Delhi
     (APPELLANT)                                      (RESPONDENT)


                  Appellant by       Sh. Sudesh Garg
                  Respondent by      Sh. S. S. Rana, CIT DR

                    Date of Hearing              05.09.2018
                    Date of Pronouncement        07.09.2018

                                      ORDER

PER SUCHITRA KAMBLE, JM

These two appeals are filed by the assessee against the order dated 16/2/2015 & 24/03/2015 passed by CIT(A)-XXIV, New Delhi for Assessment Year 2003-04.

2. The grounds of appeal are as under:- ITA No. 2131/DEL/2015

1. "The Ld.CIT (A) has erred on facts and in law in not considering the facts and circumstances of the case and has further erred in rejecting the request of the appellant for condonation of delay.

2. The Ld. CIT (A) has erred on facts and in law in denying substantive justice to the appellant by dismissing the appeal of the appellant on 2 ITA Nos. 2131 & 2132/Del/2015 ground of delay in filing of appeal.

The appellant craves for liberty to add fresh ground(s) of appeal and also to amend, alter, modify any of the grounds of appeal."

1. The Ld. CIT (A) has erred on facts and in law in dismissing the appeal of the appellant against imposition of penalty under section 271(1 )(c) of the Income Tax Act. 1961.

2. The Ld. CIT (A) has erred on facts and in law in denying the opportunity of being heard to the appellant merely because the appellant could not avail of the opportunity before the assessing officer.

3. The Ld. CIT (A) has erred on facts and in law in upholding the penalty order without looking at the merit of the additions made especially in view of the fact that the appeal on quantum addition was dismissed only on account of delay in filing of appeal.

4. The Ld. CIT (A) has erred on facts and in law in summarily dismissing the detailed submission of the appellant without ascribing any reason whatsoever and has further erred in confirming the penalty u/s 271(1 )(c) of the Income tax Act, 1961 without satisfying himself about the basic ingredients for imposition of penalty as stipulated by Explanation 1 to section 271(1 )(c) of the Act.

3. As regards order dated 16/2/2015, the same is related to assessment order dated 11/3/2013 passed u/s 144/263 by the Assessing Officer. As regards ITA No. 2132/DEL/2015, the same is in respect of penalty levied u/s 271(1)(c) of the Act.

4. The Ld. AR submitted that order u/s 263 dated 23/3/2012 was subject matter of appeal before the Tribunal and the Tribunal vide its order dated 30/5/2016 while quashing the order u/s 263 of the Act held as under:-

"15. In the instant appeal before us, the AO has conducted an enquiry. However, he has not launched a lengthy discussion on the issue of share capital but that does not lead to an inference that there has been a lack of enquiry on his part on the issue. It is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an AO, acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because according to him the order should have been more elaborately. This section does not visualize a case of substitution of the judgment of the Commissioner for that of the AO. Therefore, it cannot be held in the instant case the AO's order was erroneous and prejudicial to the interest of the revenue within the terms of section 263 of the Act. Once the issue of share capital was considered and examined by the Assessing Officer, Ld. Commissioner cannot set aside the order without recording contrary finding. This will be contrary to Section 263 of the Act. Therefore, in view of the factual matrix of the case and respectfully following the ratio of the various judicial pronouncements as discussed above, we are of the considered opinion that the impugned action of the Ld. CIT u/s 263 of the Act was patently illegal and liable to be quashed. The proceedings u/s 263 of the Act are accordingly quashed."

As the proceedings, u/s 263 of the Act have been quashed by the Tribunal, therefore, the assessment and penalty proceedings started consequent to that order, does not survive. The order of the Tribunal, however, was subject matter of appeal before the Hon'ble Allahabad High Court and order has been passed by the Hon'ble High Court dismissing the appeal on the ground of territorial jurisdiction with the permission to file appeal before the Hon'ble High Court.

6. The Ld. AR submitted that the Department has yet not filed any appeal before the Hon'ble Delhi High Court. The Ld. AR further submitted that as per their understanding Department may not file fresh appeal before the Hon'ble Delhi High Court as the tax effect of the corresponding order u/s 143(3) of the Income Tax Act, 1961 is Rs.31,24,519/- which is much below the threshold limit for filing of appeal before the Hon'ble High Court which is Rs.50 lacs in terms of Circular No. 03 of 2018.

7. The Ld. DR submitted that the Department has been given liberty to file appeal before the Hon'ble Delhi High Court. Therefore, these appeals may be adjourned.

8. We have heard both the parties and perused all relevant material available on record. It is pertinent to note that as of today the situation is that order passed u/s 263 has been quashed by the Tribunal vide order dated 30/5/2016. These two appeals are passed in consequence to the order u/s 263 which is now quashed. Therefore, these two appeals does not survive. There is no appeal pending in Hon'ble High Court. Therefore, both the appeals are dismissed. The revenue is at liberty to revive these appeals in case the Hon'ble High Court given the decision in favour of the Revenue.

9. In result, both the appeals of the assessee are allowed.

Order pronounced in the Open Court on 07th September, 2018.

     Sd/-                                                      Sd/-

(R. K. PANDA)                                            (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER                                        JUDICIAL MEMBER

Dated:      07/09/2018
Copy forwarded to:

1.                           Appellant
2.                           Respondent
3.                           CIT
4.                           CIT(Appeals)
5.                           DR: ITAT




                                                   ASSISTANT REGISTRAR

                                                       ITAT NEW DELHI
                           5                      ITA Nos. 2131 & 2132/Del/2015


Date of dictation                                    05.09.2018

Date on which the typed draft is placed before the 06.09.2018 dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr. PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. 7.09.2018 PS/PS Date on which the final order is uploaded on the 7.09.2018 website of ITAT Date on which the file goes to the Bench Clerk 7.09.2018 Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order