Nalanda Builders &Dvelopers I P Ltd, Agra V. DCIT CENTRAL CIRCLE, Agra

ITA 142/AGR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1780 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 05-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL BAJPAI
• Keywords: Principle of natural justice; Set aside
• Section: 68; 27; 132

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI LALIET KUMAR, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA NOS.142 TO 145/AGR/2017 ASSESSMENT YEARS: 2009-10 TO 2012-13 NALANDA BUILDERS & DEVELOPERS (I) LTD, FIRST FLOOR, SHANTI MALL, CHURCH ROAD, AGRA. PAN AACCN2200J (APPELLANT) VS. DCIT, CENTRAL CIRCLE, AGRA (RESPONDENT) APPELLANT BY S/SH. RAJENDRA SHARMA, MANUJ SHARMA, ADVOCATES RESPONDENT BY SH. SUNIL BAJPAI, CIT/DR & SH. WASEEM ARSHAD, SR. DR ORDER PER BENCH: THESE ARE FOUR CONNECTED THE APPEALS FILED BY THE ASSESSEE, FEELING AGGRIEVED BY THE ORDERS PASSED BY LD. CIT(A) CONFIRMING THE P ENALTY ORDERS ON VARIOUS GROUNDS INCLUDING THE FOLLOWING GROUNDS : 1. THAT THE CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW WHILE ENHANCING THE PENALTY AND IMPOSED THE SAME UNDER SECTION 271AAB(1 )(C) AS AGAINST IMPOSED BY THE AO UNDER SECTION 271AAB (1)(B) OF THE INCOME TAX ACT, THE PENALTY ENHANCED BY THE CIT (APPEALS) IS HIGHLY UNJUSTIFIED, PENALTY IMPOSED BY THE AO AND ENHANCED BY CIT (APPEALS) IS NOT CALLED FOR. PEN ALTY SO IMPOSED AND ENHANCED BY CIT (APPEALS) IS LIABLE TO BE CANCELLED. 2. THAT WHILE ENHANCING THE AMOUNT OF PENALTY @ 30% AT RS.46,27,350/- AS AGAINST IMPOSED BY THE AO AT RS.30,84,900/-, THE LE ARNED CIT (APPEALS) HAS NOT APPRECIATED THE FACTS, THAT THE AO HAS IMPOSED THE PENALTY UNDER SECTION DATE OF HEARING 15.07.2019 DATE OF PRONOUNCEMENT 16 .07.2019 [TYPE THE DOCUMENT TITLE] 2 271AAB (1)(B) OF THE INCOME TAX ACT WHICH IS AGAINST THE EXPARTE ORDER PASSED BY THE CIT (APPEALS), AGAINST THE QUANTUM OF ADDITIO N FOR WHICH THE APPEAL IS PREFERRED AND IS PENDING BEFORE THE HON'BLE ITAT. THA T DURING THE PENDENCY OF APPEAL PENDING WITH HON'BLE ITAT, AGRA BENCH, THE P ENALTY IMPOSED BY THE AO AND ENHANCED BY THE CIT (APPEALS) IS HIGHLY UNJUSTIF IED, SAME IS LIABLE TO BE CANCELLED. 3. THAT WHILE ENHANCING THE PENALTY AS IMPOSED UNDER SECTION 271AAB(L)(B) OF THE INCOME TAX ACT BY THE AO, THE AUTHORITY BELOW HA S NOT APPRECIATED THE FACTS THAT THE ADDITIONS ARE BEING MADE IN THE ASSESSMENT UNDER SECTION 68 OF THE INCOME TAX ACT WHICH ARE CONFIRMED BY CIT (APPEALS) I N EXPARTE ORDER. THE PENAL PROVISIONS UNDER SECTION 271AAB (1)(B) OF THE INCOME TAX ACT ARE NOT ATTRACTED IN RESPECT OF THE ADDITIONS ARE BEING MAD E UNDER SECTION 68 OF THE INCOME TAX ACT, THE PENALTY IMPOSED BY THE AO, ENHANC ED BY THE CIT (APPEALS) IS AGAINST THE PROVISIONS OF SECTION 271AAB(1)(B)/2 71AAB(1)(C) OF INCOME TAX ACT, SAME ARE LIABLE TO BE CANCELLED. 4. THAT WHILE ENHANCING THE PENALTY, THE CIT (APPEALS ) HAS NOT ALLOWED THE PROPER OPPORTUNITY TO THE APPELLANT FOR FILING OF H IS EXPLANATION, THE PENALTY ENHANCED WITHOUT PROVIDING OF PROPER OPPORTUNITY IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE, PARTICULARLY WHEN THE APPEAL IN RE SPECT OF QUANTUM IS PENDING BEFORE HON'BLE ITAT, PENALTY IMPOSED BY AO AND ENHA NCED BY THE CIT (APPEALS) IS LIABLE TO BE CANCELLED. 5. THAT THE APPELLATE ORDER DATED 15.02.2017 IS BAD IN LAW, LIABLE TO BE SET ASIDE. 2. THE LD. CIT(A) VIDE ORDER DATED 15.02.2017 HAD C ONFIRMED THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER. WHILE CONFIRMING T HE PENALTY ORDERS, THE LD. CIT(A) IN PARAGRAPH NO. 4.1 HAD RECORDED HIS FINDINGS TO T HE FOLLOWING EFFECT : 4.1 I HAVE CAREFULLY GONE THROUGH THE PENALTY ORDER IN THE ABOVE CASES. IT IS SEEN THAT THE AO HAS IMPOSED PENALTY @ 20% OF UNDISCLOSE D INCOME U/S 271AAB OF THE ACT. FURTHER, IT IS ALSO NOTICED THAT THE PENAL TY HAS BEEN IMPOSED ON UNDISCLOSED AMOUNT WHICH REPRESENTS THE UNDISCLOSED INCOME ON WHICH ADDITION HAS BEEN MADE IN THE ASSESSMENT U/S 153A/143(3). HERE, IT IS RELEVANT TO REPRODUCE SUB SECTION 1(B) OF SECTION 271 AAB; [TYPE THE DOCUMENT TITLE] 3 (B) A SUM COMPUTED AT THE RATE OF TWENTY PERCENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSE SSEE- (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UND ER SUB-SECTION (4) OF SECTION 132 DOES NOT ADMIT THE UNDISCLOSED INCOME; AND (II) ON OR BEFORE THE SPECIFIED DATE- (A) DECLARES SUCH INCOME IN THE RETURN OF INCOME F URNISHED FOR THE SPECIFIED PREVIOUS YEAR; AND (B) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY , IN RESPECT OF THE UNDISCLOSED INCOME. FROM THESE PROVISIONS, IT IS CLEAR THAT THE PENALTY WILL BE IMPOSED UNDER THIS SUB- SECTION ONLY, IF THE CASE IS NOT COVERED BY SUB-SEC TION 1(A) AND 1(C) OF THE SECTION 271AAB. MOREOVER, IT IS ALSO NECESSARY THAT THE APPELLANT H AS NOT DISCLOSED WHOLE OF THE AMOUNT (UNDISCLOSED INCOME) IN RESPONSE TO NOTICE U /S 153A. IT IS EVIDENT BY FACT THAT THE AO HAS MADE ADDITION OF UNDISCLOSED INCOME . IN THE PRESENT CASE, IT IS SEEN THAT THE APPELLANT HAS NOT DISCLOSED WHOLE OF THE AMOUNT IN THE RETURN FILED IN RESPONSE TO THE NOTIC E U/S 153A/143(3). MOREOVER, HE HAS ALSO NOT DISCLOSED TOTAL AMOUNT IN THE STATE MENT U/S 132(4). THUS, IT IS CLEAR THAT, ON THESE FACTS, THE CASE OF APPELLANT I S NOT COVERED BY SECTION 271 AAB (1) (A)(B). THUS, THE PROVISIONS OF SECTION 271 AAB (1)(C ) ARE CLEARLY ATTRACTED AND OPPORTUNITY WAS GIVEN TO THE APPELLANT BY ISSUING O F NOTICE FOR ENHANCEMENT ON 19/01/2017. THE DATE OF HEARING WAS FIXED FOR 30/01/ 2017. HOWEVER, NON- APPEARED AND ONLY ADJOURNMENT LETTER WAS SENT. NEXT DATE OF HEARING WAS FIXED FOR16.02.2017. NONE ATTENDED ON THIS1 DATE ALSO. THU S, IT IS CLEAR THAT APPELLANT HAS NOTHING TO SAY ON EITHER GROUNDS OF APPEAL FILE D BY HIM OR ON THE ENHANCEMENT NOTICE DATED 19/01/2017 ISSUED BY THIS OFFICE. IN VIEW OF THE ABOVE, SINCE THE PENALTY CANNOT BE I MPOSED U/S 271 AAB(1) (A)(B) AS DONE BY THE AO. PENALTY SHOULD BE IMPOSED U/S 27 1AAB (1)(C). THE MINIMUM RATE AT WHICH PENALTY SHOULD BE IMPOSED SHOULD NOT BE LESS THAN 30%. THE AO HAS ALREADY LEVIED PENALTY OF RS, 30,84,900/- FOR A .Y. 2009-10, RS 61,22,750/- FOR [TYPE THE DOCUMENT TITLE] 4 A.Y. 2010-11, RS. 71620/- FOR A.Y. 2011-12 AND RS. 30,000/- FOR A.Y. 2012-13 RESPECTIVELY. IT IS INCREASED @ 30% TO AN AMOUNT OF RS. 46,27,350 FOR A.Y. 2009- 10, RS. 91,84,125/- FOR A.Y. 2010-11, RS.1,07,430/- FOR A.Y. 2011-12, RS. 45,000/- FOR A.Y. 2012-13 RESPECTIVELY. THE APPELLANT IS DIRE CTED TO PAY THIS AMOUNT AS PENALTY. THE AO IS ALSO DIRECTED TO RECOVER THE AMOU NT AS PENALTY U/S 271 AAB (1) (C ) OF THE ACT. 3. BEFORE US, IT WAS CONTENDED BY THE LD. AR THAT F IRSTLY, THE ORDER PASSED BY THE LD. CIT CONFIRMING THE PENALTY WAS PASSED INVOKING THE RATIO OF THE DECISION IN THE MATTER OF MULTIPLAN INDIA LTD., DESERVES TO BE SET ASIDE. SECONDLY, WHEN THE QUANTUM APPEALS ARE BEING SET ASIDE BY THE TRIBUNAL, THEREF ORE, THERE IS NO ORDER IN THE EYES OF LAW. THEREFORE, IMPOSITION OF PENALTY IS NOT AVA ILABLE AND THUS, THE ORDER PASSED BY THE LD. CIT(A) IS REQUIRED TO BE SET ASIDE. 4. PER CONTRA, THE LD. DR HAD SUBMITTED THAT THE AS SESSEE IS THE HABITUAL DEFAULTER IN NOT PARTICIPATING THE PROCEEDINGS BEFORE THE LD. CIT(A). THEREFORE, STRICT VIEW SHOULD BE TAKEN AGAINST THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTI ES AND HAVE PERUSED THE RECORDS. THE TRIBUNAL VIDE SEPARATE ORDER PASSED IN QUANTUM APPEALS NOS. 35 TO 38/AGR/2017 HAS SET ASIDE THE ORDERS OF THE AUTHORI TIES BELOW IN THE QUANTUM PROCEEDINGS AND HAS REMANDED THE MATTER BACK TO THE FILE OF CIT(A) TO DECIDE THE SAME AFRESH AFTER GIVING NOTICE OF 14 DAYS TO THE A SSESSEE. SINCE THE ORDER ON [TYPE THE DOCUMENT TITLE] 5 QUANTUM OF APPEAL HAS BEEN SET ASIDE AND THE PENALT Y ORDER IS CONSEQUENCE OF THE QUANTUM PROCEEDINGS, THEREFORE, THE ORDER PASSED BY THE LD. CIT(A) CONFIRMING THE PENALTY IS ALSO LIABLE TO THE SET ASIDE AND IS SENT BACK TO THE FILE OF LD. CIT(A). AT THIS STAGE, WE WOULD LIKE TO OBSERVE THAT IF THE LD. CIT (A) IN THE QUANTUM PROCEEDINGS COMES TO THE CONCLUSION THAT NO QUANTUM ADDITION IS MADE OUT THEN THESE PENALTY PROCEEDINGS ARE LIABLE TO BE DROPPED. HOWEVER, IF T HE LD. CIT(A), AFTER EXAMINING THE RECORDS AND FURTHER AFFORDING OPPORTUNITY OF HEARIN G TO THE ASSESSEE, COMES TO THE CONCLUSION THAT ADDITIONS AS PROPOSED BY THE ASSESS ING OFFICER OR OTHERWISE ARE LIABLE TO BE MADE THEN THE LD. CIT(A) SHALL ISSUE A SEPARATE NOTICE TO THE ASSESSEE ASKING TO SHOW CAUSE AS TO WHY PENALTY BE NOT IMPOS ED ON THE ASSESSEE. NEEDLESS TO SAY THAT THE ASSESSEE SHALL COOPERATE AND PARTICIPA TE IN THE PROCEEDINGS BEFORE THE LD. CIT(A) IN THE QUANTUM PROCEEDINGS AS WELL AS IN THE PENALTY PROCEEDINGS AS AND WHEN CALLED UPON BY THE LD. CIT(A). NEEDLESS TO SAY THE ASSESSEE SHALL NOT TAKE UNDUE ADJOURNMENTS IN THE MATTER AND SHALL COOPERAT E WITH THE EARLY DISPOSAL OF APPEALS IN THE TIME LINE GRANTED BY THE LD. CIT(A). 6. IN VIEW OF THE ABOVE, ALL THE APPEALS ARE ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DR. MITHA LAL MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16.07.2019 *AKS*