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

ITA 153/AGR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1776 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 15-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL BAJPAI
• Keywords: Set aside
• Section: 251; 263

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.153 TO 156/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 ORDER PER BENCH: THESE ARE THE APPEALS ARISING OUT OF THE ORDER PA SSED BY PR. CIT U/S. 263 OF THE IT ACT ON 21.03.2017 FOR THE ASSESSMENT YEARS 2 009-10 TO 2012-13. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 1. THAT THE PRINCIPAL COMMISSIONER OF INCOME TAX (CEN TRAL) HAS BEEN ARBITRARY AND UNJUST WHILE SETTING ASIDE THE PENALTY ORDER DA TED 24.09.2015, PASSED BY THE AO UNDER SECTION 271AAB(L)(B) OF THE INCOME TAX ACT. THE ORDER PASSED BY PCIT UNDER SECTION 263 OF INCOME TAX ACT IS AGAINST THE L AW, LIABLE TO BE SET ASIDE. 2. THAT WHILE PASSING THE ORDER UNDER SECTION 263 OF INCOME TAX ACT, THE PRINCIPAL COMMISSIONER OF INCOME TAX HAS COMPLETELY IGNORED THAT THE ORDER OF THE AO DATED 24.09.2015 IMPOSING THE PENALTY UNDER SECTION 271AAB(L)(B) IS MERGED WITH THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) DATED 15.02.2017, THUS, THE ORDER PASSED AFTER THAT UNDER SECTION 263 OF INCOME TAX DATE OF HEARING 15.07.2019 DATE OF PRONOUNCEMENT 15 .07.2019 ITA NOS. 153 TO 156/AGR/2017 2 ACT BY THE PRINCIPAL COMMISSIONER OF INCOME TAX ON 2 1.03.2017 IS OUT OF JURISDICTION, LIABLE TO BE SET ASIDE. 3. THAT THE ORDER DATED 21.03.2017 PASSED UNDER SECT ION 263 BY THE PRINCIPAL COMMISSIONER OF INCOME TAX IS BAD IN LAW, LIABLE TO BE SET ASIDE. 2. WITH RESPECT TO GROUND NO. 2, IT WAS SUBMITTED T HAT IN THE PRESENT CASE, THE ASSESSING OFFICER VIDE ORDER DATED 24.09.2015 HAD P ASSED AN ORDER IMPOSING PENALTY U/S. 271AAB(1)(B) OF THE INCOME-TAX ACT. FE ELING AGGRIEVED BY THE ORDER PASSED BY THE ASSESSING OFFICER, THE ASSESSEE HAD P REFERRED APPEAL BEFORE THE COMMISSIONER (APPEALS). THE COMMISSIONER (APPEALS) HAD DECIDED THE APPEAL AGAINST THE ASSESSEE VIDE ORDER DATED 15.02.2017. W HILE DOING SO, THE LD. CIT(A) ENHANCED THE PENALTY FROM 20% TO 30% BY INVOKING TH E PROVISIONS OF SECTION 271AAB(1)(C) OF THE ACT. THE PR. CIT WHILE EXERCISI NG POWERS U/S. 263 HAD HELD THAT THE ASSESSING OFFICER HAD WRONGLY APPLIED THE PROVI SIONS OF SECTION 271AAB(1)(B) OF THE ACT AND INSTEAD THE PROVISIONS OF SECTION 271AA B(1)(C) ARE LIABLE TO BE APPLIED. THUS, THE ORDER OF THE PR. CIT IS IN LINE WITH THE ORDER PASSED BY THE CIT(A). 3. IT WAS SUBMITTED BY THE LD. AR THAT AS THE ORDER OF THE CIT(A) DATED 15.02.2017 WAS PASSED AFTER CONSIDERING THE MATERIA L AVAILABLE ON RECORD AND ALSO IN ACCORDANCE WITH LAW, THEREFORE, SUBSEQUENT ORDER PASSED BY THE PR. CIT DATED 21.03.2017 WAS WITHOUT JURISDICTION, AS ONCE THE CI T(A) IS CEASED THE MATTER THEN IT IS NOT WITHIN THE RELEVANT JURISDICTION OF THE PR. CIT TO PASS THE ORDER WITH RESPECT TO THE SAME SUBJECT MATTER AND HENCE, ORDER U/S. 263 W AS NOT IN ACCORDANCE WITH LAW. ITA NOS. 153 TO 156/AGR/2017 3 4. PER CONTRA, THE LD. DR SUBMITTED THAT THE ORDER PASSED BY THE PR. CIT WAS IN ACCORDANCE WITH LAW AND IT WAS THE DUTY OF THE ASSE SSEE TO BRING TO THE NOTICE OF PR. CIT ABOUT THE PENDENCY OF APPEAL PROCEEDINGS. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTI ES AND PERUSED THE RECORD. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS PASSED THE ORDER ON 24.09.2015 IMPOSING PENALTY U/S. 271AAB(1)(B) OF THE ACT. AGAINST THAT ORDER, THE ASSESSEE HAD PREFERRED APPEAL BEFORE THE CIT(A) AND THE CIT(A) HAD PASSED ORDER ON 15.02.2017. FROM THE PERUSAL OF THE ORDER PASSED BY THE LD. PR. CIT DATE D 21.03.2017, MORE PARTICULARLY, PARAGRAPH NO. 5, IT IS CLEAR THAT THE PR. CIT HAD I SSUED SHOW CAUSE NOTICE ONLY ON 22.02.2017, I.E., AFTER PASSING THE ORDER BY LD. CI T(A) ON 15.02.2017. THE PR. CIT CAN EXERCISE JURISDICTION ON TWIN PRINCIPLES LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES, WHEREIN IT WAS HELD THA T THE ORDER SHOULD BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND IT W AS FURTHER HELD THAT BEFORE EXERCISING THE POWERS U/S. 263, THE PR. CIT SHOULD MAKE ENQUIRIES AND APPLY HIS MIND. ONCE, THE APPEAL ORDER HAD ALREADY BEEN PASSE D BY THE LD. CIT(A) ON 15.02.2017 HOLDING THAT THE PROVISIONS OF SECTION 2 71AAB(1)(C) OF THE ACT ARE APPLICABLE INSTEAD OF SECTION 271AAB(1)(B) OF THE A CT, IT IS EXPECTED FROM THE PR. CIT TO APPLY HIS MIND AND ALSO GO THROUGH THE ORDER PAS SED BY THE LD. CIT(A). HOWEVER, IN THE PRESENT CASE, NO SUCH EXERCISE WAS DONE. ON THIS COUNT ALONE, THE ORDER OF THE PR. CIT IS REQUIRED TO BE SET ASIDE. ITA NOS. 153 TO 156/AGR/2017 4 6. FURTHER, THERE IS ONE MORE ASPECT THAT THE ORDER OF LD. CIT(A) WAS AVAILABLE IN THE OFFICE OF PR. CIT, WHICH IS SUPPOSED TO BE LOOK ED INTO BEFORE EXERCISING THE POWERS U/S. 263 OF THE ACT. HOWEVER, THE LD. PR. CI T HAS NOT LOOKED INTO THE ORDER PASSED BY THE LD. CIT(A) AND IGNORED THE SAID ORDE R. THE IMPUGNED ORDER WAS PASSED BY THE PR. CIT U/S. 263. IN OUR VIEW THE POW ERS U/S. 263 OF THE ACT ARE REQUIRED TO BE EXERCISED DILIGENTLY AFTER APPLYING THE MIND AND LOOKING INTO THE RECORDS. IN VIEW OF THIS, THE LD. PR. CIT HAS NOT E XERCISED HIS JURISDICTION IN ACCORDANCE WITH LAW. FURTHER WE ARE OF THE ALSO OPI NION THAT THE POWERS U/S. 263 AND THE POWERS OF THE LD. CIT(A) U/S. 251 ARE OVERL APPING. ONCE THE SUBJECT MATTER OF 263 PROCEEDINGS HAD ALREADY ATTAINED FINALITY BEFOR E THE LD. CIT(A), THEN IN THAT EVENTUALITY UNLESS THERE IS ELEMENT OF FRAUD ETC., THE PR. CIT SHOULD NOT EXERCISE ITS POWERS U/S. 263 AND SHOULD ABSTAIN TO EXERCISE ITS POWERS U/S. 263 WHEN THE ORDER OF THE ASSESSING OFFICER HAS ALREADY BEEN SCRUTINIZ ED BY THE LD. CIT(A). IN THE PRESENT CASE, THE LD. PR. CIT HAS NEITHER COMPLIED WITH THE PROVISIONS OF SECTION 263 (TWIN CONDITIONS) NOR HE HAD OBSERVED THE SEPARATION OF P OWER NOR HE HAD STUCK TO THE FINALITY OF ORDER ONCE ORDER OF THE ASSESSING OFFIC ER WAS SCRUTINIZED BY THE LD. CIT(A). WE ARE OF THE FIRM OPINION THAT THE LD. CIT (A) AND CIT(ADMN.) ARE OF THE OFFICERS OF THE SAME RANK AND ARE EXERCISING THEIR POWERS, I.E., APPELLATE POWERS AND REVISIONARY POWERS. ONCE THE ORDER IS ALREADY EXAMI NED AND SCRUTINIZED BY THE LD. CIT(A) THEN THE ORDER SHOULD NOT BE EXAMINED EXCEPT WITH DUE EXCEPTION OF FRAUD ITA NOS. 153 TO 156/AGR/2017 5 ETC. BY THE PR. CIT. NO CASE IS SET UP BY THE LD. P R. CIT OF FRAUD ETC. THEREFORE, THE EXERCISE OF JURISDICTION U/S. 263 WAS WITHOUT ANY B ASIS. ACCORDINGLY, THE ORDERS PASSED U/S. 263 WERE UNCALLED FOR AND NOT IN ACCORD ANCE WITH LAW. HENCE, WE QUASH THE SAME. 7. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DR. MITHA LAL MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15.07.2019 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA