M/s Mall Hotel Ltd., New Delhi V. DCIT, New Delhi

ITA 1721/DEL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5251 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 22-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RINKU SINGH SENIOR
• Keywords: Business income; Opportunity of being heard; Principle of natural justice; Initiation of penalty proceedings; Set aside
• Section: 271(1)(c); 143(3); 250; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE HONBLE VICE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1721/DEL./2017 (ASSESSMENT YEAR : 2012-13) ITA NO.1722/DEL./2017 (ASSESSMENT YEAR : 2009-10) M/S. MALL HOTEL LIMITED, VS. DCIT, CIRCLE 16 (1), D 893, NEW FRIENDS COLONY, NEW DELHI. NEW DELHI. (PAN :AADCM3128R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANAND KUMAR PANDEY, ADVOCATE REVENUE BY : SMT. RINKU SINGH, SENIOR DR DATE OF HEARING : 20.05.2019 DATE OF ORDER : 27.05.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : SINCE COMMON QUESTIONS OF FACTS AND LAW HAVE BEEN R AISED IN BOTH THE AFORESAID APPEALS, THE SAME ARE BEING D ISPOSED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DI SCUSSION. 2. APPELLANT, M/S. MALL HOTEL LIMITED (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEALS SO UGHT TO SET ASIDE THE IMPUGNED ORDERS BOTH DATED 18.01.2017 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-6, NEW DELHI Q UA THE ITA NO.1721 & 1722/DEL/2017 2 ASSESSMENT YEARS 2009-10 & 2012-13 ON IDENTICAL GRO UNDS INTER ALIA THAT:- 1. BECAUSE THE LD. COMMISSIONER OF INCOME TAX (APP EALS), NEW DELHI HAS ERRED IN LAW AND ON FACTS, WHILE PASS ING THE ORDER U/S. 250 OF THE INCOME TAX ACT, 1961. 2. BECAUSE THE LD. COMMISSIONER OF INCOME TAX (APPE ALS), NEW DELHI HAS ERRED IN LAW AND ON FACTS, BY UPHOLDI NG THE TREATMENT OF THE RENTAL RECEIPTS AMOUNTING TO RS.4,60,42,522/- A S INCOME FROM THE HOUSE PROPERTY INSTEAD OF BUSINESS INCOME AS CLAIME D BY THE APPELLANT COMPANY. 3. BECAUSE THE LD. COMMISSIONER OF INCOME TAX (APPE ALS), NEW DELHI HAS ERRED IN LAW AND ON FACTS, BY UPHOLDI NG THE APPLICATION AND CALCULATION OF THE EXPENSES ON THE BASIS OF PRO PORTIONATE EXPENSES AGAINST THE RECEIPTS. 4. BECAUSE THE LD. COMMISSIONER OF INCOME TAX (APPE ALS), NEW DELHI HAS ERRED IN LAW AND ALL FACTS, BY UPHOLD ING THE INITIATION OF PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE I.T. ACT, 1961. 5. BECAUSE THE APPELLANT CRAVES FOR THE INDULGENCE OF THE HON'BLE COURT SO AS TO PERMIT IT TO RAISE ADDITIONA L GROUND/GROUNDS OF APPEAL AND/OR TO VERIFY OR MODIFY THE GROUNDS ALREA DY TAKEN. 6. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : FOR AY 2009-10, ASSESSMEN T WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 14 7 OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) AND FOR AY 2012-13, ASSESSMENT WAS FRAMED UNDER SECTION 143 OF THE ACT. ASSESSEE BEING INTO THE BUSINESS OF HOTEL AND CINEMA/THEATRE CLAIMED THE RENTAL INCOME UNDER THE HEAD BUSINESS INCOME. AO , DECLINING THE CONTENTIONS RAISED BY THE ASSESSEE, TREATED THE REN TAL INCOME OF RS.4,60,42,522/- AND RS.4,60,70,849/- FOR AYS 201 9-20 AND ITA NO.1721 & 1722/DEL/2017 3 2012-13 RESPECTIVELY AS INCOME FROM THE HOUSE PROPE RTY INSTEAD OF BUSINESS INCOME AS CLAIMED BY THE ASSESSEE. AO ALS O CALCULATED THE EXPENSES ON THE BASIS OF PROPORTIONATE EXPENSES INCURRED IN EARNING THE RENTAL RECEIPT AND BUSINESS RECEIPT AND THEREBY ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.1,50,40,900/ - AND RS.5,57,55,010/- FOR AYS 2009-10 AND 2012-13 RESPEC TIVELY. 4. ASSESSEE CARRIED THE MATTER BY WAY OF APPEALS BE FORE THE LD. CIT (A) WHO HAS DISMISSED THE APPEALS FOR NON-PROSE CUTION ON FAILURE OF THE ASSESSEE TO APPEAR DURING THE APPELL ATE PROCEEDINGS. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEALS. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. BARE PERUSAL OF THE IMPUGNED ORDERS PASSED BY TH E LD. CIT (A) GO TO PROVE THAT IT HAS SHOWN TO HAVE ISSUED TH E NOTICES TO THE ASSESSEE FOR HEARING ON 28.10.2016, 06.12.2009 AND 17.01.2017 BUT NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER, THE ORDER PASSED BY THE LD. CIT (A) IS SILENT IF THAT NOTICES ISSUED BY THE LD. CIT (A) WERE EVER SERVED UPON THE ASSESSEE. IT IS THE CASE OF THE ASSESSEE THAT IT HAS NEVER RECEIVED ANY SUCH NOTICE FOR HEARING. ITA NO.1721 & 1722/DEL/2017 4 7. MOREOVER THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2010-11 IN ITA NO.4887/DEL/2014 RESTORED THE IDENTICAL ISSUE TO THE FILE OF AO FOR FRESH ASSESSM ENT AFTER EXAMINING THE ISSUE ON MERITS. LD. AR FOR THE ASSE SSEE AND LD. DR FOR THE REVENUE ALSO AGREED THAT INTEREST OF JUSTIC E WOULD BE MET IF THESE APPEALS ARE REMANDED BACK TO AO FOR FRESH ASS ESSMENT. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT FIRSTLY, ADEQUATE OPPORTUNITY OF BEING HEARD IS REQUIRED TO BE PROVIDED TO THE ASSESSEE AND SECONDLY, WHEN IDENTICAL ISSUE IS PENDING CONSIDERATION WITH AO HAVING BEEN RESTORED BY THE C OORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2010-11, IT WOULD BE IN THE INTEREST OF JUSTICE TO REMAND THESE APPEALS TO THE FILE OF AO TO DECIDE AFRESH IN THE LIGHT OF THE DIR ECTIONS ISSUED BY THE COORDINATE BENCH OF THE TRIBUNAL IN AY 2010-11. CONSEQUENTLY, BOTH THE AFORESAID APPEALS FILED BY T HE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 27 TH DAY OF MAY, 2019. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) VICE PRESIDENT JUDICIAL MEMBE R DATED THE 27 TH DAY OF MAY, 2019 TS ITA NO.1721 & 1722/DEL/2017 5 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-40, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.