M/s. Shree Kaila Devi Real Estate Ltd., New Delhi V. DCIT, New Delhi

ITA 2131/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1997 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2003-2004
• Appeal Filed On: 10-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Opportunity of being heard; Tax effect
• Section: 143(3); 263

Judgement Text

1 ITA NOS. 2131 & 2132/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEM BER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NOS. 2131/DEL/2015 & 2132/DEL/ 2015 ( A.Y 2003-04) SHREE KAILA DEVI REAL ESTATE LTD. 12, RING ROAD, LAJPAT NAGAR-IV NEW DELHI AAGCS7321D (APPELLANT) VS DCIT CENTRAL CIRCLE-07 ARA CENTRE, JHANDEWALAN EXTN. NEW DELHI (RESPONDENT) APPELLANT BY SH. SUDESH GARG RESPONDENT BY SH. S. S. RANA, CIT DR 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 D ELHI 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 DEL AY. 2. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN D ENYING SUBSTANTIVE JUSTICE TO THE APPELLANT BY DISMISSING THE APPEAL O F THE APPELLANT ON DATE OF HEARING 05.09.2018 DATE OF PRONOUNCEMENT 07.09.2018 2 ITA NOS. 2131 & 2132/DEL/2015 GROUND OF DELAY IN FILING OF APPEAL. THE APPELLANT CRAVES FOR LIBERTY TO ADD FRESH GROU ND(S) OF APPEAL AND ALSO TO AMEND, ALTER, MODIFY ANY OF THE GROUNDS OF APPEAL. ITA NO. 2132/DEL/2015 1. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DI SMISSING THE APPEAL OF THE APPELLANT AGAINST IMPOSITION OF PENALTY UNDE R SECTION 271(1 )(C) OF THE INCOME TAX ACT. 1961. 2. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN D ENYING 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 U PHOLDING THE PENALTY ORDER WITHOUT LOOKING AT THE MERIT OF THE ADDITIONS MADE ESPECIALLY IN VIEW OF THE FACT THAT THE APPEAL ON QUANTUM ADDITIO N WAS DISMISSED ONLY ON ACCOUNT OF DELAY IN FILING OF APPEAL. 4. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN S UMMARILY DISMISSING THE DETAILED SUBMISSION OF THE APPELLANT WITHOUT AS CRIBING 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 STIP ULATED 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 ASS ESSING OFFICER. AS REGARDS ITA NO. 2132/DEL/2015, THE SAME IS IN RESPE CT OF PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 3 ITA NOS. 2131 & 2132/DEL/2015 4. THE LD. AR SUBMITTED THAT ORDER U/S 263 DA TED 23/3/2012 WAS SUBJECT MATTER OF APPEAL BEFORE THE TRIBUNAL AND THE TRIBUN AL VIDE ITS ORDER DATED 30/5/2016 WHILE QUASHING THE ORDER U/S 263 OF THE A CT HELD AS UNDER:- 15. IN THE INSTANT APPEAL BEFORE US, THE AO HAS C ONDUCTED AN ENQUIRY. HOWEVER, HE HAS NOT LAUNCHED A LENGTHY DISCUSSION O N 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 BEC AUSE ACCORDING TO HIM THE ORDER SHOULD HAVE BEEN MORE ELABORATELY. THIS S ECTION DOES NOT VISUALIZE A CASE OF SUBSTITUTION OF THE JUDGMENT OF THE COMMISS IONER FOR THAT OF THE AO. THEREFORE, IT CANNOT BE HELD IN THE INSTANT CASE TH E AOS ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE WITH IN THE TERMS OF SECTION 263 OF THE ACT. ONCE THE ISSUE OF SHARE CAPITAL WAS CONSID ERED AND EXAMINED BY THE ASSESSING OFFICER, LD. COMMISSIONER CANNOT SET ASID E THE ORDER WITHOUT RECORDING CONTRARY FINDING. THIS WILL BE CONTRARY T O SECTION 263 OF THE ACT. THEREFORE, IN VIEW OF THE FACTUAL MATRIX OF THE CAS E 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 QU ASHED BY THE TRIBUNAL, THEREFORE, THE ASSESSMENT AND PENALTY PROCEEDINGS S TARTED CONSEQUENT TO THAT ORDER, DOES NOT SURVIVE. THE ORDER OF THE TRIBUNAL , HOWEVER, WAS SUBJECT MATTER OF APPEAL BEFORE THE HONBLE ALLAHABAD HIGH COURT AND ORDER HAS BEEN PASSED BY THE HON'BLE HIGH COURT DISMISSING THE APP EAL ON THE GROUND OF TERRITORIAL JURISDICTION WITH THE PERMISSION TO FIL E APPEAL BEFORE THE HON'BLE HIGH COURT. 6. THE LD. AR SUBMITTED THAT THE DEPARTME NT HAS YET NOT FILED ANY APPEAL BEFORE THE HONBLE DELHI HIGH COURT. THE LD . AR FURTHER SUBMITTED THAT AS PER THEIR UNDERSTANDING DEPARTMENT MAY NOT FILE FRESH APPEAL BEFORE THE HONBLE DELHI HIGH COURT AS THE TAX EFFECT OF THE C ORRESPONDING 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. 4 ITA NOS. 2131 & 2132/DEL/2015 7. THE LD. DR SUBMITTED THAT THE DEPARTME NT HAS BEEN GIVEN LIBERTY TO FILE APPEAL BEFORE THE HONBLE DELHI HIGH COURT. T HEREFORE, THESE APPEALS MAY BE ADJOURNED. 8. WE HAVE HEARD BOTH THE PARTIES AND PER USED 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 TRIBUN AL VIDE ORDER DATED 30/5/2016. THESE TWO APPEALS ARE PASSED IN CONSEQU ENCE TO THE ORDER U/S 263 WHICH IS NOW QUASHED. THEREFORE, THESE TWO APP EALS DOES NOT SURVIVE. THERE IS NO APPEAL PENDING IN HONBLE 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 07 TH SEPTEMBER, 2018 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER 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 DICTATING MEMBER 06.09.2018 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. PS/PS 7 .09.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 7 . 09.2018 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