DLF Commercial Enterprises, New Delhi V. ACIT, Circle- 52(1), New Delhi

ITA 2530/DEL/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1714 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 11-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 143(3); 142(1); 143(2); 144

Judgement Text

FIT FOR PUBLICATION (AS) (ANM) JM AM IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: B: NEW DELHI) (THROUGH VIDEO CONFERENCING) BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 2530/DEL/2018 ( ASSESSMENT YEAR: 2014-15) DLF COMMERCIAL ENTERPRISES 4 TH FLOOR, GOPAL DASS BHAWAN, 28 BARAKHAMBA ROAD, NEW DELHI-110001 VS. ASSISTANT COMM. OF INCOME TAX, CIRCLE-52(1), NEW DELHI APPELLANT RESPONDENT PAN NO: AA DFD0811B REVENUE BY : SH. AVIKAL MANU, SR. DR ASSESSEE BY : SH. SATYAJEET GOEL, CA PER ANADEE NATH MISSHRA, A.M.: THIS APPEAL BY ASSESSEE IS FILED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-18, NEW DELHI, [LD. CIT(A), FOR SHO RT], DATED 01.03.2018 FOR ASSESSMENT YEAR 2014-15. GROUNDS TAKEN IN THIS APP EAL OF ASSESSEE ARE AS UNDER: 1. THAT THE IMPUGNED ORDER DATED 01.03.2018 PASSED U/S 271(1)(B) BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) 18, NEW DELHI IS BAD IN LAW AND WRONG ON FACTS. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-18 ERR ED IN LAW IN UPHOLDING THE PENALTY OF 10,000 LEVIED BY THE LD . ASSESSING ITA NO.-2530/DEL/201 8 DLF COMMERCIAL EN TERPRISES PAGE 2 OF 7 OFFICER UNDER SECTION 271(1)(B) OF THE ACT, FOR THE REASONS STATED IN THE IMPUGNED ORDER. 3. THAT THE APPELLANT, CRAVES, LEAVE TO ADD, ALTER, AMEND, SUBSTITUTE, FORGO, ANY OR ALL THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. (B) RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 26.0 7.2014 WHICH WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) OF IT ACT WAS ISSUED TO THE ASSESSEE. THEREAFTER STATUTORY NOTICE U/S 142(1) OF INCOME TAX ACT ALONG WITH QUES TIONNAIRE WAS ISSUED BY THE ASSESSING OFFICER ON 06.04.2016 CALLING FOR RELEVANT DETAILS AND DOCUMENTS. ASSESSMENT ORDER U/S 143(3) OF INCOME TAX ACT WAS PASSED ON 05.12.2016 W HEREIN RETURN OF INCOME OF RS.22,99,79,160/- WAS ACCEPTED WITHOUT ANY ADDITION BEFORE THE AFORESAID REGULAR ASSESSMENT ORDER U/S 143(3) OF ITR DATED 05.12.2016 . PRIOR TO THAT, AN ORDER DATED 26.10.2016 WAS PASSED BY THE ASSESSING OFFICER U/S 271(1)(B) OF INCOME TAX ACT, DIRECTING THE ASSESSEE TO PAY PENALTY AMOUNTING TO RS. 10,000/- ON THE GROUND THAT THE ASSESSEE HAD FAILED TO PROVIDE FULL SUBMISSIONS WHI CH WERE CALLED FOR ON HEARING FIXED ON 01.09.2016 IN THE COURSE OF THE ASSESSMENT PROCEEDI NGS; AND THAT ON THE SAID DATE (01.09.2016) NONE APPEARED OR MADE ANY SUBMISSIONS . THE ASSESSEE FILED APPEAL AGAINST THE AFORESAID ORDER DATED 26.10.2016 BEFORE THE LD. CIT(A) BY IMPUGNED APPELLATE ORDER DATED 01.03.2018 OF THE LD. CIT(A). THE AFORESAID P ENALTY AMOUNTING TO RS. 10,000/- LEVIED U/S 271(1)(B) OF INCOME TAX ACT WAS CONFIRME D. FOR EASE OF REFERENCE THE RELEVANT PORTIONS OF AFORESAID ORDERS DATED 05.12.2016, AND 01.03.2018 ARE REPRODUCED BELOW :- RELEVANT PORTION OF ORDER DATED 05.12.2016 OF ASSE SSING OFFICER 2. IN COMPLIANCE TO THE NOTICES, SH. GAURAV JINDA L, CA & AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED FOR AN ON BEHALF ITA NO.-2530/DEL/201 8 DLF COMMERCIAL EN TERPRISES PAGE 3 OF 7 OF THE ASSESSEE FROM TIME TO TIME AND FURNISHED WRI TTEN SUBMISSIONS AND REQUIRED DETAILS CALLED FOR. THESE WERE EXAMINE D AND CASE WAS DISCUSSED WITH THE AUTHORIZED REPRESENTATIVE. 3. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN T HE BUSINESS OF REAL ESTATE DEVELOPMENT, SETTING UP COMMERCIAL COMPL EXES FOR SALE OR LETTING OUT AND EARNING RENTAL INCOME THERE FROM OR FOR RUNNING BUSINESS/CONVENTION CENTERS OR DEALING IN SHARES AN D SECURITIES AND OTHER MOVABLE OR IMMOVABLE ASSETS. DURING THE RELEV ANT YEAR, ASSESSEE HAS RETURNED INCOME UNDER THE HEAD HOUSE P ROPERTY, CAPITAL GAIN AND OTHER SOURCES. 4. AFTER EXAMINATION OF DETAILS SUBMITTED BY THE AS SESSEE AND DISCUSSIONS HELD WITH THE AR OF THE ASSESSEE, THE I NCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION IS ASSESS ED AT RS. 22,99,79,160/-. RELEVANT PORTION OF ORDER 01.03.2018 OF LD. CIT(A) 4. THE BRIEF FACTS OF THE CASE ARE THAT DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE AO ISSUED NOTICE U/S 14 2(1) OF THE ACT ON 06.04.20L6 AND THE APPELLANT WAS REQUIRED TO FIL E THE DETAILS ASKED BY THE AO AT THE TIME OF HEARING FIXED FOR 19.04.20 16. THE APPELLANT SOUGHT VARIOUS ADJOURNMENTS WHICH WAS GRANTED BY TH E AO AND FINALLY THE HEARING WAS ADJOURNED TO 01.09.2016. HO WEVER, THERE WAS NO RESPONSE FROM THE APPELLANT. THE AO ISSUED A REM INDER LETTER ON 12.09.2016 AND FINALLY A SHOW CAUSE NOTICE U/S 271( .L)(B) WAS ISSUED BY THE AO ON 20.09.2016 FOR NON-COMPLIANCE OF THE N OTICE ISSUED. IN RESPONSE TO THE SHOW CAUSE NOTICE ALSO, THE APPELLA NT SOUGHT ADJOURNMENT AND FINALLY DID NOT IILE ANY REPLY WITH RESPECT TO THE NON- COMPLIANCE TO THE NOTICE ISSUED BY THE AO. IN VIEW OF THIS, THE AO HAS LEVIED PENALTY OFRS. 10,000/- U/S 271 (1)(B) OF THE ACT. 4.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AR HAS CONTENDED THAT THE APPELLANT HAD FILED VARIOUS DETA ILS TO THE AO AND THE FINAL ASSESSMENT ORDER WAS PASSED U/S 143(3) OF THE ACT, HOWEVER, THE AR HAS FAILED TO EXPLAIN THE REASON FO R NON-COMPLIANCE OF THE NOTICE ISSUED BY THE AO AND ALSO WHY NO RESP ONSE WAS GIVEN TO THE SHOW CAUSE NOTICE ISSUED BY THE AO U/S 271(L )(B) OF THE ACT. IN MY VIEW, IT IS A CLEAR CASE OF NON-COMPLIANCE OF THE NOTICE ISSUED BY THE AO AND THE APPELLANT HAS FAILED TO PROVIDE A NY REASONABLE CAUSE FOR SUCH NON-COMPLIANCE. IT IS ALSO TO BE KEP T IN MIND THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AND IT IS IRRELEVANT THAT THE FINAL ASSESSMENT ORDER WAS P ASSED U/S I -43(3) OF THE ACT. IN VIEW OF THESE FACTS, 1 AM OF THE OPI NION THAT THE APPELLANT HAS FAILED TO COMPLY WITH THE NOTICE ISSU ED BY THE AO WITHOUT ANY REASONABLE CAUSE AND THEREFORE, THE PEN ALTY LEVIED BY THE AO U/S 271(L)(B) OF THE ACT IS CONFIRMED AND TH E GROUNDS OF ITA NO.-2530/DEL/201 8 DLF COMMERCIAL EN TERPRISES PAGE 4 OF 7 APPEAL ARE DISMISSED. (C) THE PRESENT APPEAL BEFORE US HAS BEEN FILED BY THE ASSESSEE AGAINST THE AFORESAID IMPUGNED APPELLATE ORDER DATED 01.03.2018 OF THE LD . CIT(A). AT THE TIME OF HEARING, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMI TTED THAT THE ASSESSMENT ORDER DATED 03.12.2016 WHICH WAS PASSED BY THE ASSESSING OFFICE R WAS A REGULAR ASSESSMENT ORDER U/S 143(3) OF INCOME TAX ACT, AND NOT A BEST JUDGME NT ASSESSMENT U/S 144 OF INCOME TAX ACT. HE CONTENDED THAT THIS (THE FACT THAT BEST JUDGMENT ASSESSMENT U/S 144 OF IT ACT WAS NOT PASSED) IMPLIES THAT THE SUBSEQUENT COMPLIA NCE MADE BY THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS [AFTER LEVY OF PENALTY U/S 2 71(1)(B) OF INCOME TAX ACT] WAS CONSIDERED AS GOOD COMPLIANCE BY THE ASSESSING OFFI CER AND THAT THE DEFAULTS EARLIER COMMITTED SHOULD BE TREATED AS HAVING BEEN IGNORED BY THE ASSESSING OFFICER. FOR THIS CONTENTION HE RELIED ON ORDERS OF CO-ORDINATE BENCH OF ITAT DELHI IN THE CASES OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ACIT 5 DTR 429 (DELHI TRIBUNAL), GLOBUS INFOCOM LIMITED VS. DCIT (ORDER DATED 29.06. 2016 IN ITA NO. 738/DEL./2014 FOR AY 2010-11), CARREEN BUILDERS & DEVELOPERS VS. DCIT (ORDER DATED 20.09.2017 IN ITA NO. 5737/DEL/2015 FOR FOR AY 2012-13). IN THESE ORDERS, IT WAS HELD BY CO-ORDINATE BENCHES OF ITAT, DELHI THAT WHEN THE ORDER IS FINALLY PASSE D U/S 143(3) OF IT ACT AND NOT U/S 144 OF IT ACT; IT WOULD MEAN THAT SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPLIANCE AND THE DEFAULTS COMM ITTED EARLIER WERE IGNORED BY THE ASSESSING OFFICER. FOR THE EASE OF REFERENCE, RELEV ANT PORTION FROM ORDER IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUS T VS. ACIT (SUPRA) IS REPRODUCED AS UNDER :- ITA NO.-2530/DEL/201 8 DLF COMMERCIAL EN TERPRISES PAGE 5 OF 7 '2.4 COMING TO THE ISSUE OF RECORDING OF SATISFACTI ON, IT MAY BE MENTIONED THAT MERE INITIATION OF PENALTY DOES NOT AMOUNT TO SATISFACTION AS HELD BY HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RAM COMMERCIAL ENTERPRISES LTD . (2001) 167 CTR (DEL) 321 : (2000) 246 ITR 568 (DEL). IN ABSENCE OF RECORDING OF THE S ATISFACTION IN THE ASSESSMENT ORDER, MERE INITIATION OF PENALTY WILL N OT CONFER JURISDICTION ON THE AO TO LEVY THE PENALTY. 2.5 WE ALSO FIND THAT FINALLY THE ORDER WAS PASSED UNDER S. 143(3) AND NOT UNDER S. 144 OF THE ACT. THIS MEANS THAT SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD C OMPLIANCE AND THE DEFAULTS COMMITTED EARLIER WERE IGNORED BY THE AO. THEREFORE, IN SUCH CIRCUMSTANCES, THERE COULD HAVE BEEN NO REASON TO C OME TO THE CONCLUSION THAT THE DEFAULT WAS WILLFUL .' (C.1) SIMILAR VIEW WAS TAKEN BY CO-ORDINATE BE NCHES OF ITAT DELHI IN THE AFORESAID CASES OF GLOBUS INFOCOM LIMITED (SUPRA) AND CARREEN BUILDERS & DEVELOPERS PVT. LTD.(SUPRA). (C.2) THE LEARNED DEPARTMENTAL REPRESENTATIVE RE LIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE LD. CIT(A). (D) WE FIND ON PERUSAL OF THE ASSESSMENT ORDER THAT IN PARAGRAPH 2 OF THE ASSESSMENT ORDER, THAT THE ASSESSING OFFICER HAS EXPRESSED S ATISFACTION WITH THE COMPLIANCES MADE BY THE ASSESSEE. TO QUOTE FROM THE ASSESSMENT ORDER , THE OBSERVATION OF THE ASSESSING OFFICER IS: IN COMPLIANCE TO THE NOTICES, SH. GAU RAV JINDAL, CA & AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED FOR AND ON BEHALF OF THE ASSESSEE FROM TIME TO TIME AND FURNISHED WRITTEN SUBMISSIONS AND DETAILS CALLED FOR. THESE WERE EXAMINED AND THE CASE WAS DISCUSSED WITH THE AUTHORIZED REPRESEN TATIVE. IT CAN BE READILY INFERRED FROM THIS OBSERVATION OF THE ASSESSING OFFICER THAT THE ASSESSING OFFICER WAS, ON THE WHOLE, SATISFIED WITH THE OVERALL COMPLIANCES MADE BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE SATISFACTION OF THE ASSESSING OFFI CER WITH THE COMPLIANCES MADE BY THE ITA NO.-2530/DEL/201 8 DLF COMMERCIAL EN TERPRISES PAGE 6 OF 7 ASSESSEE IS ALSO EVIDENCED BY THE FACT THAT NO ADDI TION WAS MADE BY THE ASSESSING OFFICER, AND THE RETURNED INCOME WAS ACCEPTED IN THE ORDER P ASSED U/S 143(3) IT ACT. WE ARE OF THE VIEW THAT PENALTY LEVIED BY THE ASSESSING OFFIC ER U/S 271(1)(B) OF THE IT ACT DESERVES TO BE CANCELLED IF THERE ARE MATERIALS TO SUGGEST ON CONCLUSION OF THE PROCEEDINGS BEFORE THE ASSESSING OFFICER; THAT THE ASSESSING OFFICER WAS, ON THE WHOLE, SATISFIED WITH THE OVERALL COMPLIANCE S MADE BY THE ASSESSEE DURING PROCEEDINGS BEFORE THE ASSESSING OFFICER. (E) IN VIEW OF FOREGOING, AND IN THE FACTS AND CIRCU MSTANCES OF THE PRESENT APPEAL BEFORE US, WE HEREBY CANCEL THE PENALTY AMOUNTING T O RS. 10,000/- LEVIED BY THE ASSESSING OFFICER U/S 271(1)(B) OF INCOME TAX ACT. (G) IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. THIS ORDER WAS ALREADY PRONOUNCED ON 16 TH FEBRUARY, 2021 IN OPEN COURT, IN THE PRESENCE OF REPRESENTATIVES OF BOTH SIDES; AFTE R CONCLUSION OF THE HEARING. SD/- SD/- (AMIT SHUKLA) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTA NT MEMBER DATED: 18/02/2021 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5.DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI