Unitech Reality Pvt. Ltd., New Delhi V. DCIT, Circle-27(1), New Delhi

ITA 2910/DEL/2019

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1358 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-06-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 03-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Set aside
• Section: 271(1)(c); 250

Judgement Text

1 ITA no. 2910/Del/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No. 2910/DEL/2019 [Assessment Year: 2011-12 Unitech Reality Pvt. Ltd., Basement, 6, Community Centre, Saket, New Delhi-110017. PAN- AAACR 4290 E Vs DCIT, Circle-27(1), New Delhi. APPELLANT RESPONDENT Assessee represented by Shri D.C. Garg, CA Department represented by Shri Dayainder Singh Sindhu, CIT(DR) Date of hearing 12.06.2024 Date of pronouncement 28.06.2024 O R D E R PER KUL BHARAT, JM: This appeal, preferred by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-28, New Delhi, dated 25.01.2019, in sustaining the penalty of 18,80,120/- levied by the Assessing Officer u/s 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as the “Act), pertaining to the assessment year 2011-12. The assessee has raised following grounds of appeal: “1. The order passed by the Learned Commissioner of Income Tax (Appeals)-28 ("Ld. CIT(A)") under Section 250 of the Act is bad in law and on the facts and circumstances of the case. 2 ITA no. 2910/Del/2019 2. The Ld. CIT(A) has erred in law and on the facts and circumstances of the case in upholding the order passed by the Ld. Assessing Officer ("Ld. AO") thereby levying penalty of Rs. 18,80,120 u/s 271(1)(c) of the Act. 3. The Ld. CIT(A) has erred in law and on the facts and circumstances of the case in upholding the order passed by the Ld. AO thereby holding that the appellant has furnished inaccurate particulars of income without appreciating that the appellant had fully reported and disclosed all particulars of the income on bonafide and reasonable belief. 4. The order passed by the Ld. CIT(A) upholding the order passed by the Ld. AO levying penalty is not sustainable in law as the same has been passed merely by relying upon the reasoning contained in the quantum orders. The order levying penalty is bad in law as the same has been passed in contravention of the well settled principles of law that penalty proceedings and the quantum proceedings are different and independent proceedings and hence the Ld. AO was bound to give independent reasoning why levy of penalty was warranted in the particular set of facts. 5. The order passed by the Ld. CIT(A) upholding the order passed by the Ld. AO levying penalty is bad in law and liable to be set aside as the notice issued under section 271(1)(c) was ambiguous as it did not specify the offence alleged to be committed. The order levying penalty is not sustainable in law as it violates the principles of natural justice as the appellant was not provided a fair opportunity to defend its case. 6. Without prejudice, the penalty order passed by the Ld. AO and upheld by the Ld. CIT(A) is unsustainable on the facts and circumstances of the respective merits of the quantum issues /additions in the assessment order / appellate order. 7. The order passed by the Ld. CIT(A) is bad in law and liable to be set aside as the same has been passed without appreciating the facts and circumstances of the case and has been passed mechanically without application of mind. The Ld. CIT(A) has chosen to pass the impugned order in utter ignorance of the submissions made by the appellant. 8. The order passed by the Ld. CIT(A) is bad in law and liable to be set aside as the same has been passed by incorrect application of law and judicial precedents. The impugned order has been passed by the Ld. CIT(A) in utter ignorance of the principles of judicial discipline. 3 ITA no. 2910/Del/2019 9. The above grounds of appeals are independent and without prejudice to one another. 10. The appellant may be allowed to add/withdraw or amend any ground of appeal at the time of hearing.” 2. The sole effective ground raised by the assessee is against sustenance of penalty amounting to Rs. 18,80,120/- levied by the AO u/s 271(1)(c) of the Act. 3. Facts, in brief, are that for A.Y. 2011-12 the assessee filed its return declaring income of Rs. 41,12,96,510/-. The AO completed the assessment u/s 143(3) of the Act at Rs. 57,28,82,830/-. In respect of the additions made in the assessment order the AO also initiated penalty proceedings u/s 271(1)(c) of the Act for furnishing of inaccurate particulars of income and vide penalty order dated 28.03.2018 the AO levied a penalty of Rs. 18,80,120/- for furnishing of inaccurate particulars of income @ 100% of the tax sought to be evaded. Against it the assessee preferred appeal before the learned CIT(A) who affirmed the penalty levied by the AO. Aggrieved against it, now the assessee is in appeal before this Tribunal. 4. At the outset, learned counsel for the assessee submitted that in quantum against the order of learned CIT(A) there were cross appeals preferred by the assessee as well as the Revenue. The assessee’s appeal being ITA no. 3970/Del/2016 has been allowed by the ITAT Delhi Bench ‘G’ vide order dated 31.08.2020 and has deleted the disallowance of Rs. 60,84,530/- being expenses pertaining to Uniworld Garden-1 project. The Revenue’s appeal being ITA no. 4253/Del/2016 has been dismissed by the ITAT Delhi Bench ‘G’ vide order dated 29.07.2019. Learned counsel submitted that since the additions made by the AO have been deleted in quantum appeal, the penalty proceedings u/s 271(1)(c) cannot survive and the impugned penalty levied by the AO may be deleted. 4 ITA no. 2910/Del/2019 5. Learned DR was fair enough to admit the aforesaid factual position. He, however, submitted that the Department has not given up its stand. 6. In view of the above admitted factual position, since the additions made by the AO have been deleted in quantum proceedings, the very base for initiation of penalty proceedings u/s 271(1)(c) of the Act, has gone. Therefore, the impugned penalty levied u/s 271(1)(c) of the Act has no legs to stand in the eye of law and the same is hereby deleted. Grounds are allowed. 7. Appeal of the assessee is allowed. Order pronounced in open court on 28.06.2024. Sd/- Sd/- (BRAJESH KUMAR SINGH) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI