M/s DSC Ltd., New Delhi V. ACIT, New Delhi

ITA 4584/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2024 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 13-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V RAJ KUMAR
• Keywords: Recovery proceedings
• Section: 147

Judgement Text

ITA NO. 4584/DEL/2015 A.Y. 2006-07 DSC LTD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: A, NEW DELHI BEFORE SHRI N.K. SAINI, HONBLE VICE PRESIDENT AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 4584/DEL/2015 AY: 2006-07 DSC LTD. E-9, 3 RD FLOOR, NDSE PART-II, NEW DELHI. AAACD0003D VS . ACIT CENTRAL CIRCLE 14, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. V. RAJKUMAR, ADV. DEPARTMENT BY : SH. SRIDHAR DORA, SR. DR DATE OF HEARING : 13/11/2018 DATE OF PRONOUNCEMENT : 16/11/2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST ORDER DATED 01/06/15 PASSED BY LD. CIT (A)-XXVI, NEW DELH I FOR ASSESSMENT YEAR 2006-07 ON FOLLOWING GROUNDS OF APP EAL: 1. THAT THE LD.CIT(A) HAS ERRED BOTH IN LAW AS WELL A S ON FACTS IN SUSTAINING THE IMPOSITION OF PENALTY OF RS . 1,71,35,600/- UNDER THE PROVISIONS OF SECTION 221 O F THE INCOME TAX ACT, WITHOUT ESTABLISHING WITH SOME COGE NT EVIDENCE, THAT APPELLANT IS IN DEFAULT OR IS DEEMED TO BE IN DEFAULT IN MAKING PAYMENT OF DISPUTED DEMAND. 2. THAT THE LD. CIT(A) HAS ERRED BOTH IN LAW AS WELL A S ON FACTS IN UPHOLDING THE AOS ORDER OF IMPOSING MAXIM UM PENALTY U/S 221 OF THE INCOME TAX ACT, WITHOUT ITA NO. 4584/DEL/2015 A.Y. 2006-07 DSC LTD. 2 APPRECIATING THAT ASSESSMENT ORDER AS A RESULT OF W HICH DEMAND WAS CREATED, WAS PENDING IN APPEAL FOR ADJUDICATION BEFORE THE HIGHER APPELLATE AUTHORITY. 3. THAT THE LD.CIT(A) HAS ERRED BOTH IN LAW AND FACTS IN SUSTAINING THE IMPOSITION OF PENALTY WITHOUT APPREC IATING THE FACT THAT THE APPELLANTS RECORD WAS LYING SEIZE D WITH THE CUSTOM & EXCISE AUTHORITIES WHICH WAS BEYOND TH E CONTROL OF THE ASSESSEE COMPANY AND CIT(A) DID NOT APPRECIATE THAT THE DEMAND REMAINS DISPUTED. 4. THAT THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON F ACTS IN MIS-APPRECIATING THE FACTS OF THE CASE AND HOLDING THE STAY PETITION AS INFRUCTUOUS, WHILE DOING SO THE LD.CIT( A) HAS FAILED TO APPRECIATE THAT AO WAS AGAIN REQUESTED TO KEEP THE RECOVERY PROCEEDINGS IN ABEYANCE VIDE LETTER DA TED 08.01.2015, WHICH REMAIN UNDISPOSED OFF. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MO DIFY, OR WITHDRAW ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL AT ANY TIME ON OR BEFORE THE HEARING AS MAY BE ADVISED. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: ASSESSMENT IN THE PRESENT CASE WAS COMPLETED UNDER SECTION 147 READ WITH 143 (3) OF THE ACT, VIDE ORDER DATED 30/03/14, AT AN ASSESSED INCOME OF RS.57,19,15,422/-. THE TAX PA YABLE BY ASSESSEE ON ASSESSED INCOME WAS RS.1,71,35,600/-. IT CAME TO THE NOTICE OF LD.AO THAT ASSESSEE FAILED TO PAY DEM AND WITHIN TIME PERIOD ALLOWED IN DEMAND NOTICE, AND ASSESSEE PREFERRED APPEAL BEFORE LD.CIT (A). THE APPEAL FILED BEFORE F IRST APPELLATE AUTHORITY WAS DISMISSED, VIDE ORDER DATED 10/11/14 AND LD.AO AGAIN ISSUED NOTICE UNDER SECTION 221(1) OF THE ACT ON 15/12/14 TO PAY OUTSTANDING DEMAND ALONG WITH INTEREST. THER EAFTER, ASSESSEE VIDE LETTER DATED 08/01/15 SUBMITTED THAT, DEMAND MAY BE KEPT IN ABEYANCE TILL DISPOSAL OF APPEAL BY THIS TRIBUNAL. ITA NO. 4584/DEL/2015 A.Y. 2006-07 DSC LTD. 3 3. LD. AO AFTER CONSIDERING THE SUBMISSIONS BY REPR ESENTATIVE OF ASSESSEES LEVIED 100% PENALTY UNDER SECTION 221 (1) OF THE ACT. 4. AGGRIEVED BY ORDER OF LD. AO ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A), WHO CONFIRMED PENALTY SO LEVIED . 5. AGGRIEVED BY ORDER OF LD. CIT (A) ASSESSEE IS IN APPEAL BEFORE US NOW. 6. AT THE OUTSET, LD. COUNSEL SUBMITTED THAT QUANTU M APPEAL THAT WAS PENDING BEFORE THIS ON TRIBUNAL IN ITA NO. 146/DEL/2015 FOR RELEVANT ASSESSMENT YEAR, STANDS D ISPOSED OFF VIDE ORDER DATED 31/10/18. HE SUBMITTED THAT THIS T RIBUNAL HAS ALLOWED APPEAL FILED BY ASSESSEE AND HAS QUASHED RE ASSESSMENT PROCEEDINGS. LD. COUNSEL SUBMITTED THAT AS ASSESSM ENT PROCEEDINGS ITSELF HAS NOT BEEN UPHELD, ANY DEMAND THAT ARISES IN VIEW OF THE SAME, DOES NOT SURVIVE. HE, THUS, PR AYED FOR DELETION OF PENALTY. 7. LD.SR.DR PLACED RELIANCE UPON THE ORDERS OF AUTH ORITIES BELOW. 8. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN THE LIGHT OF RECORDS PLACED BEFORE US. 9. ADMITTEDLY, THIS TRIBUNAL VIDE ORDER DATED 31/10 /18 (SUPRA) IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR UNDER CO NSIDERATION IN QUANTUM PROCEEDINGS QUASHED AND SET-ASIDE REASSE SSMENT PROCEEDINGS. IN OUR VIEW, ON SETTING ASIDE THE ASSE SSMENT THE IMPUGNED DEMAND BECOMES NIL UNDER SUCH CIRCUMSTAN CES AND ITA NO. 4584/DEL/2015 A.Y. 2006-07 DSC LTD. 4 ANY DEMAND RAISED STANDS AUTOMATICALLY DELETED. PEN ALTY UNDER SECTION 221 IS BASED UPON DEMAND RAISED DURING ASSE SSMENT PROCEEDINGS. AS BASIS OF LEVY OF PENALTY UNDER SEC TION 221 ITSELF DOES NOT EXIST, PENALTY IS LIABLE TO BE DELETED. ACCORDINGLY WE ALLOW THE GROUNDS RAISED BY ASSESSEE . IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/11/2018 SD/- SD/- (N.K. SAINI) (BEENA A PILLAI) VICE PRESIDENT JUDICIAL MEMBER DT. 16 TH NOVEMBER, 2018 *KAVITA ARORA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA NO. 4584/DEL/2015 A.Y. 2006-07 DSC LTD. 5 DATE DRAFT DICTATED ON 14.11.18 DRAFT PLACED BEFORE AUTHOR 15.11.18/16.11.18 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 19.11.2018 KEPT FOR PRONOUNCEMENT ON & ORDER UPLOADED ON : 19.11.2018 FILE SENT TO THE BENCH CLERK 19.11.2018 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.