Surinder Bajaj , Delhi V. ITO, Ward- 40(1), New Delhi

ITA 800/DEL/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9646 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 01-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 246; 271(1)(c); 143(3); 246A

Judgement Text

1 ITA no. 800/Del/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No. 800/DEL/2018 [Assessment Year: 2009-10 Surinder Bajaj, H.No. B-36, Maharana Pratap Enclave, Pitampura, New Delhi-110034. PAN- ADKPB5492Q Vs Income-tax Officer, Ward-40(1), New Delhi APPELLANT RESPONDENT Assessee represented by None Department represented by Shri Mrinal Kumar Das, Sr. DR Date of hearing 22.09.2022 Date of pronouncement 29.09.2022 O R D E R PER KUL BHARAT, JM: This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-15, New Delhi, dated 29.12.2017, pertaining to the assessment year 2009-10. The assessee has raised following grounds of appeal: “In view of the facts and under the circumstances of the case and in law, whether the learned CIT(A)-15, New Delhi was justified in confirming the action of levying penalty u/s. 271 (l)(c) of the Act, despite the facts: - Quantum appeal is pending before the superior authority; 2 ITA no. 800/Del/2018 - Order imposing penalty u/s. 271(l)(c) of the Act, dated 24.03.2015 is beyond the period of limitation as provided under the provision of sec. 275(l)(a) of the Act. The appellant craves his right to add, amend, modify and or withdraw any or all the grounds of appeal either before or during the course of hearing of appeal” 2. At the time of hearing no one attended the proceedings. It is transpired from the records that despite various opportunities, there is no representation on behalf of the assessee. Therefore, the appeal is taken up for hearing and is being disposed of on the basis of material available on record. 3. The facts giving rise to present appeal are that in this case the assessment u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”) was completed vide order dated 05.12.2011. Thereby the Assessing Officer (the AO) assessed income at Rs. 21,20,200/- against the returned income of Rs. 1,60,197/-. The AO also initiated penalty proceedings u/s 271(1)(c) of the Act, which culminated into imposition of the impugned penalty. Aggrieved by the order of imposition of penalty the assessee preferred appeal before the learned CIT(Appeals), who sustained the penalty. Now the assessee is in appeal before this Tribunal. 4. Learned Sr. DR supported the orders of authorities below and submitted that there is no infirmity into the orders of lower authorities. 5. I have heard the learned DR and perused the material available on record. It is noticed that the assessee vide submissions dated 29.11.2017 has taken an objection regarding limitation. For the sake of clarity the objection of the assessee is reproduced as under: “The captioned appeal arises out of order u/s 271(l)(c)of the Income tax Act, 1961, (for brevity “the Act”) for the A.Y. 2009-10 passed by the 3 ITA no. 800/Del/2018 learned Income Tax Officer, Ward 40(1), New Delhi, (for brevity “the AO”) vide his order dated 24.03.2015, levying penalty of Rs. 10,02,520/- u/s. 271(l)(c) of the Income tax Act, 1961 against which the appellant (for brevity “the Assessee”) is in appeal before your honour for seeking justice and cancellation of penalty. STATEMENT OF FACTS The assessee being an individual, filed his return of income for the assessment year under reference, declaring total income of Rs.1,60,197/-. Assessment thereof was completed u/s. 143(3) of the Act at the total income of Rs. 21,20,200/-, thereby, making addition of Rs. 19,60,000/-. In quantum appeal before the Hon’ble CIT(A)-18, New Delhi, the assessed income was enhanced to Rs.32,79,200/-, thereby making further addition of Rs. 11,59,000/-. The assessee has filed second appeal before the Hon’ble ITAT, New Delhi on 03.03.2014 vide appeal no. 1182/Del/2014 in G-Bench of the Hon’ble ITAT at New Delhi. The said quantum appeal is presently fixed before Hon’ble ITAT, G- Bench, New Delhi on 13.12.2017. The AO levied penalty u/s. 271(1)(c) of the Act of Rs. 10,02,520/- merely on the ground of addition of Rs. 31.19 Lakhs, deposited by the assessee in cash into his savings bank accounts in ICICI Bank and HDFC Bank during the financial year relevant to A.Y. 2009-10. It was explained to the AO that quantum appeal against which penalty u/s. 271(l)(c) of the Act has been levied is pending before the Hon'ble ITAT, G- Bench, New Delhi. As per the provision of sec. 275(1)(a) of the Act, no order imposing a penalty shall be passed in a case where relevant assessment is under appeal before the ITAT after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed or six months from the end of the month in which the appeal order is received, whichever period expires later. Date of order u/s. 143(3) of the Act- 05.12.2011 Date of order u/s. 250(6) of CIT(A)-18, New Delhi - 15.01.2014 Date of order u/s. 271 (1)(c) of the Act - 24.03.2015 4 ITA no. 800/Del/2018 SUBMISSIONS It is respectfully submitted as under: 1) As submitted hereinabove, the assessment, against which penalty u/s. 271(l)(c) of the Act has been levied, completed u/s. 143(3) of the Act on 05.12.2011. 2) Appeal decided by the Hon’ble CIT(A)-18, New Delhi on 15.01.2014. 3) The quantum appeal filed before Hon’ble ITAT, G-Bench, New Delhi vide Appeal No.l182/Del/2014 is pending and presently fixed for hearing on 13.12.2017. A. It is respectfully further submitted that impugned order of penalty u/s. 271(l)(c) of the Act has been passed on 24.03.2015 inter-alia beyond the expiry of the financial year in which the proceedings in course of which action for the imposition of penalty has been initiated or six months from the end of the month in which the order of CIT(A) has been passed (Date of CIT(A) Order - 15.01.2014). B. There is a blanket bar of limitation for imposing penalties u/s. 275(1) (a) of the Act which reads as under: Bar of limitation for imposing penalties. 275. (1) No order imposing a penalty under this Chapter shall be passed— (a) in a case where the relevant assessment or other order is the subject- matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A or an appeal to the Appellate Tribunal under section 253, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or]Commissioner, whichever period expires later : Provided that in a case where the relevant assessment or other order is the subject-matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A, and the Commissioner (Appeals) passes the order on or after the 1st day of June, 2003 disposing of such appeal, an order 5 ITA no. 800/Del/2018 imposing penalty shall be passed before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or within one year from the end of the financial year in which the order of the Commissioner (Appeals) is received by the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner, whichever is later; C. In view of the proviso as per sec. 275(1)(a) of the Act, it is crystal clear that any order imposing penalty cannot be passed if the appeal against basic order of assessment is pending. In the instant case, the basic order of assessment based on which penalty u/s. 271(l)(c) of the Act has been levied is pending before Hon’ble ITAT, G-Bench, New Delhi and presently fixed for hearing on 13.12.2017. D. Reliance is also placed upon the latest judgment of Bombay High Court in the case of R.B. Shriram Durga Prasad vs. CIT (2016) 287 CTR (Bom.) 228 held – The language of s. 275(1)(a) clearly shows that the order imposing penalty cannot be passed if the appeal against basic order of assessment is pending before the competent superior authority. Here, on 24 th Feb., 1972 though first appellate authority had disposed off the appeal, further appeal of assessee before the Tribunal was very much pending. The order imposing penalty, therefore, appears to be premature and, therefore, illegal and without jurisdiction. The notices for initiation of those proceedings are dt.12' 1 ' Jan, 1972, 3 rd Feb., 1972 and 27 th Sept., 1972 i.e. during the pendency of appeal before the Tribunal. Essential ingredients of s. 275(1) are clearly not in contemplation of notice issuing authority on these dates. The form or language of these notices shows clear non-- application of mind in this respect. It is obvious that such notices initiating the penalty proceedings could not have been issued before 26 th March, 1974. The order of the IAC imposing the penalty on the assessee was illegal and without jurisdiction. In view of the submissions hereinabove and in the facts and circumstances of the case, you will please appreciate that primarily it is premature and invalid to levy the penalty of Rs.10,02,520/- u/s. 271(1 )(c) of the Act for the reason of limitation of sec.275(1)(a) of the Act, especially under the circumstances, the AO has lawful jurisdiction to levy the penalty u/s. 271 (1) (c) of the Act, once the quantum appeal pending before the ITAT is decided. It is prayed that the penalty may please be cancelled.” 6 ITA no. 800/Del/2018 6. The above objection of the assessee is not adverted by the learned CIT(Appeals). Therefore, the impugned order is set aside and the appeal is restored to the file of learned CIT(Appeals) to decide it afresh considering the issue of limitation as raised by the assessee. 7. Appeal of the assessee is allowed for statistical purposes. Order pronounced in open court on 29 th September, 2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI