MOUSHUMI MISHRA GAHLOT,NEW DELHI V. ROHIT SINGH, DCIT, CENTRAL CIRCLE-4, NEW DELHI

ITA 3629/DEL/2024

AI Insights

The case involves appeals by Moushumi Mishra Gahlot against the penalty orders passed by the Assistant Commissioner of Income-tax (ACIT), Central Circle-4, Delhi, which were upheld by the Commissioner of Income-tax (Appeals)-23, New Delhi. The penalties were imposed under section 271(1)(b) of the Income-tax Act, 1961, for alleged non-compliance with notices issued under section 142(1) following a search assessment. The assessee contested the penalties, arguing that the reassessment proceedings were void and that no incriminating material was found during the search. The Tribunal found that the assessee had responded to the notices, and the penalties were based on an incorrect assumption of non-compliance.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126245 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2015-2016
• Other Referred Cases: PCIT vs Ojjus Medicare (P) Ltd and others [2024] 161 taxtnann.com 160 (Delhi), DCIT vs U K Paints (Overseas) Ltd 2023-TIOL-58-SC-IT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT KATOCH
• Assessee Lawyers: V.K. BINDAL
• Keywords: Reasonable cause; Reassessment proceedings; Initiation of penalty proceedings; Satisfaction; HRA; Commissioner; AMP; 153C; AY 2011-12
• Section: 142(1); 153C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: E : NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITAs No.3624 to 3633/Del/2024 Assessment Years: 2010-11 to 2019-20 Moushumi Mishra Gahlot, C-6/6172, Vasant Kunj, New Delhi – 110 070. PAN: AGLPG5571D Vs DCIT, Central Circle-4, New Delhi. (Appellant) (Respondent) Assessee by : Shri V.K. Bindal, CA; Shri Anmol Jha, Advocate & Ms Rinky Sharma, AR Revenue by : Shri Amit Katoch, Sr. DR Date of Hearing : 23.04.2025 Date of Pronouncement : 23.04.2025 ORDER PER BENCH These are appeals preferred by the assessee against the orders of the Ld. Commissioner of Income-tax (Appeals)-23, New Delhi (hereinafter referred to as the Ld. First Appellate Authority or ‘Ld. FAA’, for short) in appeals filed before him against the penalty orders passed by the ACIT, Central Circle-4, Delhi dated 27.07.2023 (hereinafter referred to as the Ld. AO, for short) u/s 271(1)(b) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Further details of the orders of the lower authorities are as under:- ITAs No.3624 to 3633/Del/2024 2 ITA No. & Assessment Year Appeal No. & Date of order of the CIT(A) No.3624/Del/2024, 2010-11 CIT(A), Delhi -23/10026/2009-10, dated 25.06.2024 No.3625/Del/2024, 2011-12 CIT(A), Delhi -23/10061/2010-11, dated 25.06.2024 No.3626/Del/2024, 2012-13 CIT(A), Delhi -23/10074/2011-12, dated 25.06.2024 No.3627/Del/2024, 2013-14 CIT(A), Delhi -23/10112/2012-13, dated 25.06.2024 No.3628/Del/2024, 2014-15 CIT(A), Delhi -23/10244/2013-14, dated 25.06.2024 No.3629/Del/2024, 2015-16 CIT(A), Delhi -23/10935/2014-15, dated 25.06.2024 No.3630/Del/2024, 2016-17 CIT(A), Delhi -23/10943/2015-16, dated 25.06.2024 No.3631/Del/2024, 2017-18 CIT(A), Delhi -23/10448/2016-17, dated 26.06.2024 No.3632/Del/2024, 2018-19 CIT(A), Delhi -23/10353/2017-18, dated 26.06.2024 No.3633/Del/2024, 2019-20 CIT(A), Delhi -23/10604/2018-19, dated 26.06.2024 2. These appeals were heard together as they arise out of same set of facts with regard to the background in which the assessment was initiated consequent to a search assessments and wherein notices u/s 142(1) were issued to the assessee on 13.09.2022. Allegedly, the assessee had not responded leading to the initiation of penalty proceedings u/s 271(1)(b) of the Act and the imposition of penalty of Rs.10,000/- by the AO which has been upheld by the ld.CIT(A) against which the assessee is in appeal raising the following grounds as reproduced from the appeal for AY 2011-12:- ITAs No.3624 to 3633/Del/2024 3 “1.The CIT(A) erred in law and on facts in confirming the penalty u/s 271(1)(b) of the Act by rejecting the categorical submissions of the assessee placed on record, particularly the order of the Hon’ble jurisdictional Delhi High Court in the case of PCIT vs Ojjus Medicare (P) Ltd and others [2024] 161 taxtnann.com 160 (Delhi) [DoD: 03/04/2024] holding that the impugned reassessment proceedings initiated for the AY 2011-12 were void ab initio as beyond 10 years from the date of the satisfaction note u/s 153C of the Act and that there was no failure of the assessee to submit reply though the impugned proceedings were completely illegal and void ab initio. Thus, the same should be quashed. 2. The impugned penalty order is otherwise also void ab initio and illegal because the impugned compliance desired by itself was in an illegal reassessment proceedings initiated u/s 153C of the Act, without jurisdiction and mandatory requirements as has been held in DCIT vs U K Paints (Overseas) Ltd 2023-TIOL-58-SC-IT and many others as no incriminating material for this assessment year was found in an income-tax search conducted on some other assessee. Thus, the entire proceedings were illegal and could result into any legal penalty, needs to be quashed, particularly when no additional undisclosed income was assessed in the relevant assessment order. 3. The impugned penalty imposed for non- compliance of the notice issued u/s 142(1) of the Act on 13/09/2022 on is bad in law as the relevant satisfaction note u/s 153C of the Act dated 10/06/2021 was given to the assessee later on 08/02/2023, though the assessee was specifically demanding the same since receipt of the impugned notice u/s 153C of the Act. 4 The impugned order is an example of not only blatant misuse of the process of law and adjudicating power by the AO but also unambiguously demonstrates lack of knowledge of the AO of the legal provisions of the law entrusted on him by the Legislature to be exercised judicially and not at all to harm the subject of the State recklessly. 5 The appellant craves the leave to add, substitute, modify, delete or amend all or any ground of appeal either before or at the time of hearing.” 3. On hearing both the sides, we find that although the ld. DR has supported the action of the ld. tax authorities below, however, as we go through the impugned order dated 27.07.2023 by which the penalty was imposed, the AO has mentioned that the notice u/s 142(1) of the Act was issued to the assessee on 13.09.2022 fixing ITAs No.3624 to 3633/Del/2024 4 the case for hearing on 19.09.2022 in response to which neither any submissions nor adjournment applications were filed by the assessee. 4. However, the ld. AR has brought before us by referring to the impugned order of the CIT(A) that in response to this notice dated 13.09.2022, on 15.09.2022, the assessee had made submissions which were received by the AO as there is stamp of receipt dated 15.09.2022. The CIT(A) himself reproduces this submission dated 15.09.2022 on internal pages No.5-8 of the impugned order of the CIT(A) and is available on pages No.9-11 of the paper book. 5. Quite apparently, the assessee had submitted a response wherein the assumption of jurisdiction itself was questioned and it was also alleged that no incriminating evidence/document belonging to the assessee was seized in the search. 6. It appears that this response was completely left out of consideration by the ld. AO at the time of passing the assessment order. At the same time, as we go through the assessment order dated 24.03.2023, we find that in fact, no addition on the basis of any incriminating evidence found during the search was made while the assessment was completed u/s 153C r.w.s. 144 of the Act. 7. We are accordingly satisfied that as for the purpose of section 271(1)(b) of the Act, there was no defiance and the assessee had made submissions questioning the assumption of jurisdiction, but without entertaining the submissions the ld.AO noted in the penalty order that no submissions were filed. We are of considered view that non filing of submissions in response to the notice u/s 271(1)(b) of the ITAs No.3624 to 3633/Del/2024 5 Act and not filing submissions to the satisfaction of AO are two different aspects. The assessee had raised valid grounds questioning the assumption of jurisdiction and, in fact, the assessment was completed without any addition on the basis of incriminating evidence. Thus, the penalty as imposed was not sustainable under law. The CIT(A) has, thus, failed to appreciate the facts in correct perspective and has erred in expecting a more reasonable cause for defending the notice u/s 271(1)(b) of the Act. The grounds cumulatively are sustained and the impugned penalty orders are quashed. Consequently, all the appeals of the assessee are allowed. Order pronounced in the open court on 23.04.2025. Sd/- Sd/- (S. RIFAUR RAHMAN) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 23rd April, 2025. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "