OMNITEL TECHNOLOGIES PRIVATE LIMITED,GURUGRAM HARYANA V. DEPUTY COMMISSIONER OF INCOME TAX , CIRCLE -3(1), GURUGRAM, GURUGRAM HARYANA

ITA 326/DEL/2025

AI Insights

The case involves Omnitel Technologies Private Ltd., which appealed against the orders of the Learned Commissioner of Income Tax (Appeals) and the Learned Assessing Officer concerning the assessment year 2012-13. The primary issues were the reopening of the assessment under Section 148 of the Income Tax Act and the disallowance of Rs.33,56,683/- claimed as late delivery charges. The Tribunal examined whether the reopening of the assessment was justified and whether the late delivery charges should be considered as penalties or allowable business expenses. The Tribunal concluded that the reopening was not based on new material and that the late delivery charges were contractual obligations, thus not penalties.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784602 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 20-01-2025
• Other Referred Cases: Jamna Auto Industries vs. The Commissioner of Income Tax, ACIT, Range I vs. M/s Choudhary Hammer Works Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: SSANJAY KUMAR; SUAIB KHAN
• Keywords: Set aside; Difference of opinion; Change of opinion; Business expenditure; Reopening of assessment
• Section: 147; 148; 143(3); 142(1); 37

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘B’ NEW DELHI BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 326/Del/2025 Assessment Year: 2012-13 Omnitel Technologies Private Ltd., B-220, Florence Marvel, Sushant Lok-III, Sector 57, Gurugram (Haryana) PIN: 122 002 Vs. DCIT, Circle-3(1), Gurugram Haryana PAN :AAFCA2421B (Appellant) (Respondent) ORDER PER VIMAL KUMAR, JUDICIAL MEMBER: The appeal filed by the assessee is against order dated 22.11.2024 of Learned Commissioner of Income Tax (Appeals)/National Faceless Assessment Centre (NFAC), Delhi (hereinafter referred as “the Ld. CIT(A)”) under Section 250 of the Income Tax Act, 1961 (hereinafter referred as “the Act”) arising out of Order dated 15.10.2019 of the Learned Assessing Officer/Learned Deputy Assessee by S/Shri Sanjay Kumar & Suaib Khan, Advs. Department by Shri Rajesh Kumar Dhanesta, Sr. DR Date of hearing 26.08.2025 Date of pronouncement 14.11.2025 Printed from counselvise.com 2 ITA No. 326/Del/2025 Commissioner of Income Tax , Circle 3(1), Gurugram (hereinafter referred as “the Ld. AO”) under Sections 143(3)/147 Act for assessment year 2012-13. 2. Brief facts of the case are that the assessee company filed return of income on 31.01.2013 showing income of Rs. 64,14,526/-. The case was selected for scrutiny assessment under CASS and finalized under Section 143(3) of the Act on 10.03.2015 at Rs.65,96,090/-. On perusal of record, the “reasons to believe” were recorded and approval of Ld. PCIT for assessment year under Section 147 of the Act was obtained. The reasons for issue notice under Section 148 of the Act were recorded. Notice under Section 148 of the Act was issued on 30.03.2019. The assessee company filed its return of income on 01/05/2019 showing total income of Rs.64,14,525/-. Notice under Section 142(1) of the Act was issued on 17.09.2019. The assessee was provided reasons for reopening on 26.08.2019. The assessee filed objections in its reply dated 27.09.2019 which were disposed of vide order dated 03.10.2019. The assessee company filed its reply with regard to show-cause-notice on 09.10.2019. On completion of proceedings, Ld. AO made addition of Rs.33,56,683/- vide order dated 15.10.2019. 3. Against order dated 15.10.2019 of Ld. AO, appellant/assessee filed appeal before Ld. CIT(A) which was dismissed vide order dated 22.11.2024. 4. Being aggrieved, the appellant/assessee preferred present appeal with following grounds: Printed from counselvise.com 3 ITA No. 326/Del/2025 “1. Because the Ld. Commissioner of Income Tax (Appeals) has wrongly, against the Law confirmed the Reopening of Assessment u/s 148 ignoring the fact that the case was completed u/s 143(3) and there was no material information suppressed or omitted on part of the Appellant. 2. Because the Ld. Commissioner of Income Tax Appeals has wrongly, arbitrarily confirmed the disallowance of Rs. 33,56,683/- claimed as late Delivery charges by holding it as Penalty though it was not a Penalty for any legal infringement, the amount was under a contractual obligation, being compensation being paid for delayed delivery of Goods. 3. Because the Ld. Commissioner of Income Tax Appeals confirmed the additions without affording proper opportunity. 4. Because the Order is bad in the eyes of law being against the facts & law.” 5. Learned Authorized Representative for appellant/assessee submitted that Ld. CIT(A) wrongly confirmed/reopening of assessment under Section 148 of the Act by ignoring the fact that the case was completed under Section 143(3) of the Act and there was no sufficient material information found to show suppression or omission on part of appellant. Ld. CIT(A) wrongly confirmed disallowance of Rs.33,56,683/- claimed as late delivery charges by holding it as penalty, though, it was not a penalty for any legal infringement, but the amount was under a contractual obligation, being compensation paid for delayed delivery of goods. The audit balance sheet, at page 14 of paper books, mentioned late delivery charges. Mere change of opinion was no ground for reopening the assessment. Printed from counselvise.com 4 ITA No. 326/Del/2025 5.1 Reliance was placed on judgment of Hon'ble High Court of Punjab & Haryana in the case of “Jamna Auto Industries vs. The Commissioner of Income Tax dated 30.01.2008 (2008) 214 CTR (P&H) 649, (2008) 299 ITR 92 ( P& H ), (2008) 149 PKR 719. . 5.2 The Income Tax Appellate Tribunal, Delhi Benches-B, New Delhi ITA No.4332/Del/2011 A.Υ.: 2006-07 ACIT, Range I vs. M/s Choudhary Hammer Works Ltd. New Delhi PAN/GIR No: AAACC 6049C while dismissing the Appeal of the Department held \"We have heard the rival submissions and perused the material available on record. On a careful consideration of the same considering the judgements relied upon by the assesse and taken into consideration by CIT(A), and referred to before us, we are of the view that the claim of assesse has rightly been allowed by the CIT(A). There is a distinction between the penalty imposed for breach of law and the liquidated damages/compensation paid on account of late delivery. The clause pertaining to cost reduction in the eventuality of late delivery is an accepted fact and such conditions are inherent risks and incidental to the running of business. The factum of the occurrence of the event for which cost reduction has occurred has not been doubted by the A.O. The challenge posed by the department is only on the legal principle that a breach of contract of this nature is not an allowable expense. On consideration of facts and judicial principles, we are of the view that the department's ground deserves to be dismissed\" Printed from counselvise.com 5 ITA No. 326/Del/2025 6. Learned Authorized Representative for the Department submitted that the Ld. CIT(A) rightly upheld the disallowance of payment of penalty levied by National Informatics Centre. 7. From examination of record in light of aforesaid rival contentions, it is crystal clear that the assessee filed original return of income as Rs.64,14,526/- on 31.01.2013. After selection of case for scrutiny under CASS, the case was finalized under Section 143(3) of the Act on 10.03.2015 at Rs.65,96,090/-. No fresh material showing suppression or omission by the assessee was found. Ld. AO disallowed business expenses under Section 37 of the Act to the tune of Rs.33,56,683/-. The audited balance sheet on page no.14 of paper books mentions L.D. Charges as Rs.33,56,683/-. Late delivery charges were contractual charges paid for late delivery of case. 7.1 As per ratio of Jamuna Auto Industries’s (case supra), it is well settled that where such Payments/Compensation/Liquidated damages /Late Delivery Charges have been allowed which had been claimed as Business Expenses subject they are not due to any Infringement of Law. 7.2 In view of above material facts and well settled principles of law, the disallowance of Rs.33,56,683/- claimed as late delivery charges by holding penalty for legal infringement which was, in fact, payment under contractual obligation being paid for late delivery of goods was wrongly disallowed. Printed from counselvise.com 6 ITA No. 326/Del/2025 Therefore, both impugned orders being illegal are set aside. Ground of appeal nos. 1 and 2 are allowed. Ground of appeal nos. 3 and 4 are consequential. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 14th November, 2025. Sd/- Sd/- (S RIFAUR RAHMAN) ACCOUNTANT MEMBER (VIMAL KUMAR) JUDICIAL MEMBER Dated: 14 November, 2025. Mohan Lal Copy forwarded to: 1. Applicant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "