Vedanta Limited (Successor to Cairn India Limited) V. Assistant Commissioner of Income-Tax Circle 26(1)

W.P.(C)/7207/2019

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The case involves Vedanta Limited, the petitioner, challenging a penalty imposed by the Assistant Commissioner of Income-Tax under Section 271(1)(c) of the Income Tax Act, 1961, for the assessment year 2014-15. The penalty was based on an assessment order dated 28 November 2018, which was later quashed by the ITAT on 04 February 2019. Despite the quashing of the assessment order, the penalty was still imposed on 31 May 2019. The petitioner sought to quash this penalty through the writ petition. The court's decision to set aside the penalty was based on the fact that it was imposed following an assessment order that no longer existed legally.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 808821 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 09-05-2024
• Assessment Year: misc
• Other Referred Cases: ITA No. 873/2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SHLOK CHANDRA; MADHAVI SHUKLA; PRIYA SARKAR; SUNDARSHAN ROY
• Assessee Lawyers: AJAY VOHRA; ADITYA VOHRA; SAMARTH CHAUDHARI
• Keywords: Assessment Year 2014-15; Mandamus; Penalty; Prohibition; Quashing; Writ of Certiorari
• Section: 271(1)(c)

Judgement Text

"$~13 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 7207/2019 VEDANTA LIMITED (SUCCESSOR TO CAIRN INDIA LIMITED ..... Petitioner Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Aditya Vohra & Mr. Samarth Chaudhari, Advs. versus ASSISTANT COMMISSIONER OF INCOME- TAX CIRCLE 26(1) ..... Respondent Through: Mr. Shlok Chandra, SSC with Ms. Madhavi Shukla, Mrs. Priya Sarkar, JSCs & Mr. Sundarshan Roy, Adv. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV % 09.05.2024 O R D E R 1. This writ petition has been preferred seeking the following reliefs: “a) Writ of certiorari, prohibition, mandamus or any other appropriate writ, direction or order quashing the impugned order dated 31.05.2019 passed by the Respondent under section 271(1)(c) of the Act in respect of assessment year 2014-15; b) A writ of and/ or order and/ or direction in the nature of prohibition commanding the Respondent to forebear from giving effect to and/ or taking any step whatsoever pursuant to and/ or furtherance of the impugned order dated 31.05.2019 passed under section 271(1)(c) of the Act for the assessment year 2014- 15; c) Direction granting ad interim stay on the operation of the impugned order and all proceedings initiated pursuant thereto, pending disposal of the present writ petition; d) Such other order or orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case; This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/05/2024 at 11:59:41 2. The solitary question which arises for our consideration is the validity of the imposition of penalty under Section 271(1)(c) of the Income Tax Act, 1961 [“Act”]. It becomes pertinent to note that the levy of penalty itself was predicated upon a final assessment which was made in the case of the writ petitioner on 28 November 2018. That order of assessment was ultimately quashed and set aside by the Income Tax Appellate Tribunal [“ITAT”] in terms of its judgment rendered on 04 February 2019. The order impugned before us undisputedly came to be passed thereafter and on 31 May 2019. 3. It is manifest that the same came to be made even when the order of assessment did not subsist. In view of the aforesaid, we find ourselves unable to sustain the order impugned in the instant writ petition. 4. We, however, note that the order of the ITAT dated 04 February 2019 presently forms subject matter of ITA No. 873/2019. In view of the aforesaid, we may only observe that in case the respondents here were to succeed in that appeal, appropriate directions with respect to whether penalty would be leviable in the facts and circumstances of the case can always be re-examined. 5. Subject to the aforesaid observation, we allow the instant writ petition and set aside the order dated 31 May 2019 passed under Section 271(1)(c) of the Act. We reserve the right of the respondents to address all submissions in ITA No. 873/2019. YASHWANT VARMA, J PURUSHAINDRA KUMAR KAURAV, J MAY 9, 2024/kk This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/05/2024 at 11:59:41 "