VIPUL MITTAL ,DELHI V. DCIT, CIRCLE-10, DELHI

ITA 1052/DEL/2025

AI Insights

The case involves an appeal by Vipul Mittal against a penalty imposed by the Deputy Commissioner of Income Tax, which was sustained by the Commissioner of Income Tax (Appeals). The penalty was levied following an assessment that included additions to the assessee's income for unexplained cash credits and commission paid. However, the ITAT had earlier quashed the assessment order due to procedural defects, specifically the lack of a jurisdictional notice under section 143(2) of the Act. This procedural error rendered the assessment and consequently the penalty, unsustainable.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 30463 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Other Referred Cases: ITA no. 2850/Del/2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANISHTHA
• Assessee Lawyers: AMIT GOEL
• Keywords: Unexplained cash credit
• Section: 143(3); 143(2); 271(1)(c); 68; 69C

Judgement Text

"1 ITA no. 1052/Del/2025 A.Y. 2014-15 Vipul Mittal v. DCIT IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘SMC’: NEW DELHI) BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT, AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No.: 1052/Del/2025 (Assessment Year: 2014-15) Vipul Mittal, 97, Chander Lok Enclave, Pitampura, Delhi-110034. v. Deputy Commissioner of Income Tax, Circle- 10, Delhi. PAN No: AAIPM 0772 B APPELLANT RESPONDENT Assesseeby : Shri Amit Goel, CA Revenue by : Shri Rajesh Kumar Dhanishtha, Sr. DR Date of Hearing :07.03.2025 Date of Pronouncement :07.03.2025 ORDER PER RAMIT KOCHAR, AM: This appeal in ITA No. 1052/Del/2025, filed by the assessee for the Assessment Year 2014-15, has arisen from the appellate order dated 29.01.2025( DIN & Order No. ITBA/NFAC/S/250/2024-25/1072666277 (1) ) passed by learned Commissioner of Income Tax (Appeals) ,NFAC, Delhi u/s 2 ITA no. 1052/Del/2025 A.Y. 2014-15 Vipul Mittal v. DCIT 250 of the Income-tax Act, 1961 (“the Act”), which appeal before learned CIT(A), National Faceless Appeal Centre (NFAC), Delhi had arisen from the penalty order dated 23.02.2022 passed by the Assessing Officer, NFAC u/s 271(1)(c) of the Act(DIN & Order No. ITBA/PNL/F/271(1)(C)/2021- 21/1040046766(1)). 2. The assessee has filed early hearing petition before the Tribunal stating that the instant appeal has arisen from the appellate order dated 29.01.2025 passed by learned CIT(A), which in turn had arisen from the penalty order dated 23.02.2022 passed by the Assessing Officer u/s 271(1)(c) of the Act wherein the ld. AO has imposed penalty of Rs. 46,63,030/- against the assessee which has been latersustained by the learned CIT(A) NFAC. It is the say of the ld. Counsel for the assessee that the quantum appeal in the case of the assessee has been decided by the Tribunal in ITA no. 2850/Del/2019 for A.Y. 2014-15 vide appellate order dated 15.01.2025 ,wherein the assessment order itself has been quashed by the Tribunal , by holding as under: “16. Further the Revenue has not brought on record an order u/s 127 of the Act passed in order to transfer the case to DCIT, Circle 11 (2), New Delhi except making the submissions that assessee should file the objection within one month u/s 124(3) of the Act. Since the issue of notice u/s 143(2) is the basis of initiation of the assessment u/s 143(3) 3 ITA no. 1052/Del/2025 A.Y. 2014-15 Vipul Mittal v. DCIT and the Jurisdictional officer should have issued the notice and also completed the assessment. The present Assessing Officer has completed the assessment without following the due process of law and we, respectfully following the decisions of the coordinate Bench and ITAT Mumbai, are inclined to hold that the jurisdictional notice u/s 143(2) was not issued by the DCIT before completing the assessment us 143(3) of the Act and that there is an unwarranted defect in this case which is not curable. Accordingly, the assessment passed in the given case is quashed and accordingly, the additional grounds raised by the assessee are allowed.” 2.1 Thus it was submitted that since the Tribunal has quashed the quantum assessment vide order dated 15.01.2025, this penalty of Rs. 46,63,030/- u/s 271(1)(c) levied by the Assessing Officer could not be sustained. It was submitted that the quantum assessment having been quashed by the Tribunal, the penalty levied by the AO could not be sustained. 2.2 This appeal is now taken up for final hearing before the Bench, with the consent of both the parties. 3. The learned Sr. DR could not controvert the factual position. 4. We have considered rival contentions and perused the material on record. We have observed that the assessment order has been framed by the AO u/s 143(3) vide order dated 28.12.2016, wherein the AO made additions 4 ITA no. 1052/Del/2025 A.Y. 2014-15 Vipul Mittal v. DCIT to the income of the assessee, firstly towards unexplained cash credits u/s 68 r.w.s. 115BBE to the tune of Rs. 1,31,00,220/- and secondly towards commission paid u/s 69C read with section 115BBE to the tune of Rs. 6,55,011/- ,aggregating to Rs. 1,37,55,231/-. The aforesaid additions as were made by the AO wereupheld by the learned CIT(A), but , however, the Tribunal vide order dated 15.01.2025 has quashed the assessment order in ITA no. 2850/Del/2019 for A.Y. 2014-15, by holding as under: “16. Further the Revenue has not brought on record an order u/s 127 of the Act passed in order to transfer the case to DCIT, Circle 11 (2), New Delhi except making the submissions that assessee should file the objection within one month u/s 124(3) of the Act. Since the issue of notice u/s 143(2) is the basis of initiation of the assessment u/s 143(3) and the Jurisdictional officer should have issued the notice and also completed the assessment. The present Assessing Officer has completed the assessment without following the due process of law and we, respectfully following the decisions of the coordinate Bench and ITAT Mumbai, are inclined to hold that the jurisdictional notice u/s 143(2) was not issued by the DCIT before completing the assessment us 143(3) of the Act and that there is an unwarranted defect in this case which is not curable. Accordingly, the assessment passed in the given case is quashed and accordingly, the additional grounds raised by the assessee are allowed.” 5 ITA no. 1052/Del/2025 A.Y. 2014-15 Vipul Mittal v. DCIT Since the quantum assessment order itself has been quashed by Tribunal vide orders dated 15.01.2025, the penalty levied by the AO of Rs.46,63,030/- u/s 271(1)(c)which was later confirmed by the ld. CIT(A) , could not be sustained and is liable to be deleted. Thus, we delete the penalty levied by the AO to the tune of Rs. 46,63,030/- u/s 271(1)(c) on the grounds that the quantum assessment itself has been quashed by the Tribunal vide order dated 15.01.2025 in ITA No. 2850/Del/2019, and hence penalty levied by the AO as sustained by ld. CIT(A) , could not be sustained. Consequently, we delete the penalty levied by the AO u/s 271(1)(c) to the tune of Rs. 46,63,030/- and the assessee’s appeal is allowed. The Order was pronounced in the open court in the presence of both the parties. We order accordingly. 5. In the result, appeal filed by the assessee in ITA no. 1052/Del/2025 for assessment year 2014-15 is allowed, as indicated above. Order pronounced in the open court on 07thMarch, 2025. Sd/- Sd/- (MAHAVIR SINGH) (RAMIT KOCHAR) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 11/03/2025. *MPV* 6 ITA no. 1052/Del/2025 A.Y. 2014-15 Vipul Mittal v. DCIT Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DRP 5. DR Asst. Registrar, ITAT, New Delhi "