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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Principal Commissioner of Income Tax-1 – Appellant
Versus
M/s Ansal Properties And Infrastructure – Respondent
ITA 393 of 2023
Decided On : 24-07-2023
Delay Condonation - Income Tax Appeal - Section 271(1)(c) of the Income Tax Act, 1961 - The court discussed the delay condonation application and the appeal concerning Assessment Year 2011-12. The key legal provisions discussed were Section 271(1)(c) of the Income Tax Act, 1961 and the interpretation of the penalty provisions. The court emphasized the need for clarity in penalty notices and the debatable nature of the issue at the relevant time.
Fact of the Case:
The appellant/revenue sought condonation of delay in re-filing the appeal concerning Assessment Year 2011-12. The respondent/assessee had challenged the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961.
Finding of the Court:
The court found that the penalty notice did not clearly indicate the basis for initiating penalty proceedings, and the issue was debatable at the relevant time. The court upheld the decisions of the CIT(A) and the Tribunal, dismissing the appeal.
Issues: Delay condonation, challenge to penalty under Section 271(1)(c) of the Income Tax Act, 1961
Ratio Decidendi: The penalty notice must clearly indicate the basis for initiating penalty proceedings, and the debatable nature of the issue at the relevant time can influence the imposition of penalties.
Final Decision: The appeal was dismissed as no substantial question of law arose for consideration.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral)
CM Appl.37018/2023[Application filed on behalf of the appellant/revenue seeking condonation of delay of 320 days in re-filing the appeal]
1. This is an application moved on behalf of the appellant/revenue, seeking condonation of delay in re-filing the appeal.
2. According to the appellant/revenue, the delay involved is 320 days.
3. Mr Tapas Ram Misra, who appears on behalf of the respondent/assessee, says that he has no objection to the prayer made in the application being allowed.
4. It is ordered accordingly. The delay is condoned.
5. The application is disposed of in the aforesaid terms.
ITA 393/2023
6. This appeal concerns Assessment Year (AY) 2011-12.
7. The appellant/revenue has challenged the order dated 22.02.2022 passed by the Income Tax Appellate Tribunal [in short, "Act"].
8. Before the Tribunal, the appellant/revenue had assailed the order of the Commissioner of Income Tax (Appeals) [in short, "CIT(A)"] dated 16.05.2017.
8.1. The appellant/revenue appealed to the Tribunal against the aforementioned order of the CIT(A), whereby penalty amounting to Rs.1,71,40,000/-, imposed by the Assessing Officer (AO), under Section 271(1)(c) of the Income Tax Act, 1961 [in short, "Act"] was deleted. [See page 21 of the case file].
9. Before we proceed further, the following broad facts are required to be noticed:
10. The respondent/assessee filed the Return of Income (ROI) on 30.09.2011. In the ROI, the respondent/assessee had declared its income amounting to Rs.1,20,19,74,162/-.
10.1. It appears that the respondent/assessee had filed a revised return, whereby, the total taxable income was pegged at Rs.1,19,91,36,679/-.
10.2. Evidently, the respondent/assessee was subjected to scrutiny assessment. Pursuant to the assessment, the respondent/assessee's income was assessed at Rs.1,25,87,20,383/-.
10.3. Significantly, two additions were made to the revised ROI of the respondent/assessee:
(i) First, with regard to the Annual Letting Value (ALV) of the vacant commercial/self-occupied assets. In this behalf, the addition was crystallized at Rs.5,90,67,704/-.
(ii) Second, on account of the disallowance of amortized cost of land concerning wind power projects. In this behalf, the addition was quantified at Rs.5,16,000/-.
11. To be noted, these additions were challenged by the respondent/assessee before CIT(A). CIT(A) vide order dated 27.11.2014 directed deletion of addition made on account of disallowance of amortized cost of land concerning wind power projects.
11.1. Insofar as the addition on account of the ALV of vacant commercial/self-occupied assets is concerned, the CIT(A) upheld the addition.
12. On account of this, penalty proceedings were separately initiated against the respondent/assessee.
12.1. The notice which was issued to the respondent/assessee did not specify, as to whether penalty proceedings was being initiated on account of furnishing inaccurate particulars of income or concealing particulars of income.
13. That said, the penalty order was passed by the AO on 28.03.2016. As indicated above, penalty amounting to Rs.1,71,40,000/- was imposed on the respondent/assessee via the aforementioned order.
14. This led the respondent/assessee to approach CIT(A), once again, by preferring an appeal against the order levying penalty.
15. Before CIT(A), it was contended that the CIT(A), in the years preceding the AY in issue, had deleted the addition on account of the ALV, which was also confirmed by the Tribunal.
15.1. It was the assertion of the respondent/assessee before the CIT(A) that the reversal of this trend only occurred after this court rendered a judgment on 31.10.2012 in the matter of CIT vs. Ansal Housing Finance & Leasing Co. Ltd. [2013] 354 ITR 180 (Del.).
15.2. In other words, the argument was that since it was a debatable issue, and, hence, the plausible view, penalty could not have been levied under Section 271(1)(c) of t
Clarity in penalty notices and the debatable nature of issues at the relevant time can influence the imposition of penalties.
Penalty under Section 271(1)(c) of the Income-tax Act, 1961 cannot be levied if the assessee did not furnish inaccurate particulars or conceal income. No substantial question of law arises if the Tri....
The main legal point established in the judgment is the necessity for the assessing officer to clearly specify whether penalty is being levied for concealment of income or for furnishing inaccurate p....
The court's decision was based on the absence of a substantial question of law for consideration in the appeal.
The court has the discretion to condone delay in re-filing appeals and may rely on previous decisions to close appeals.
The principle of condonation of delay and the requirement for a substantial question of law to arise for consideration in an appeal.
The court's decision was based on the lack of substantial question of law arising for consideration and the coverage of the issue by a previous court decision.
The liability to pay interest under Section 220(2) of the Income Tax Act, 1961 arises only with respect to the amount specified in the notice of demand issued under Section 156 of the Act, which was ....
The court's decision emphasized that no substantial question of law arose for consideration, leading to the dismissal of the appeals.
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