MD METRO TRANSIT PVT LTD,NEW DELHI vs. ITO WARD - 16(4), NEW DELHI

ORDER PER ANADEE NATH MISSHRA, AM: (A) Assessment order dated 27/12/2016 was passed by the Assessing Officer (“AO”, for short) wherein the assessee’s income was assessed at Rs.96,35,040/- as against returned income of and 1582 /Del/2020 MD Metro Transit Pvt. Ltd. vs. ITO Rs.27,89,360/-. The aforesaid assessment order was passed ex- parte qua the assessee. The assessee’s appeal against the aforesaid assessment order was dismissed by Ld. CIT(A) vide impugned appellate order dated 29/11/2019. The Ld. CIT(A) dismissed assesse’s appeal in limine without going into merits. The Ld. CIT(A) observed that the appeal filed by the assessee was late; she decided against condoning the delay in filing of the appeal u/s 249(3) of Income Tax Act, and dismissed the appeal in limine on limitation ground. The present appeal before us vide ITA No.1581/Del/2020 is filed by the assessee against the aforesaid impugned appellate order dated 29/11/2019 of the Ld. CIT(A).

(A.1) Separately, proceedings were also initiated by the AO, under section 271(1)(c) of Income Tax Act for levy of penalty. Vide order dated 28/06/2017, the AO levied penalty amounting to Rs.21,12,981/- under section 271(1)(c) of Income Tax Act. The assessee’s appeal against the aforesaid order dated 28/06/2017 was also dismissed by the Ld. CIT(A) in limine vide impugned appellate order dated 22/02/2029 without going into the merits; observing that the assessee was not interested in pursuing the and 1582 /Del/2020 MD Metro Transit Pvt. Ltd. vs. ITO appeal. The present appeal before us vide has been filed by the assessee against the aforesaid impugned appellate order dated 22/02/2019 of the Ld. CIT(A).

(A.2) For the sake of convenience, both the present appeals before us vide and are hereby disposed off through this common and consolidated order.

(B) At the time of hearing before us, the Ld. Authorized Representative (“Ld. AR” for short) for the assessee submitted before us that the aforesaid assessment order dated 27/12/2016 was not served on the assessee; because of the fact that the assessment order was sent by the Assessing Officer by post on wrong address. He further submitted that the assessee obtained certified copy of the assessment order in order to file appeal in the office of the Ld. CIT(A). He furthermore submitted that the appeal filed by the assessee in the office of the Ld. CIT(A) was within the time prescribed u/s 249(2) of Income Tax Act having regard to the date on which certified copy of the assessment order was provided by the Assessing Officer to the assessee, if the date of service of the Page 3 of 7 and 1582 /Del/2020 MD Metro Transit Pvt. Ltd. vs. ITO assessment order is reckoned to be the same as the date on which the certified copy of the assessment order was provided by the Assessing Officer. He also submitted that having regard to section 250(6) of Income Tax Act, the Ld. CIT(A) erred in dismissing the assessee’s appeals vide impugned appellate orders dated 29/11/2019 and 22/02/2019 in limine, without going into merits.

For this purpose, he specifically drew our attention to provisions u/s 250(6) of Income Tax Act wherein the Ld. CIT(A) is required to pass the appellate orders in writing stating the point for determination, the decision thereon and the reason for the decision. Therefore, he contended, the aforesaid appellate orders dated 29/11/2019 and 22/02/2019 were inconsistent with section 250(6) of Income Tax Act as the Ld. CIT(A) did not pass impugned appellate orders on merits through speaking orders. He submitted that impugned appellate orders 29/11/2019 and 22/02/2019 should be set aside and the AO should be directed to pass fresh assessment order in accordance with law, after providing reasonable opportunity to the assessee. The ld. Sr. DR for Revenue did not dispute the submissions and the contentions made on behalf of the assessee by the Ld. Senior AR for assessee. He agreed Page 4 of 7 and 1582 /Del/2020 MD Metro Transit Pvt. Ltd. vs. ITO with the assessee’s submissions that the impugned appellate orders dated 29/11/2019 and 22/02/2019 of the Ld. CIT(A) should be set aside and the AO should be directed to pass fresh assessment order in accordance with law, after providing reasonable opportunity to the assessee.

(C) In view of the foregoing; and as representatives of both sides are in agreement with this, and in the specific facts and circumstances of these present appeals before us, we hereby set aside the impugned appellate order dated 29/11/2019 of the Ld. CIT(A); and we direct the Assessing Officer to pass a denovo assessment order in accordance with law after providing reasonable opportunity to the assessee. Thus, issues in dispute in appeal before us vide having regard to quantum additions made in the assessment order are restored back to the file of the Assessing Officer with the direction to pass a denovo assessment order in accordance with law after providing reasonable opportunity to the assessee.

(C.1) Vide foregoing paragraph (C) of this order, we have restored the issues in dispute having regard to quantum additions Page 5 of 7 and 1582 /Del/2020 MD Metro Transit Pvt. Ltd. vs. ITO made in the assessment order back to the file of the Assessing Officer with the direction to pass a denovo assessment order in accordance with law after providing reasonable opportunity to the assessee. Accordingly, the quantum additions do not survive at present. Consequently, penalty levied under section 271(1)(c) of Income Tax Act also do not survive at present. In the fitness of things, we set aside the impugned appellate order dated 22/02/2019 of Ld. CIT(A) and cancel the penalty levied under section 271(1)(c) of Income Tax Act.

(C.2) However, by way of abundant caution, we hereby clarify that the Assessing Officer will be at liberty to initiate penalty proceedings u/s 271(1)(c) of Income Tax Act in accordance with the applicable law and the relevant facts and circumstances, if deemed fit, after consequential denovo assessment proceedings are taken up in pursuance of the aforesaid directions in foregoing paragraph (D) of this order.

(D) For statistical purposes, appeal vide is treated as partly allowed and appeal vide is treated as allowed. and 1582 /Del/2020 MD Metro Transit Pvt. Ltd. vs. ITO (E) This order was already pronounced on 07/02/2023 in Open Court, in the presence of representatives of both sides, after conclusion of the hearing and is signed today on 07/02/2023.