ACIT, CIRCLE- 27(1), NEW DELHI vs. UNITECH LTD., NEW DELHI

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ITA 8913/DEL/2019Status: DisposedITAT Delhi26 December 2022AY 2007-085 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the Commissioner (Appeals)'s decision to delete the penalties. Since the additions that formed the basis for the penalty proceedings were already deleted by the Tribunal, the penalty could not survive.

What were the facts?

The Revenue appealed against the deletion of penalties imposed under Section 271(1)(c) for AY 2007-08 and 2013-14. The penalties were based on additions made during assessment, which were later deleted by the Tribunal in quantum appeals.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the additions leading to the penalty have been deleted by the Tribunal in quantum appeals.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 139(1),Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘H’ NEW DELHI

Before: SHRI SAKTIJIT DEY & SHRI PRADIP KUMAR KEDIA

Hearing: 26.12.2022Pronounced: 26.12.2022

PER SAKTIJIT DEY, JM:

1.

Captioned appeals by the Revenue are against two separate orders of learned first appellate authority deleting the penalty imposed under section 271(1)(c) of the Income-tax Act, 1961 (for short ‘the Act’) pertaining to assessment years 2007-08 and 2013- 14.

2.

When the appeals were called for hearing none appeared on behalf of the assessee. Even, there is no application seeking adjournment. Considering the fact that the assessee has failed to avail multiple opportunities of hearing, we proceed to dispose of the appeals ex-parte qua the assessee after hearing learned Departmental Representative and based on the materials available on record.

3.

Briefly the facts are, the assessee, a resident corporate entity, is stated to be engaged in the business of construction and development of real estate projects. For both the assessment years under dispute, the assessee had filed its return of income voluntarily under section 139(1) of the Act. For the assessment year 2007-08, the assessee offered income of Rs.1218,53,37,410/-. Subsequently, the assessment was reopened under section 147 of the Act and completed vide order dated 30.03.2015 determining the total income at Rs.1234,95,60,960/-. The variation in total income was due to the following additions:

i Capital gains treated as Business Rs.153,98,17,883 Income ii Loan from BUUIPL Treated as Deemed Rs.11,07,40,708 Dividend iii Notional Interest disallowance on Share Rs.1,85,35,549 2 | P a g e

Application Money iv Notional Interest disallowance on Rs.2,13,38,368 Unsecured Loans Total Rs.169,04,32,508

4.

Similarly, for assessment year 2013-14, the assessee declared income of Rs.236,66,03,027/-. Whereas, while completing assessment under section 143(3) of the Act, the Assessing Officer determined the total income at Rs. 401,61,03,311/-. The variation in total income was due to the following additions:

i Notional Interest on Share Application Rs.19,76,99,227 Money ii Notional Interest on Unsecured Loans Rs.115,09,67,769 iii Rental Income treated as business income Rs.4,56,54,716 iv Advertising & Promotional expenses Rs.52,06,423 v Prior Period Expenses Rs.5,62,317 vi Expenses u/s 14A Rs.24,06,00,155 vii Late Deposit of PF employee contribution Rs.4,85,65,343 Less: Depreciation on Rented Properties Rs.77,97,364 Total Business Income Rs.168,14,58,586

5.

Based on all the additions made in assessment years 2007- 08, couple of additions, viz., Rs.19,76,99,227/- and Rs.115,09,67,769/- in assessment year 2013-14, the Assessing Officer initiated proceedings for imposition of penalty under section 271(1)(c) of the Act and ultimately pass orders imposing penalty under the said provision.

6.

Against the penalty orders so passed, the assessee preferred appeals before learned Commissioner (Appeals). While deciding the appeals, learned Commissioner (Appeals) having found that the additions subjected to the imposition of penalty under section 271(1)(c) of the Act were deleted by the Tribunal while deciding quantum appeals of the assessee, deleted the penalty imposed under section 271(1)(c) of the Act, in both the assessment years under dispute.

7.

Before us, learned CIT(DR) fairly agreed with the factual finding of learned Commissioner (Appeals) that additions giving rise to the penalty imposed under section 271(1)(c) of the Act have been deleted by the Tribunal. Thus, from the facts on record, it is evident, the additions giving rise to the penalty proceeding under section 271(1)(c) of the Act are not in existence in view of the order dated 24.07.2019 passed by the Tribunal in and Ors. That being the undisputed factual position emerging on record, the penalty imposed under section 271(1)(c) of the Act cannot survive. Accordingly, we uphold the decision of learned Commissioner (Appeals) in deleting the penalty imposed in both the assessment years under dispute.

Grounds are dismissed. 4 | P a g e

8.

In the result, both the appeals are dismissed.

Order pronounced in the open court on 26th December, 2022

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