GHAZIABAD DEVELOPMENT AUTHORITY ,GHAZIABAD vs. DCIT, EXEMPTION CIRCLE, GHAZIABAD
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Income Tax Appellate Tribunal, DELHI “C” BENCH: NEW DELHI
Before: SHRI N.K.BILLAIYA & SHRI KUL BHARAT
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “C” BENCH: NEW DELHI
BEFORE SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER & SHRI KUL BHARAT, JUDICIAL MEMBER
ITA No.8303/Del/2018 [Assessment Year : 2008-09] Ghaziabad Development vs DCIT Exemption, Authority, C/o-RRA TAXINDIA, Circle Ghaziabad. D-28, South Extension, Part-1, New Delhi. PAN-AAALG0072C APPELLANT RESPONDENT Appellant by Dr. Rakesh Gupta, Adv. & Shri Deepash Garg, Adv. Respondent by Shri K. M. Mahesh, CIT DR Date of Hearing 21.11.2022 Date of Pronouncement 23.12.2022
ORDER PER KUL BHARAT, JM : This appeal filed by the assessee for the assessment year 2008-09 is
directed against the order of Ld. CIT(A), Ghaziabad dated 31.10.2018.
The assessee has raised following grounds of appeal:-
“That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in imposing penalty of Rs.1,53,75,79,841/- u/s 271(l)(c) and that too without assuming jurisdiction as per law and the impugned penalty order being illegal and void ab-initio and without observing the principles of natural justice. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned penalty order passed by Ld. AO u/s 271(l)(c) which is illegal for the reason that the impugned reassessment order dated 21-03-2016 is also illegal, beyond jurisdiction, void ab initio.
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That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in imposing penalty and passing the impugned penalty order and that too without recording the mandatory ‘satisfaction’ as per law and without levying a clear charge whether there was concealment of income or furnishing of inaccurate particulars and without the valid approval of Ld. 4. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in imposing penalty u/s 271(1 )(c), is bad in law and against the facts and circumstances of the case and not sustainable on various legal and factual grounds. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in imposing penalty u/s 271(l)(c) on the assessed income and that too without allowing the benefit of exemption u/s 11 and 12, despite the fact that assessee was granted the registration u/s 12A w.e.f. 01-04-2002. 6. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.” BRIEF FACTS OF THE CASE
Facts giving rise to the present appeal are that in this case, originally
assessment was framed u/s 143(3) of the Income Tax Act, 1961 (“the Act”) on
28.03.2018. The Assessing Officer (“AO”) made additions in respect of excess
income on expenditure of Rs Rs.4,48,12,14,793/- disallowance on account of
payment of compensation of Rs.3,49,09,341/- disallowance of audit expenses
of Rs.75,00,000/-. On this, the AO initiated penalty proceedings and
subsequently, imposed penalty of Rs.1,53,75,79,841/-.
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Aggrieved against this, the assessee preferred appeal before Ld.CIT(A),
who after considering the submissions, dismissed the appeal of the assessee.
Aggrieved against the order of Ld.CIT(A), the assessee preferred appeal
before this Tribunal.
At the outset, Ld. Counsel for the assessee, Shri Rakesh Gupta
vehemently argued that Ld.CIT(A) was not justified in sustaining the penalty.
He further contended that in view of decision of the Tribunal in quantum
proceedings in ITA No.1830/Del/2017, the impugned penalty deserves to be
deleted. He drew our attention to the relevant finding of the Co-ordinate bench
in quantum proceedings.
On the other hand, Ld. CIT DR opposed the submissions and supported
the orders of the authorities below.
We have heard Ld. Authorized Representatives of the parties and perused
the material available on record. The AO had levied penalty on three items I.e.
related to excess of income over expenditure, disallowance on account of
payment of compensation and disallowance on account of audit expenses.
Apropos to these items, the finding of Co-ordinate Bench in quantum
proceedings in ITA No.1830/Del/2017 is as under:-
“The assessee has also challenged the denial of benefit of section 11 contending that the AO has applied the amended provisions of section 2(15) which are applicable from A.Y . 2009-10 onwards. It was argued that the assessee has not been given benefit of provisions of section 11(2) inspite of appellant having filed Form 10 regarding accumulation of income in stipulated time. Examinations of facts reveal that the assessee has filed return o f income on
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27.06 .2009. The return of income was due on 30.09 .2008. The audit in this case has been completed on 27.06.2009 i.e. beyond the due date of filing of return . The revenue held that merely filing of certificate as Form 10 does not entitle appellant to get the benefit of section 11(2). For getting benefit u/s 11 the appellant has to have valid registration u/s 12A and should have applied the income derived under property held under trust wholly for the charitable purpose. The appellant has claimed that AO should have allowed the benefit of section 11. The examination of facts reveals that initially appellant got registration u/s 12A w.e .f. 31 .03 .2003 which has been revoked later . However, during appellate proceedings, the assessee claimed vide letter dt. 23.12 .2016 that ITAT New Delhi vide its order dated 20.09.2016 in ITA No. 455/Del/2016 directed CIT(Exemption) to grant benefit o f registration u/s 12AA w.e .f. 01.04.2001. 10. Again , the ld . CIT, Ghaziabad vide order u/s 12AA(3) dated 31.03.2014 cancelled the registration of the appellant w.e .f . 01.04.2009 on account of change of definition of charitable purpose u/s 2(15). The order of the ld . CIT(E) was annulled by the order of the ITAT vide order dated 29.04.2019 in ITA No . 2400/Del/2014, considering the fact that the assessee is engaged in development o f land End in accordance to the Uttar Pradesh Urban Development Act 1973. As per section 7 of the above said Act the object of authority is to promote and secure the development of the area according to the plan and for that purpose authority shall have power to acquire, hold, manage and dispose of land and other property to carry out building , engineering, mining and other operations to execute works in connection with the supply of water and electricity to dispose of sewage and to provide and maintain other services and amenities and generally to do anything necessary and expedient for the purpose of such development and for purposes me dental thereto. Provided that save as provided in this act nothing contained in this act shall be construed as authorizing the disregard by the authority
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of any law for the time being in force. Thus the above said act authorizes the appellant to undertake any activity to fulfill the main object of development of land in the specified area. 11. Since, the assessee is found to be eligible for exemption u/s 11 for all the years pre and post A .Y. 2008-09, by the orders of the Tribunal, we hold that action o f the Assessing Officer denying the exemption u/s 11 cannot be supported. 12. With regard to the disallowance of Rs. 3,49,09,341/- on account of compensation paid through Court order and disallowance of Rs.75,00,000/- on account of audit fee which are the repeated additions from the order u/s 143(3) dated 31.12.2010, we hold that the same continue to remain as matter of adjudication in the original order passed u/s 143(3) and hence not being dealt in this order. Since, the matter has been adjudicated on merits of the issue in favour of the assessee, any adjudication the issue of reopening rised at ground no . 1 , 2 & 4 becomes academic in nature and hence not resorted to.”
In the light of above finding of Co-ordinate Bench in quantum
proceedings (supra), the impugned penalty cannot be sustained and therefore,
the AO is hereby directed to delete the impugned penalty. Thus, grounds
raised by the assessee are allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open Court on 23rd December, 2022.
Sd/- Sd/-
(N.K.BILLAIYA) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER
* Amit Kumar *
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