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Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI
Before: SHRI N. K. BILLAIYA & SHRI ANUBHAV SHARMA
O R D E R PER ANUBHAV SHARMA, J. M.:
1. 1. The present appeal has been preferred by the Assessee against the order dated 27.01.2020 of Ld CIT(A)-2, New Delhi (hereinafter referred as Ld. First Appellate Authority) passed u/s 250 Income Tax Act, 1961 (hereinafter referred as „the Act‟) arising out of the order dated 31.05.2018 passed u/s 271(1)(c) of the Act by the AO, Assistant Commissioner of Income Tax, Central Circle-16, New Delhi (hereinafter referred as the Ld. AO).
2. The Assessee has challenged the appellate order u/s 250 of the Act passed by the ld CIT(A)-23, New Delhi wherein, the penalty levying vide order dated 31.05.2018 passed u/s 271(1)(c) of the Act levying penalty of Rs. 24,42,275/- was upheld. 3. The Assessee has raised following grounds of appeal:- “1. That under the facts and circumstances penalty of Rs.24,42,275/- u/s.271(1)(c) is illegal and unsustainable in law as well as on facts.
2. That the assessee being searched u/s.132 on 23.09.16 when the asstt. proceedings were pending, which were initiated vide notice u/s. 143(2) Dtd. 15.07.16, hence the asstt. proceedings stood abated in view of 2nd proviso to Sec.l53A(l) of the I.T. Act, thereby making the relevant asstt. order Dtd. 14.11.17 as without jurisdiction and nonest in the eyes of the law. On the basis of such illegal and nonest asstt. order, the impugned penalty being initiated and levied vide impugned penalty order u/s. 271(l)(c) Dtd.31.05.18 is also consequentially illegal, without jurisdiction, nonest and unsustainable in law.
3. That without prejudice, the penalty notice issued being legally fatally defective therefore the impugned penalty proceedings and penalty order is also liable to be quashed.
4. That without prejudice, under the facts and circumstances of the case the penalty levied u/s. 271(l)(c) is otherwise also liable to be deleted on merits.
5. That the impugned penalty order Dtd.27.01.20, reed, on email on 28.01.20, hence the ITAT appeal was to be filed upto 28.03.20. The appeal is being filed on 07.09.2020 thus with a delay of 163 no. of days. However, there is no delay in filing the appeal in view of COVID-19 situation due to which there was a complete lockdown w.e.f. 23.03.20, consequently the date of all compliances and statutory dates stood extended in the first instance upto 30.06.20, thereafter upto 30.09.20 and as on date stands extended upto 31.03.21. Hence, there is no delay in filing the appeal which needs to be explained separately.”
Heard and perused the record. At the onset, the delay of 163 days in filing of the appeal is condoned in view of the Covid-19 situation prevailing during the period in which the appeal got barred.
The ld DR could not as such dispute certain facts with regard to sequence of events as under:-
Date Event Pg. No. 15.07.16 Initiation of regular asstt. proceedings, P-l/asstt. order/2nd prior to search, vide notice u/s.143(2) Para/filed with Form-36 23.09.16 Date of Search 7,3-4 14.11.17 Regular/relevant asst, order U/s.l43(3) P-l /asstt. order/filed with Form-36 31.05.18 Impugned penalty order u/s 271(l)(c) Demand notice issued with penalty order now filed, penalty order Pg.4 31.12.18 Asst, order U/s 153A/143(3) 5
The copy of Panchnama placed on record at page No. 3 to 4 of the paper book specifically mention that on 22.09.2016 authorisation was issued and accordingly, the search memo was prepared. Section 153A(1) when read with its second proviso provides that in case assessment is pending relating to any assessment year falling within 6 Assessment Years for which re-assessment is open in furtherance of search assessment u/s 153A, then the pending assessment stands abated. As in this case search was conducted on 23.09.2016 and the case pertain to Assessment Year 2015-16 which falls within the period of six year from the date of search and further an assessment u/s 153A read with section 143C was passed on 31.12.2018, then by all means the impugned assessment on 14.11.2018 was beyond jurisdiction and void ab initio. All though the same was not challenged by the Assessee u/s 250 of the Act, however, the assessment is void Page | 3 ab initio in regard to proceeding stands that statutorily stood abated by virtue of second proviso to section 153A(1) of the Act so consequent penalty proceeding u/s 271(1)(c) of the Act cannot be sustained.
The ground raised are accordingly sustained. The appeal is allowed. The impugned order is set aside. Order pronounced in the open court on 17/08/2022.