NALANDA BUILDERS &DVELOPERS I P LTD,AGRA vs. DCIT CENTRAL CIRCLE, AGRA

In the Income-Tax Appellate Tribunal, Agra Bench, Agra

Before : Shri Laliet Kumar, Judicial Member And Dr. Mitha Lal Meena, Accountant Member

ITA Nos.153 to 156/Agr/2017 Assessment Years: 2009-10 to 2012-13

Nalanda Builders & Developers (I) vs. DCIT, Central Circle, Ltd, first Floor, Shanti Mall, Church Agra Road, Agra. PAN –AACCN2200J (Appellant) (Respondent)

Appellant by S/Sh. Rajendra Sharma, Manuj Sharma, Advocates Respondent by Sh. Sunil Bajpai, CIT/DR

Date of Hearing 15.07.2019 Date of Pronouncement 15.07.2019

ORDER Per Bench: These are the appeals arising out of the order passed by Pr. CIT u/s. 263 of

the IT Act on 21.03.2017 for the assessment years 2009-10 to 2012-13. The

assessee has raised the following grounds :

ITA Nos. 153 to 156/Agr/2017 2

act by the Principal Commissioner of Income Tax on 21.03.2017 is out of jurisdiction, liable to be set aside.

Assessing Officer vide order dated 24.09.2015 had passed an order imposing

penalty u/s. 271AAB(1)(b) of the Income-tax Act. Feeling aggrieved by the order

passed by the Assessing Officer, the assessee had preferred appeal before the

Commissioner (Appeals). The Commissioner (Appeals) had decided the appeal

against the assessee vide order dated 15.02.2017. While doing so, the ld. CIT(A)

enhanced the penalty from 20% to 30% by invoking the provisions of section

271AAB(1)(c) of the Act. The Pr. CIT while exercising powers u/s. 263 had held that

the Assessing Officer had wrongly applied the provisions of section 271AAB(1)(b) of

the Act and instead the provisions of section 271AAB(1)(c) are liable to be applied.

Thus, the order of the Pr. CIT is in line with the order passed by the CIT(A).

15.02.2017 was passed after considering the material available on record and also

in accordance with law, therefore, subsequent order passed by the Pr. CIT dated

21.03.2017 was without jurisdiction, as once the CIT(A) is ceased the matter then it

is not within the relevant jurisdiction of the Pr. CIT to pass the order with respect to

the same subject matter and hence, order u/s. 263 was not in accordance with law.

ITA Nos. 153 to 156/Agr/2017 3

accordance with law and it was the duty of the assessee to bring to the notice of Pr.

CIT about the pendency of appeal proceedings.

the present case, the Assessing Officer has passed the order on 24.09.2015 imposing

penalty u/s. 271AAB(1)(b) of the Act. Against that order, the assessee had preferred

appeal before the CIT(A) and the CIT(A) had passed order on 15.02.2017. From the

perusal of the order passed by the ld. Pr. CIT dated 21.03.2017, more particularly,

paragraph No. 5, it is clear that the Pr. CIT had issued show cause notice only on

22.02.2017, i.e., after passing the order by ld. CIT(A) on 15.02.2017. The Pr. CIT can

exercise jurisdiction on twin principles laid down by Hon’ble Supreme Court in the

case of Malabar Industries, wherein it was held that the order should be erroneous

and prejudicial to the interest of Revenue and it was further held that before

exercising the powers u/s. 263, the Pr. CIT should make enquiries and apply his

mind. Once, the appeal order had already been passed by the ld. CIT(A) on

15.02.2017 holding that the provisions of section 271AAB(1)(c) of the Act are

applicable instead of section 271AAB(1)(b) of the Act, it is expected from the Pr. CIT

to apply his mind and also go through the order passed by the ld. CIT(A). However,

in the present case, no such exercise was done. On this count alone, the order of the

Pr. CIT is required to be set aside.

ITA Nos. 153 to 156/Agr/2017 4

the office of Pr. CIT, which is supposed to be looked into before exercising the

powers u/s. 263 of the Act. However, the ld. Pr. CIT has not looked into the order

passed by the ld. CIT(A) and ignored the said order. The impugned order was

passed by the Pr. CIT u/s. 263. In our view the powers u/s. 263 of the Act are

required to be exercised diligently after applying the mind and looking into the

records. In view of this, the ld. Pr. CIT has not exercised his jurisdiction in

accordance with law. Further we are of the also opinion that the powers u/s. 263

and the powers of the ld. CIT(A) u/s. 251 are overlapping. Once the subject matter of

263 proceedings had already attained finality before the ld. CIT(A), then in that

eventuality unless there is element of fraud etc., the Pr. CIT should not exercise its

powers u/s. 263 and should abstain to exercise its powers u/s. 263 when the order

of the Assessing Officer has already been scrutinized by the ld. CIT(A). In the present

case, the ld. Pr. CIT has neither complied with the provisions of section 263 (twin

conditions) nor he had observed the separation of power nor he had stuck to the

finality of order once order of the Assessing Officer was scrutinized by the ld.

CIT(A). We are of the firm opinion that the ld. CIT(A) and CIT(Admn.) are of the

officers of the same rank and are exercising their powers, i.e., appellate powers and

Revisionary powers. Once the order is already examined and scrutinized by the ld.

CIT(A) then the order should not be examined except with due exception of fraud

ITA Nos. 153 to 156/Agr/2017 5

etc. by the Pr. CIT. No case is set up by the ld. Pr. CIT of fraud etc. Therefore, the

exercise of jurisdiction u/s. 263 was without any basis. Accordingly, the orders

passed u/s. 263 were uncalled for and not in accordance with law. Hence, we quash

the same.

Order pronounced in the open court.

Sd/- Sd/-

(Dr. Mitha Lal Meena) (Laliet Kumar) Accountant Member Judicial member

Dated: 15.07.2019 *aks* Copy of order forwarded to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order Assistant Registrar Income Tax Appellate Tribunal Agra Bench, Agra