DCIT CEN CIR 2(4), MUMBAI vs. STERLING BIOTECH LTD, MUMBAI

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ITA 4335/MUM/2016Status: DisposedITAT Mumbai10 November 2017AY 2010-115 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that since the original assessment orders were revived by a higher ITAT order, the penalty orders passed pursuant to those assessments also survive. Therefore, the appeals were restored to the CIT(A) for adjudication on the merits of the penalty.

What were the facts?

The Revenue filed appeals against CIT(A) orders that had held penalty orders under Section 271(1)(c) invalid because the original assessment orders were set aside under Section 263. However, a prior ITAT order had set aside the Section 263 orders, reviving the original assessments.

What were the issues?

Whether penalty orders under Section 271(1)(c) survive when the assessment orders they were based upon were initially set aside under Section 263 but later revived by a higher tribunal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3),Section 153A,Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “I”, MUMBAI

Before: SHRI C.N. PRASAD, HONBLE & SHRI N.K. PRADHAN, HONBLE

For Appellant: Shri Haresh Bhanushali
For Respondent: Shri B.C.S. Naik, Shri Saurabh Kumar Rai
Hearing: 03.11.2017Pronounced: 10.11.2017

O R D E R PER BENCH 1. All these appeals are filed by the Revenue against different orders of the Ld.CIT(A) for the Assessment Years 2006-07 to 2012-13.

2.

At the outset the Ld.DR Shri B.C.S. Naik submitted that in all these appeals the Ld.CIT(A) held that the penalty order passed u/s.271(1)(c) dated 26.09.2014 in pursuance of the Assessment Order passed

2 TO 4337/MUM/2016 (A.Ys: 2006-07 TO 2012-13) M/s. Sterling Biotech Ltd. u/s.143(3) r.w.s. 153A dated 31.03.2014 cannot survive for the reason that the Assessment Orders passed u/s. 143(3) r.w.s. 153A dated 31.03.2014 were set aside by the Principal CIT, Central -1, Mumbai u/s.263 of the Act and restored the assessments to the file of the Assessing Officer for denovo assessments. The Ld.DR further submits that the assessee filed appeals before the Hon'ble Tribunal against the orders passed u/s.263 setting aside the assessments made u/s.143(3) r.w.s. 153A for all these Assessment Years and the Tribunal by order dated 29.06.2016 in ITA.Nos. 2750 to 2756/MUM/2016 for the Assessment Years 2006-07 to 2012-13 held that the Learned Commissioner of Income Tax was not justified in setting aside the assessments and cannot direct to do the assessments denovo. The Ld.DR submits that in view of the order passed by the Hon'ble Tribunal setting aside the order passed by the Principal CIT, Central-1, passed u/s.263 of the Act, the assessments passed u/s. 143(3) r.w.s. 153A will survive and consequently the penalty orders passed u/s.271(1)(c) pursuant to the orders passed u/s. 143(3) r.w.s. 153A also survives. Therefore the Ld.DR submits that since in the present appeals the Ld.CIT(A) held that the penalty orders will not survive as the assessments were set aside u/s. 263 of the Act and the Ld.CIT(A) has not gone into the merits of the levy of penalty, all these appeals may be restored back to 3 TO 4337/MUM/2016 (A.Ys: 2006-07 TO 2012-13) M/s. Sterling Biotech Ltd. the file of the Ld.CIT(A) for adjudicating the levy of penalty on merits in view of the order passed by the Hon'ble Tribunal setting aside the order of the Principal Commissioner of Income tax passed u/s. 263 of the Act.

3.

The Learned Authorized Representative though initially sought for adjournment, no serious objections were raised for setting aside the matters to the file of the Ld.CIT(A) for hearing the appeals on merits.

4.

We have heard the rival submissions, perused the orders of the authorities below and find that the contentions of the Ld.DR are correct. On a perusal of the Ld.CIT(A) order we find that in all these appeals the Ld.CIT(A) held that in view of the order passed by the Principal Commissioner of Income Tax, Central -1, Mumbai under section 263 of the Act setting aside the Assessment Orders passed u/s. 143(3) r.w.s. 153A dated 31.03.2014 for the Assessment Years 2006-07 to 2012-13 for denovo assessments by the Assessing Officer the Assessment Orders will not survive and consequently the penalty order passed u/s.271(1)(c) dated 26.09.2014 also cannot survive. However, we notice that the Hon'ble Tribunal in ITA.No.2750 to 2756/Mum/2016 dated 29.06.2016 set aside the order passed by the Principal CIT, Central -1, Mumbai passed u/s. 263 in setting aside the assessments.

4 TO 4337/MUM/2016 (A.Ys: 2006-07 TO 2012-13) M/s. Sterling Biotech Ltd.

5.

In view of this order of the Hon'ble Tribunal the assessment orders originally assessed u/s. 143(3) r.w.s. 153A dated 31.03.2014 will survive and the penalty orders passed u/s.271(1)(c) dated 26.09.2014 in pursuance of the Assessment Orders passed u/s. 143(3) r.w.s. 153A dated 31.03.2014 also survive. In the circumstances and since the Ld.CIT(A) did not go into the merits of levy of penalty, and held that penalty orders will not survive based on the order passed u/s. 263 of the Act, all these appeals should go back to the file of the Ld.CIT(A) for fresh adjudication on merits. Thus we restore all these appeals to the file of the Ld.CIT(A) for fresh adjudication in accordance with law after providing adequate opportunity of being heard to the assessee.

6.

In the result, appeals of the Revenue are allowed for statistical purpose.

Order pronounced in the open court on the 10th November, 2017.

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