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Income Tax Appellate Tribunal, DELHI BENCH: ‘A’: NEW DELHI
Before: SHRI KULDIP SINGH & SHRI ANADEE NATH MISSHRA
1. That on the facts and circumstances of the case, CIT(A) was not justified in confirming the penalty order of ACIT, Circle 51(1), New Delhi u/s 221(1) as per which Assessing Officer has levied penalty Rs. 5,00,000/-.
2. That on the facts and under the law, the CIT(A) erred in not appreciating that the default in payment of arrears of tax was for good and sufficient reasons and therefore no penalty should have been levied u/s 221(1) of the IT Act, 1961.
That orders of the lower authorities are not justified on facts and same are bad in law.
For A.Y. 2009-10
That on the facts and circumstances of the case, CIT(A) was not justified in confirming the penalty order of ACIT, Circle 51(1), New Delhi u/s 221(1) as per which Assessing Officer has levied penalty Rs. 5,00,000/-.
2. That on the facts and under the law, the CIT(A) erred in not appreciating that the default in payment of arrears of tax was for good and sufficient reasons and therefore no penalty should have been levied u/s 221(1) of the IT Act, 1961. 3. That orders of the lower authorities are not justified on facts and same are bad in law.
These appeals are filed against the orders u/s 221(1) of IT Act for Assessment Years 2008-09 (F.Y.2007-08) & 2009-10 (F.Y. 2008-09) levying penalty amounting to Rs. 5,00,000/- in each of the two aforesaid Assessment Years. For both these Assessment Years, orders U/s 201 r.w.s. 201(1A) of the Act were passed by the Assessing Officer determining tax liability of Rs. 7899.85 lacs for Financial Year 2008-09 (A.Y. 2009-10) and Rs. 6193.69 lacs for Financial Year 2007-08 (A.Y. 2008-09). Against the two aforesaid orders u/s 201 r.w.s. 201(1A) of the IT Act, the Assessee filed appeals before the Ld. CIT(A). The matter traveled up to Income Tax Appellate Tribunal (ITAT). Vide consolidated order dated 03/08/2016 in & 2416/Del/2015 pertaining to Assessment Years 2008-09 and 2009-10 the Delhi Bench of ITAT set aside the order of Ld. CIT(A) and restored the matter to the file of the Assessing Officer with certain directions. It was informed to us, at the time of hearing, by Ld. Counsel for Assessee that the consequential fresh orders u/s 201 r.w.s. 201(1A) of IT Act have not been passed by the Assessing Officer till date.
3. In the meantime, vide separate orders, each dated 16.03.2012 U/s 221(1) of IT Act, the Assessing Officer also imposed penalty amounting to Rs. 5,00,000/- for each of Financial Year 2007-08 (Assessment Year 2008-09) and Financial Year 2008-09 (Assessment Year 2009-10). The Assessee’s appeals against the aforesaid orders U/s 221(1) of I.T Act were dismissed by the Ld. CIT(A) by order dated 16.02.2015 for Financial Year 2008-09 (A.Y. 2009-10) and order dated 17.02.2015 for Financial Year 2007-08 (A.Y. 2008-09). The present appeals before us are against the aforesaid two orders dated 16.02.2015 and 17.02.2015 of the Ld. CIT(A).
We have heard both sides and carefully perused the materials on record. The Ld. Counsel for Assessee relied on aforesaid order dated 03.08.2016 of ITAT and on Om Prakash Aggarwal vs. ITO 66 ITR 175 (ALL.). He also referred to Section 221(2) of I.T. Act. The Ld. Departmental Representative relied on the orders of the lower authorities.
It is noticed that the penalty u/s 221(1) of IT Act for the aforesaid two Assessment Years has been levied in respect of tax liabilities determined in orders U/s 201(1A) of IT Act for the aforesaid year. As the aforesaid orders u/s 201 r.w.s. 201(1A) of IT Act for Financial Year 2007-08 (Assessment Year 2008-09) and Financial Year 2008-09 (Assessment Year 2009-10) have been set aside by Delhi Bench of ITAT and restored to the file of the Assessing Officer, the penalty levied U/s 221(1) of I.T. Act have no legs to stand at present. We set aside the aforesaid orders dated 17.02.2015 and 16.02.2015 respectively, of the Ld. CIT(A) for A.Y. 2008-09 (F.Y. 2007-08) & A.Y. 2009-10 (F.Y. 2008-09); and restore the corresponding matter regarding penalty u/s 221(1) of the IT Act to the file of the Assessing Officer for fresh orders. The Assessing Officer shall pass fresh orders U/s 221(1) of I.T. Act after the consequential orders U/s 201 r.w.s. 201(1A) of I.T. Act pursuant to aforesaid order dtd. 03.08.2016 of ITAT are passed. The Assessing Officer will give reasonable opportunity to the assessee before passing fresh orders U/s 221(1) of IT Act.
In the result, both the appeals of the assessee are partly allowed for statistical purpose.
Order pronounced in the open court on 13/9/2018