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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SANJAY ARORA, AM
सुनवाई क� तार�ख / : 23.6.2016 Date of Hearing घोषणा क� तार�ख / : 30.6.2016 Date of Pronouncement आदेश / O R D E R Per Sanjay Arora, A. M.: This Appeal by the Assessee contest the levy of confirmation of the penalty by the Commissioner of Income Tax (Appeals)-4, Mumbai (‘CIT(A)’ for short) vide its order dated 18.11.2014, i.e., as levied u/s. 271(1)(c) of the Income Tax Act, 1961 (‘the Act’ hereinafter) by the Assessing Officer (A.O.) vide his order dated 15.3.2013 for the assessment year (A.Y.) 2008-09.
(A.Y. 2008-09) Bakul Investments Private Limited vs. ITO 2. The issue arising in this appeal is the head of income where-under the income by way of lease rent and/or leave and license fee arising to the assessee is taxable, i.e., either as business income, as returned by the assessee, or as income from house property, as being pressed by the Revenue. And for which it relies on the provision of section 27(iiib) r/w s. 269UA(f) of the Act in-as-much as the property leased is by way of sub-lease, with the parent lease being for 99 years, i.e., way beyond the threshold limit of 12 years prescribed for a leasee to be considered as a deemed owner, and who is to be consider as an owner for the purposes of Chapter IV-C of the Act.
3. At the outset, it was submitted by the ld. Authorized Representative (AR), the assessee’s counsel, that the assessment for A.Ys. 2001-02 to 2010-11, i.e., including the current year, have since been set aside to the file of the A.O. qua, among others, the said issue, by the Tribunal vide its order dated 02.12.2015 (copy on record). That being the case, the impugned penalty shall not survive. The ld. Departmental Representative (DR) conceded to this being the position, further stating that the Revenue should be allowed liberty to levy penalty afresh, i.e., in the set aside proceedings.
We have heard the parties, and perused the material on record, including the tribunal’s order supra. The tribunal, noting the contentions of both the parties, set aside the matter back to the file of the A.O. to decide the issue afresh in accordance with law vide para 6 of its order, which reads as under: ‘6. After hearing both the parties and on perusal of the orders of the Revenue Authorities as well as the cited precedents as well as the relevant material placed before us. On hearing both the parties and the arguments put forth by both the Ld Representatives on both the above mentioned issues (first and third issues) in the assessee’s appeals for the AYs under consideration, we are of the opinion that the first and the third issues relating to the correct head of income (A.Y. 2008-09) Bakul Investments Private Limited vs. ITO should be remanded to the file of the AO to decide them afresh in the light of the above mentioned judgment of the Apex Court (supra) (*). We order accordingly. AO shall grant a reasonable opportunity of being heard to the assessee as per the set principles of natural justice. Accordingly, relevant grounds raised in the assessee’s appeals are allowed for statistical purposes.’ (*)Chennai Properties and Investments Ltd. vs. CIT [2015] 373 ITR 673 (SC)
Though the ld. AR argued the appeal on merits as well, the fact of the matter is that the assessment of the impugned income is set aside, so that it does not survive, and there is therefore no question of levy of penalty in its’ respect. The plea by the ld. DR with regard to liberty being extended to the Revenue, the same is superfluous in- as-much as there is no estoppel against law and, surely, the Revenue, where it considers proper, could initiate penalty proceedings, which are separate and distinct proceedings from the quantum proceedings. We, accordingly, allowing the assessee’s plea for a set aside of the impugned penalty, direct so qua the penalty levied on this income. We decide accordingly.