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Income Tax Appellate Tribunal, DELHI “C” BENCH: NEW DELHI
Before: SHRI KUL BHARAT & SHRI PRADIP KUMAR KEDIA
ORDER
PER KUL BHARAT, JM :
The present appeal and cross objection filed by the assessee and the Revenue for the assessment year 2012-13 are directed against the order of Ld. CIT(A)-I, Noida dated 31.12.2018. For the sake of convenience, appeal filed by the assessee and cross-objection filed by the Revenue were heard together and are being disposed off by way of consolidated order for the sake of brevity.
C.O.No.-37/Del/2020 [In Year : 2012-13] 2. First, we take up Cross-Objection No.37/Del/2020 filed by the Revenue pertaining to Assessment Year 2012-13 wherein the Revenue has raised following grounds of appeal:-
1. “Because Sh. S.K. Srivastava, the then CIT(A)-1, Noida had been compulsorily retired by the Government of India with effect from 11.06.2019 and accordingly, he had become functus officio w.e.f. 11.06.2019. Accordingly, any discharge of function by an officer who has become functus officio is a nullity in law and without jurisdiction.
2. In this regard, reliance is placed on the decision of the Hon'ble High Court of Karnataka in the case of Rudragouda v. The University of Agricultural Sciences and ors., Writ Petition No. 31734/2016 (S- RES), wherein it was held that: - "The petitioner/officer after his retirement becomes functus officio. No officer can continue to discharge his functions subsequent to his retirement and more particularly to take action against the subordinate officer or to seek such direction from this Court.” (emphasis added) It is to be noted that the term functus officio has been defined to mean the following: - Black's Law Dictionary (Sixth Edition Page 673) gives its meaning as follows: Having fulfilled the function. discharged the office or accomplished the purpose. and therefore. of no further force or authority. Accordingly, it is submitted that once the then CIT(A)-Noida has been compulsorily retired i.e., with effect from 11.06.2019, any order Page | 2 prima facie passed by him or acted upon by him after the date of his compulsory retirement is without jurisdiction.
3. Because a vigilance inspection for the work carried out by Sh. Sanjay Kumar IRS (Retd.),who was posted to as CIT(A)-1 Noida with the additional charge of CIT(A)-2 Noida, prior to his compulsory retirement w.e.f 11.06.2019 was conducted on 19.06.2019 by the Vigilance Team of Income Tax (Vigilance), which revealed that orders purported to have been passed by Sh. Srivastava in the month of December, 2018 were prima-facie passed in the month of June, 2019. In majority of these orders liable to have been uploaded on the ITBA system were uploaded between 11th June to 13th June, 2019 i.e. after his demitting the office, as per the charge sheet filed by the CBI. As per the CBl's charge sheet there are also indications of falsification of records to allude towards dispatch of these orders on 7th June, 2019, whereas they were dispatched on 14th June, 2019. It was further revealed that 104 orders were claimed to be passed by Sh. S.K. Srivastava during December, 2018, however, many of them were uploaded to the central server using his RSA token only after his retirement.
4. Because Ld. CIT(A)-1, Noida has committed a jurisdictional error by deciding the appeal beyond fifteen days of the last hearing in contravention of Instruction no. 20/2003 dated 23.12.2003 issued by the CBDT and the order was uploaded on the ITBA after an inordinate delay of time, as it was uploaded after he was compulsorily retired under provisions of Fundamental Rules (FR) 56(J).
5. Because the order of the CIT(A)-1, Noida, being a nullity in the eyes of law, may be set aside for fresh. adjudication to the jurisdictional Ld. CIT(A), Noida.
6. Because, it is immaterial whether an order passed without jurisdiction is in favour of revenue or against it. Such an order is contrary to the administration of the Income Tax Act and it pollutes the streams of justice. Therefore, Revenue would be an aggrieved party if a Commissioner of Income Tax (Appeals) passes an order without jurisdiction and it is in the interest of the revenue as well as tax administration to ensure that orders are passed by the correct legal authority under the Act.
7. Because the revenue being 'State' cannot be a beneficiary of an order passed without jurisdiction by an Appellate Commissioner and therefore it is absolutely immaterial that ultimately the case was decided in favour of the revenue by the Appellate Commissioner albeit without jurisdiction.
The Revenue craves leave to modify any of the grounds above and/or to add any fresh ground or grounds as and when it is required to do so.”
In the cross-objection, it is stated by the Revenue that certain appeals were decided by Shri S. K. Srivastava, Ld.CIT(A)-1, Noida on 31.12.2018 whereas the notices to the parties u/s 250 of the Income Tax Act, 1961 (“the Act”) were issued only on 27.12.2018. These notices were handed over to the postal authorities for sending them through speed post on 31.12.2018. It is further stated that Ld.CIT(A), Shri S.K.Srivastava was compulsory retired by Government of India w.e.f 11.06.2019 hence, any order passed thereafter, was without jurisdiction.
During the course of hearing, both the parties have agreed that the impugned order may be set aside to the file of Jurisdictional Ld. CIT(A) who would decide the same in the light of the outcome of the appeal preferred by the assessee in against the quantum additions.
We have heard Ld. Authorized Representatives of the parties and perused the material available on record. It is pointed out by the Revenue that the impugned order passed by Ld.CIT(A) is without jurisdiction on account of the fact that the order was passed factually passed subsequent to the retirement of Ld.CIT(A). However, impugned order is dated 31.12.018, but the same was passed subsequent to the retirement of Ld.CIT((A) and uploaded belatedly. Therefore, considering the submissions of Authorized Representatives of the parties, we deem it proper to set aside the impugned order and restore the issue of penalty to the file of the Jurisdictional Ld.CIT(A), who would decide the issue on merit afresh after giving adequate opportunity of hearing to the parties. Hence, the cross-objection filed by the Revenue is allowed for statistical purposes.
In the result, the appeal filed by the Revenue is allowed for statistical purposes.
Year : 2012-13] 7. Now, we take up assessee’s appeal in for the Assessment Year 2012-13 wherein the assessee has raised following grounds of appeal:-
1. “That on the facts and law involved, the Ld. Commissioner of Income tax (Appeals) [Ld. CIT(A)] has erred in confirming the penalty of Rs.62,86,480/- levied by the Ld. Assessing Officer (Ld. AO) u/s 271(1)(c) of the Act, on the twin ground that the assessee has concealed its income and also furnished inaccurate particulars of its income.
2. That the Ld. CIT(A) has erred in confirming the penalty u/s 271(1)(c) of the Act without appreciating that on the facts and law involved the assessee has neither concealed its income nor furnished any inaccurate particulars of its income.
3. That the assessment of interest income of Rs. 1,93,75,902/- on temporary FDRs out of project specific funds during construction period as income from other sources as against adjustment thereof against preoperative expenses as claimed by the assessee is based on difference of view on debatable legal issue. There is no concealment of income or inaccurate particulars of income involved where the addition and/or disallowance is based on Bona-fide claims, Debatable claims and difference of opinion as held inter-alia by the Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts Pvt. Ltd., reported in 322 ITR 158 (SC). As such the penalty as levied by the Ld. AO deserves to be deleted. 4. That no specific default was pointed out in the initial penalty notice involved and as such too the said penalty is unlawful and liable to be quashed. 5. That the penalty has been confirmed by the Ld. CIT(A) both on the ground of alleged concealment of income and of furnishing inaccurate particulars of income without pointing out any specific default under section 271(1)(c). As such too the penalty u/s 271(1)(c) as confirmed by the Ld. CIT(A) deserves to be deleted. 6. That the penalty order as made u/s 271(1)(c) of the Act by Ld. AO and as sustained by Ld. CIT(A) is based on erroneous views and/or non-appreciation of the facts and law involved without properly considering or appreciating the material and explanations on record, without rebutting the case laws and arguments made by the Appellant. As such too the penalty as sustained deserves to be deleted.
That the grounds of Appeal
as herein are without prejudice to each other.
8. That the appellant respectfully craves leave to add, amend, alter and/or forego any ground(s) at or before the time of hearing.”
8. Apropos to grounds of appeal, Ld. Sr. Standing Counsel submitted that the impugned order has been passed without jurisdiction.
We have heard Ld. Authorized Representatives of the parties and perused the material available on record. We have set aside the impugned order in the cross-objection filed by the Revenue being without jurisdiction. The relevant contents of the order are reproduced as under:-
5. “We have heard Ld. Authorized Representatives of the parties and perused the material available on record. It is pointed out by the Revenue that the impugned order passed by Ld.CIT(A) is without jurisdiction on account of the fact that the order was passed factually passed subsequent to the retirement of Ld.CIT(A). However, impugned order is dated 31.12.018, but the same was passed subsequent to the retirement of Ld.CIT((A) and uploaded belatedly. Therefore, considering the submissions of Authorized Representatives of the parties, we deem it proper to set aside the impugned order and restore the issue of penalty to the file of the Jurisdictional Ld.CIT(A), who would decide the issue on merit afresh after giving adequate opportunity of hearing to the parties. Hence, the cross-objection filed by the Revenue is allowed for statistical purposes.” Therefore, considering the submissions of Authorized Representatives of the parties, we deem it proper to restore the issue of penalty to the file of the Jurisdictional Ld.CIT(A) who would decide the issue on merit afresh after giving adequate opportunity of hearing to the assessee. Hence, grounds raised by the Page | 7 assessee is allowed for statistical purposes. Before parting, it is clarified that the Ld.CIT(A) would take into consideration the outcome of assessee’s appeal in ITA No.308/Del/2016.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
In the final result, Cross-objection filed by the Revenue and appeal filed by the assessee are allowed for statistical purposes.