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Income Tax Appellate Tribunal, DELHI BENCH ‘E’ NEW DLEHI
Before: SHRI ANIL CHATURVEDI & SHRI N.K. CHOUDHRY
This appeal has been preferred by the Assessee/Appellant herein, against the order dated 04.02.2015, impugned herein, passed by the learned Commissioner of Income-tax (Appeals)- 22, New Delhi (in short “Ld. Commissioner”), u/s. 250 of the Income-tax Act, 1961 (in short ‘the Act’) for the assessment year 2006-07.
In this case, the original assessment u/s. 115WE(3) was completed on 11.02.2008, whereby the value of fringe benefits at Rs.16,60,66,503/- as declared by the Appellant in its fringe benefit tax return, was accepted.
2.1 Subsequently, during the scrutiny assessment proceedings u/s. 143(3) of the Act, it was revealed on 09.11.2009 that the Appellant has contributed a sum of Rs.3,22,74,88,883/- towards pension funds (superannuation fund for the employees) which it had not shown in the FBT return. Therefore, by observing that value of Rs.3,22,74,88,883/- had escaped assessment within the meaning of section 115WG of the Act, the Assessing Officer had issued a notice u/s. 115WH of the Act on dated 12.11.2009 and ultimately assessed the value of Fringe Benefit (FB) at Rs.3,39,35,55,386/- by completing the assessment order u/s. 115WG/115WE(3) of the Act on dated 12.02.2010.
The Appellant being aggrieved, challenged the said order passed by the Assessing Officer before the then Ld. CIT, who vide order dated 15.12.2010 dismissed the Appellant’s appeal upholding the addition made by the AO, on account of contribution towards superannuation fund by the Assessing Officer.
3.1 Subsequently, penalty of Rs.1,24,93,28,674/- u/s. 271(1)(d) was also levied on 18.10.2011.
Thereafter, Assessment order dated 12/02/2010 was revised by the ld. Pr. Commissioner of Income-tax. LTU, Delhi by passing an order dated 30-03-2012 u/s. 263 of the Act, whereby the Fringe Benefit on account of contribution made by the Appellant to an approved superannuation fund liable for Fringe Benefit Tax during the year was determined to the tune of Rs.4522.91 million instead of Rs.3227.49 million as assessed by the Assessing Officer. The Assessing Officer was consequently directed to give effect to the order u/s. 263 of the Act and to take further consequential action as required under the law.
The Assessing Officer consequently levied the penalty of Rs.43,60,35,043/- on the amount of difference/income (4,68,89,65,503 the value of fringe Benefit, assessed vide order dated 11.04.2012 by giving effect to PCIT’s order dated 30.03.2012 u/s. 263 of the Act minus Rs.3,39,35,55,386/- the value of Fringe Benefit assessed u/s. 115WG/115WE(3) of the Act as per order dated 12.02.2010 by the Assessing Officer). It is a fact that vide order dated 26.09.2014, the Hon’ble Tribunal in appeal No. 510/Del/2011 filed against the order dated 15.12.2010 passed by the ld. CIT(Appeals) arises out of the original assessment order dated 11.12.2008 u/s. 115WE(3) read with section 115WC of the Act, restored the issue qua the Fringe Benefits, on the basis of which the penalty was levied, to the file of the Assessing Officer for de novo consideration.
The Assessing Officer in compliance to the direction of the Hon’ble Tribunal, re-examined the issue qua Fringe Benefits and accepted the value of Fringe Benefits to the tune of Rs. 16,60,66,503/- as declared by the Appellant. Further, the appeal filed by the Appellant against the order u/s. 263 of the Act as well as against the order dated 23.01.2015 passed by the ld. CIT(A)-22, New Delhi whereby enhancement of value of Fringe Benefits was affirmed, were dismissed being infructuous.
In the totality of facts and circumstances, as the foundation for levying the penalty and affirmation thereof has already been collapsed, consequently, the penalty will not survive. Hence, the penalty under consideration stands deleted and the appeal of the Appellant stands allowed.
In the result, the appeal filed by the appellant stands allowed.
Order pronounced in the open court on 29/03/2023.