2023 (9) TMI 1046 - SCH - Income Tax

Levy of Penalty - ITAT deleted the penalty in the remand back proceedings which was confirmed the HC - Satisfaction of the AO - Retrospective Amendment by Finance Act, 2008 - Constitutional validity of Section 271 (1B) - HELD THAT - Delhi High Court had remanded the matter to the Income Tax Appellate Tribunal (ITAT) for fresh consideration in light of the judgment, which is impugned in this appeal. On remand, the ITAT, Delhi Bench-B, New Delhi granted relief to the respondent/Assessee by allowing her appeal. The said order was challenged by the Revenue 2013 (3) TMI 75 - DELHI HIGH COURT before the Delhi High Court. The Division Bench of the Delhi High Court, however, dismissed the appeal. Hence, learned counsel for the respondent submitted that as far as the respondent/Assessee is concerned, the appeal filed by the appellants herein has been rendered infructuous and, therefore, an appropriate order may be made in this appeal. As appellant(s)/Union of India and Anr. did not contradict the aforesaid facts submitted by learned counsel for the respondent. He, however, submitted that questions of law, which arise in this appeal may be left open, to be agitated in other appropriate case. Having regard to the submissions of learned counsel for the respective parties, we dismiss this appeal insofar as only the present respondent/Assessee is concerned in view of the aforesaid developments. However, the questions of law, which arise in this appeal are left open, to be agitated by the appellants in any other appropriate case.

Summary

Issues involved:
The issues involved in the judgment are the Constitutional validity of Section 271 (1B) of the Income Tax Act, 1961, directions issued by the Delhi High Court, remand to the Income Tax Appellate Tribunal (ITAT), relief granted to the respondent/Assessee, appeal filed by the Revenue, dismissal of the appeal by the Division Bench of the Delhi High Court, rendering of the appeal infructuous, and leaving open questions of law for future cases.

The judgment pertains to an appeal filed by the Union of India and the Department against the Delhi High Court's decision upholding the Constitutional validity of Section 271 (1B) of the Income Tax Act, 1961, and issuing certain directions. The respondent/Assessee had the matter remanded to the Income Tax Appellate Tribunal (ITAT) for fresh consideration following the Delhi High Court's order. Subsequently, the ITAT granted relief to the respondent/Assessee by allowing her appeal. The Revenue challenged this decision in ITA No.47/2013 before the Delhi High Court, which ultimately dismissed the appeal. Consequently, the appeal filed by the appellants was deemed infructuous in relation to the respondent/Assessee.

The learned counsel for the appellant(s)/Union of India and Anr. did not dispute the facts presented by the respondent's counsel. However, they requested that the questions of law arising in the appeal be kept open for future litigation in suitable cases. In light of the submissions from both parties, the Supreme Court dismissed the appeal concerning only the respondent/Assessee due to the developments outlined. The questions of law raised in the appeal were preserved for the appellants to raise in any appropriate future case as deemed necessary. The pending application(s) were disposed of accordingly.