2018 (9) TMI 620 - AT - Income Tax

Penalty levied u/s 271(1)(c) - Revision u/s 263 on share capital - Held that - It is pertinent to note that as of today the situation is that order passed u/s 263 has been quashed by the Tribunal vide order dated 30/5/2016 2016 (5) TMI 1453 - ITAT DELHI . These two appeals are passed in consequence to the order u/s 263 which is now quashed. Therefore, these two appeals does not survive. There is no appeal pending in Hon ble High Court. Therefore, both the appeals are dismissed. The revenue is at liberty to revive these appeals in case the Hon ble High Court given the decision in favour of the Revenue. - Decided in favour of assessee.

Summary

Issues involved:
1. Appeal against order dated 16/2/2015 & 24/03/2015 passed by CIT(A)-XXIV, New Delhi for Assessment Year 2003-04.
2. Appeal against penalty imposed under section 271(1)(c) of the Income Tax Act, 1961.

Analysis:
1. The first appeal (ITA No. 2131/DEL/2015) raised concerns about the delay in filing the appeal and the denial of substantive justice by the CIT (A). The appellant sought condonation of delay, liberty to add fresh grounds, and amendment of existing grounds. The Tribunal noted that the order u/s 263, subject to appeal, was quashed, rendering the assessment and penalty proceedings irrelevant. As no appeal was pending in the High Court, both appeals were dismissed, allowing the assessee's appeals.
2. The second appeal (ITA No. 2132/DEL/2015) challenged the penalty under section 271(1)(c) imposed by the CIT (A). The appellant argued against the denial of an opportunity to be heard, the lack of merit review in penalty imposition, and the summary dismissal of detailed submissions. The Tribunal emphasized that the quashing of the order u/s 263 nullified subsequent proceedings. With no pending appeal in the High Court, both appeals were dismissed, granting relief to the assessee.

The Tribunal highlighted that the quashing of the order u/s 263 by the Tribunal in a previous case eliminated the basis for the subsequent assessment and penalty proceedings. Despite the possibility of the Department filing an appeal in the High Court, the current situation indicated that the appeals in question did not survive due to the quashed order. The Tribunal allowed the assessee's appeals, emphasizing the lack of pending appeals in the High Court and dismissing the current appeals in light of the quashed order u/s 263.