Case Number: ITA 1546/DEL/2020
Appellant: Accordis Health Care Pvt Ltd, New Delhi
Respondent: ACIT Central Circle-16, New Delhi
Assessment Year: 2015-16
Result: Penalty Dismissed Due to Jurisdiction Issue
Case Filed On: 2020-09-07
Order Type: Final Tribunal Order
Date of Order: 2022-08-17
Pronounced On: 2022-08-17
The case of Accordis Health Care Pvt Ltd vs ACIT Central Circle-16, New Delhi pertains to the assessment year (AY) 2015-16. The appeal was filed by Accordis Health Care Pvt Ltd, challenging the penalty levied under section 271(1)(c) of the Income Tax Act, 1961. The penalty was upheld by the Commissioner of Income-tax (Appeals) [CIT(A)] and subsequently challenged before the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘A’.
Accordis Health Care Pvt Ltd filed its return of income declaring a loss of Rs. 9,87,69,937 for AY 2015-16. The assessment proceedings were initiated through a notice under section 143(2) dated 15.07.2016. However, a search was conducted on the assessee under section 132 of the Income Tax Act on 23.09.2016.
The Assessing Officer (AO) completed the assessment under section 143(3) on 14.11.2017, resulting in a penalty of Rs. 24,42,275 under section 271(1)(c) for concealment of income and furnishing inaccurate particulars of income. The CIT(A) upheld the penalty in its order dated 27.01.2020.
The appellant challenged the penalty on the following grounds:
The ITAT Delhi Bench ‘A’, consisting of Shri N.K. Billaiya, Accountant Member, and Shri Anubhav Sharma, Judicial Member, heard the case on 10.08.2022 and pronounced the order on 17.08.2022.
The Tribunal noted the key dates and events:
The Tribunal observed that the assessment proceedings under section 143(2) were pending when the search was conducted, leading to the abatement of those proceedings as per the second proviso to section 153A(1). Consequently, the assessment order dated 14.11.2017 was beyond jurisdiction and void ab initio. Therefore, the penalty proceedings under section 271(1)(c) could not be sustained.
The ITAT allowed the appeal, set aside the impugned penalty order, and dismissed the penalty proceedings. The Tribunal’s decision underscores the importance of jurisdictional compliance and procedural correctness in assessment and penalty proceedings.
The case of Accordis Health Care Pvt Ltd vs ACIT Central Circle-16, New Delhi for AY 2015-16 highlights the critical aspect of jurisdiction in tax assessment and penalty proceedings. The ITAT’s decision to dismiss the penalty due to the jurisdictional issue stemming from the abatement of pending assessment proceedings during a search assessment underlines the need for adherence to statutory provisions by the tax authorities.
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