Pr. Commissioner Of Income Tax Central -2 New Delhi v. Pico Deepali Overlays Consortium

$~6 * IN THE HIGH COURT OF DELHI AT NEW DELHI+ ITA 327/2019 PR. COMMISSIONER OF INCOME TAX CENTRAL -2 NEW DELHI ..... Appellant Through: Ms.Lakshmi Gurung, Sr.Standing Counsel with Mr.Sagar Suri, Advocate. versus PICO DEEPALI OVERLAYS CONSORTIUM ..... Respondent Through: Mr.Solil Kapoor with Mr.Abhishek Gupta and Mr.Sumit Lalchandani, Advocates. CORAM: JUSTICE S. MURALIDHAR JUSTICE TALWANT SINGH O R D E R % 30.07.2019 CM APPL. 14886/2019 (exemption) 1. Allowed, subject to all just exceptions. ITA 327/2019 and CM APPL. 14885/2019 (stay) 2. The Revenue is in appeal against an order dated 19[th] September 2018 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No.4929/Del/2018 for the Assessment Year (‘AY’) 2011-12. 3. The Revenue is aggrieved by the ITAT remanding the matter to the Assessing Officer (‘AO’) for ascertaining whether Deepali Design and ITA 327/2019 Page 1 of 4 Exhibits Pvt. Ltd. (‘Deepali’) is in fact a member of the Association of Persons (‘AOP’) under the name of ‘Pico Deepali Overlays Consortium’. 4. The contention of the Revenue is that there was already enough material available with the ITAT to come to the conclusion that Deepali was in fact a member of the AOP. 5. This Court has been taken through the impugned order of the ITAT both by learned Counsel for the Revenue as well as the learned Counsel for the Assessee/ Respondent appearing on advance notice. At the outset, it requires to be noticed that the question whether the Deepali was in fact a member of the AOP appears to have been a contested one even while the case was before the ITAT. The cause title of the impugned order of the ITAT itself reflects that against the order of the Commissioner of Income Tax (Appeals) [CIT (A)], two separate appeals had to be filed. One on behalf of the AOP represented by Deepali ‘as alleged member’ and the other by Deepali in its name again expressly stating that it was ‘alleged’ to be a member of the AOP. 6. The impugned order of the ITAT notes that the assessment order was passed by the AO ex parte i.e. without Deepali appearing in the assessment proceedings. There were three members of the AOP. One was Deepali, the other was Pico Event Marketing India Pvt. Ltd. and the third was Pico Hong Kong Ltd. A perusal of the assessment order framed against the AOP shows that the value of the contract performed by the AOP was approximately Rs.159 crores whereas the assessment was framed at Rs.405 crores. It was ITA 327/2019 Page 2 of 4 the contention of Deepali before the ITAT that the income earned by it on the part of contract performed by it had in fact been offered by it for tax and an assessment had also been completed against it separately on that basis. Deepali accordingly submitted that on the face of it, the original assessment order itself would have to be revisited not only to determine whether in fact Deepali was still a member of the AOP and, therefore, liable to be proceeded against for the tax liability of the AOP and further on merits whether the assessment had to be of the AOP minus Deepali. 7. Learned counsel for the Revenue repeatedly urged before the Court that in separate proceedings following an Arbitral Award in the dispute between the AOP and the Department of Sports, Ministry of Youth and Sports, GOI regarding the work undertaken for the Commonwealth Games 2010, the AOP had taken the stand that since the assessment order against the AOP has been set aside in its entirety by the ITAT, there was no outstanding liability of AOP as of date. Accordingly, it is submitted that to protect the interests of the Revenue, this Court must entertain the present appeal. 7. Learned counsel for the Revenue repeatedly urged before the Court that in separate proceedings following an Arbitral Award in the dispute between the AOP and the Department of Sports, Ministry of Youth and Sports, GOI regarding the work undertaken for the Commonwealth Games 2010, the AOP had taken the stand that since the assessment order against the AOP has been set aside in its entirety by the ITAT, there was no outstanding liability of AOP as of date. Accordingly, it is submitted that to protect the interests of the Revenue, this Court must entertain the present appeal. 8. The Court is shown an order dated 13[th] June 2019 passed by the Assistant Commissioner of Income Tax Central Circle - 17 attaching a payment of Rs.125 crores ‘on account of arbitral award deposited in the Registry of Hon’ble Delhi High Court by the Department of Sports, Ministry of Youth and Sports’ anticipating the submission that there is no outstanding demand in view of the ITAT having set aside the assessment order against the AOP. 9. The Court sees no reason why in the present proceedings, the Court ITA 327/2019 Page 3 of 4 should express any view on the above order of the Department passed under Section 281B of the Income Tax Act, 1961 (‘Act’). It will be open to the Department to take whatever measures it considers appropriate in that regard. 10. As far as the impugned order of the ITAT is concerned, the Court is of the view that the remand of the matter by the ITAT to the AO could not be said to be unwarranted in the facts and circumstances of the case. The impugned order does not give rise to any substantial question of law which requires to be determined by this Court. The appeal is accordingly dismissed. The pending application is also dismissed. S. MURALIDHAR, J. JULY 30, 2019 tr TALWANT SINGH, J. ITA 327/2019 Page 4 of 4