Principal Commissioner Of Income Tax-I, New Central Revenuebuilding, Statue Circle, Jaipur (Raj v. Shri Ashok Kumar Maheshwari

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 332/2018 Principal Commissioner Of Income Tax-I, New Central RevenueBuilding, Statue Circle, Jaipur (Raj.). ----Appellant Versus Shri Ashok Kumar Maheshwari, 69, Sukh Sagar, Sardar PatelMarg, Dhuleshwar Garden, Jaipur. ----Respondent/Assessee For Appellant(s) : Mr.Anuroop Singhi, Adv. with Mr.N.S.Bhati, Adv. & Mr.Aditya Khandelwal,Adv. Bhati, Adv. & Mr.Aditya Khandelwal,Adv. For Respondent(s): Mr.Shankar Lal Poddar, Adv. withMs.Twinkle Jain, Adv. Ms.Twinkle Jain, Adv. HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE MANEESH SHARMAOrder 03/04/2025-AVNEESH JHINGAN, J (ORAL): 1.This appeal is filed under Section 260A of the Income Tax Act, 1961 (hereinafter ‘the Act’) against the order dated 14.06.2018 passed by the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur (for short ‘tribunal’). 2.The brief facts are that on 18.07.2012 a search was conducted at Nuwal Group, Jaipur of which the assessee- respondent (hereinafter ‘respondent’) was a member. In pursuance to the search, proceedings were initiated and the respondent filed return declaring income of Rs.15,46,83,000/-. The return was accepted and assessment was finalized on 13.03.2015, satisfaction for initiating the penalty proceedings under Section 271AAB was recorded in assessment order. Penaltywas imposed vide order dated 20.08.2015. During the pendencyof the appeal before the Commissioner of Income Tax (Appeal)(hereinafter ‘CIT’) the petitioner applied under the amnestyscheme and was issued certificate under the Direct Tax DisputeResolution Scheme, 2016 (for short ‘the scheme’). The appeal waswithdrawn on 11.11.2016. On the basis of audit objection that thepenalty should have been imposed under Section 271AB instead of271AAB, notice was issued by the revisional authority which wasresponded to on 20.03.2018. The revisional order was passed on27.03.2018 setting aside the penalty order dated 20.08.2015 anddirected that de novo order be passed. In appeal, the tribunal on14.06.2018 set aside the revisional order, hence, the presentappeal. 3.This appeal was admitted on 25.01.2019 on followingsubstantial questions of law:- “i) Whether on the facts andcircumstances of the case and law theTribunal was justified in quashing theorder passed u/s 263 of the I.T. Act, 1961 by stating that the PCIT has nojurisdiction to invoke provisions of Sec.263 of the I.T. Act when an assessee hasbeen granted certificate under the DirectTax Dispute Resolution Scheme, 2016? ii) whether on the facts and circumstancesof the case and law the order of the ITATwas not perverse in quashing the orderpassed u/s 263 of the I.T. Act, 1961 as itis clearly stated in Sec.208 of the DTDRS,Scheme-2016 that search cases were noteligible to avail the scheme and still theassessee chose to file application inDTDRS 2016 hiding the fact that searchwas carried out in his case for the A.Y.under consideration ? iii) Whether on the facts andcircumstances of the case and law theorder of the ITAT was not perverse inquashing the order passed u/s 263 of theI.T Act, 1961 which was initiated as thepenalty order was found to be erroneousand prejudicial to the interest of revenue? iv) Whether on the facts andcircumstances of the case and in law theITAT was justified in quashing the orderpassed u/s 263 of the I.T Act, 1961without appreciating the verdict passed bythe Hon’ble Supreme Court in MalabarUndustrial Co. Ltd., Vs. CIT (2000) 243ITR 831 that held that incorrectassumption of fact or an incorrectapplication of law would satisfy therequirement of the order being erroneous.An order passed in violation of theprinciples of natural justice or withoutapplication of mind, would be an orderfalling in this category?” iv) Whether on the facts andcircumstances of the case and in law theITAT was justified in quashing the orderpassed u/s 263 of the I.T Act, 1961without appreciating the verdict passed bythe Hon’ble Supreme Court in MalabarUndustrial Co. Ltd., Vs. CIT (2000) 243ITR 831 that held that incorrectassumption of fact or an incorrectapplication of law would satisfy therequirement of the order being erroneous.An order passed in violation of theprinciples of natural justice or withoutapplication of mind, would be an orderfalling in this category?” 4.Learned counsel for the revenue submits that certificate granted under the scheme is void. After searchthe respondent was not eligible to apply under the scheme. The argument is that the tribunal erred in setting aside the revisional order in view of the immunity granted to the respondent under the scheme. 5.As per contra, the petitioner was eligible to apply under thescheme as the bar was for the cases where the assessment wasfinalised under Section 153A or 153C of the Act whereas theassessment of the respondent was finalised under Section 143(3) readwith Section 153B of the Act. The contention is that thedepartment till date has not challenged the certificate issuedunder the amnesty scheme and it has attained finality. 6.The contention of the learned counsel for the revenuechallenging the certificate issued under the scheme has a fallacy.No such challenge was made before the tribunal. It is arguablecase as to whether respondent was eligible to apply under thescheme when assessment order was passed under Section 153Band scheme debarred the cases where assessment was finalizedunder Section 153A or 153C. 7.It is an undisputed fact that till date the certificate dated09.11.2016 issued under the scheme holds the field. 8.It would be relevant to reproduce the immunity granted in the certificate: “b. Immunity is granted subject to the provisionscontained in the Scheme, from instituting anyproceeding for prosecution for any offence underthe Income-tax Act/Wealth-tax Act or from theimposition of penalty under the said enactment (asper section 205 (b) (ii) of the Finance Act, 2016), inrespect of the disputed tax as detailed in the tablebelow: Under Section 204(3) of scheme the order passed under Section 204(1) is conclusive and matter covered by such order shall not be reopened in any proceedings under the Act. 9.Once there is immunity granted to the respondent against penalty proceedings, the fact as to whether the penalty should have been imposed under Section 271AAB or under Section 271AB of the Act, would make no difference. The immunity is general against the penalty proceedings and not with regard to a particular provision. The revision on the basis of the audit objection for passing a de novo order as the penalty should have been imposed under Section 271AB cannot be sustained in view of the immunity granted to the respondent. The substantial questions of law framed do not arise from the order of the tribunal. 10.The appeal is dismissed. (MANEESH SHARMA), J Himanshu Soni/Gaurav/30 (AVNEESH JHINGAN), J Reportable:- Yes