DECCAN MINERALS PRIVATE LIMITED,MUMBAI V. DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(1)(1) , MUMBAI

ITA 5829/MUM/2024

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The case involves Deccan Minerals Pvt. Ltd., which appealed against a penalty imposed by the Deputy Commissioner of Income Tax for the Assessment Year 2015-16. The penalty was levied under Section 271(1)(c) for alleged concealment of income. The primary contention in the appeal was the timeliness of the penalty order, which the assessee argued was barred by limitation. The Tribunal examined the timeline of events, including the filing of the income tax return, the reopening of the case under Section 147, and the issuance of show-cause notices. The Tribunal found that the penalty order was issued beyond the statutory period allowed for such actions, leading to the quashing of the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474826 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Other Referred Cases: CIT vs. Chhajer Packaging and Plastics Pvt. Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.R. MAKWANA
• Assessee Lawyers: ANIL MATHUR
• Section: 147; 271(1)(c)

Judgement Text

" DIN THE INCOME TAX APPELLATE TRIBUNAL, ‘D’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.58299/Mum/2024 (Assessment Year :2015-16) Deccan Minerals Private Limited 16th Floor, Nirmal Nariman Point Mumbai – 400 021 Vs. Dy. Commissioner of Income Tax, Circle 3(1)(1), Mumbai PAN/GIR No.AAACD2533J (Appellant) .. (Respondent) Assessee by Shri Anil Mathur & Shri Arpit Mathur Revenue by Shri R.R. Makwana Date of Hearing 23/01/2025 Date of Pronouncement 30/01/2025 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 21/09/2024 filed by NFAC, Delhi in relation to penalty proceedings u/s. 271(1)(c) for the A.Y.2015-16. 2. In various grounds of appeal assessee has challenged the levy of penalty of ₹ 31,34,607/- and also challenged the impugned penalty order passed by the ld. Assessing Officer dated 04/09/2021 that it is barred by limitation u/s 275(1)(c). ITA No. 5829/Mum/2024 Deccan Minerals Pvt. Ltd. 2 3. The brief facts qua the issue of limitation are that assessee has filed its return of income on 10/11/2017 for A.Y.2015-16 declaring taxable income of ₹94,98,810/-. Later on, assessee’s case was reopened u/s 147 on the ground that assessee has not filed return of income for A.Y.2015-16. In compliance with the notice u/s.148, assessee submitted the details and information that it has already filed its return of income and income as per return declared by the assessee on 10/11/2017 was duly accepted and assessed vide order dated 26/11/2018. In the assessment order ld. Assessing Officer has initiated the penalty u/s.271(1)(c) and issued notice u/s.274 read with section 271(1)(c) on 27/11/2018, on the ground that return was filed only in response to notice u/s.148, even though there was no disallowance was made in the order u/s 148/143(3). Since there was no addition or disallowance, assessee did not prefer any appeal against the quantum order. After issuing show-cause notice on 27/11/2018, ld. Assessing Officer did not pass any order. After lapse of considerable time of almost 30 months, another show-cause notice was issued on 26/05/2021 and penalty of ₹31,34,607/- was levied vide order dated 04/09/2021. Thus, it has been stated that in terms of Section 271(1)(c), penalty order should have been passed within financial year in which the proceedings for imposition of penalty has been initiated or completed or six months from the end of the month in which the action for imposition of penalty is initiated which is later. Here, the penalty proceedings were initiated on ITA No. 5829/Mum/2024 Deccan Minerals Pvt. Ltd. 3 27/11/2018 and therefore, penalty order should have been passed either before 31/03/2019 or latest by 31/05/2019. 4. From the perusal of the records, it is seen that it is not in dispute that the return of income was filed on 10/11/2017 and reasons were recorded for reopening, on the ground that assessee has not filed return for A.Y.2015-16 which fact itself is incorrect because the return was e-filed. In the assessment order passed u/s.143(3) r.w.s. 147 dated 26/11/2018, no addition or disallowance was made and the assessment was finalized on the total income as declared in the return of income. Thus, there was no appeal which was filed against the said order. It is a matter of record that penalty proceedings were initiated for concealment of income and notice u/s.274 r.w.s. 271(1)(c) was issued on 27/11/2018. Then, after more than 2 ½ years another show- cause notice issued was on 26/05/2021 which was duly complied by the assessee. Thereafter, penalty order was passed on 14/09/2021 levying penalty of ₹31,34,607/-. For the sake of ready reference, the relevant extract of the provisions of Section 275(1)(c) are reproduced hereunder:- “275(1) No order imposing a penalty under this Chapter shall be passed- (a).... (b)..... (c) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the ITA No. 5829/Mum/2024 Deccan Minerals Pvt. Ltd. 4 end of the month in which action for imposition of penalty is initiated, whichever period expires later.\" 5. Since assessee has not preferred any appeal, therefore, the period of imposing the penalty order as per clause ‘c’ was either upto 31/03/2019 or 31/05/2019 and later period being 31/05/2019. Accordingly, the penalty order should have been passed on or before 31/05/2019. Thus, the penalty order dated 04/09/2021 is clearly barred by limitation, then same is quashed. 6. Before us, assessee has relied upon the judgment of Hon’ble Jurisdictional High Court in the case of CIT vs. Chhajer Packaging and Plastics Pvt. Ltd., reported in (2007) 165 taxmann.com 109 stating that no penalty can be levied if conditions of Section 271(1)(c) was not complied with. Accordingly, penalty order passed by the ld. AO is quashed and consequently appeal of the assessee is allowed. 7. In the result, appeal of the assessee is allowed. Order pronounced on 30th January,2025. Sd/- (GIRISH AGRAWAL) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 30/01/2025 KARUNA, sr.ps ITA No. 5829/Mum/2024 Deccan Minerals Pvt. Ltd. 5 Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// "