DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, JAIPURQ, JAIPUR V. JUGAL KISHORE GARG ALIAS SH. JUGAL KISHORE DEREWALA, JAIPUR

ITA 1317/JPR/2025

AI Insights

The case involves four appeals by the department against Sh. Jugal Kishore Garg alias Sh. Jugal Kishore Derewala concerning penalties imposed under sections 271D and 271E of the Income Tax Act for the assessment years 2012-13 and 2016-17. The penalties were related to violations of sections 269SS and 269T, which govern the conditions under which loans and deposits can be accepted and repaid. The Learned CIT(A) set aside the penalties, citing that they were imposed beyond the statutory limitation period, a decision supported by the precedent set in the Hissaria Brothers case. The Tribunal, referencing the same precedent and statutory provisions, upheld the CIT(A)'s decision and dismissed the department's appeals.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789282 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 25-09-2025
• Other Referred Cases: Hissaria Brothers vs. Commissioner of Income Tax
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH OJHA
• Assessee Lawyers: S.L. PODDAR
• Keywords: Set aside; Period of limitation; Time period of passing order
• Section: 263; 246

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A-Bench” JAIPUR Jh xxu xks;y] ys[kk lnL; ,oa Jh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI GAGAN GOYAL, AM & SHRI NARINDER KUMAR, JM vk;dj vihyla-@ITA No. 1317 to 1320/JPR/2025 fu/kZkj.k o\"kZ@Assessment Year : 2016-17 & 2012-13 Dy. Commissioner of Income Tax, Central Circle-2, Jaipur. cuke Vs. Sh. Jugal Kishore Garg alias Sh. Jugal Kishore Derewala A-36, Govindi, Takhteshahi Road, JLN Marg, Jaipur. LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No. ABBPG4020E vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assessee by : Shri S.L. Poddar, Adv. jktLo dh vksjls@Revenue by: Shri Rajesh Ojha, CIT lquokbZ dh rkjh[k@Date of Hearing : 25/11/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 25/11/2025 vkns'k@ORDER PER: NARINDER KUMAR, JUDICIAL MEMBER . All the above captioned four appeals, by the department are being disposed of by this common order, as same issue is involved, and same arguments has been advanced. On 30.07.2024, Learned CIT(A) disposed of four appeals filed by the assessee, relating to the assessment years 2012-13 and 2016-17. The assessee had filed one appeal, challenging order dated 23.12.2024, levying penalty u/s 271D of the Act; another appeal Printed from counselvise.com 2 ITA No. 1317 to 1320/JP Sh. Jugal Kishore Garg alias Sh. Jugal Kishore Derewala, Jaipur. challenging order of levy of penalty dated 23.12.2024 passed u/s 271E, as regards the assessment year 2012-13. The assessee had also filed another appeal challenging order of penalty dated 23.12.2024 passed u/s 271E of the Act, and yet another appeal challenging order of penalty dated 23.12.2024, imposing penalty u/s 271D of the Act, both relating to the assessment year 2016-17. Relevant provisions of law 2. Section 271D, reads as under:- “Penalty for failure to comply with the provisions of section 269SS. 271D. (1) If a person takes or accepts any loan or deposit or specified sum in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so taken or accepted. (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner: 14-18[Providedthat any penalty under sub-section (1), on or after the 1st day of April, 2025, shall be imposed by the Assessing Officer.]” 3. Section 271E, reads as under:- “Penalty for failure to comply with the provisions of section 269T. 271E. (1) If a person repays any loan or deposit or specified advance referred to in section 269T otherwise than in accordance with the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified advance so repaid. (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner: 14-18[Providedthat any penalty under sub-section (1), on or after the 1st day of April, 2025, shall be imposed by the Assessing Officer.]” Printed from counselvise.com 3 ITA No. 1317 to 1320/JP Sh. Jugal Kishore Garg alias Sh. Jugal Kishore Derewala, Jaipur. Ground for setting aside of penalty orders 4. Learned CIT(A), vide four impugned orders, set aside all the four penalty orders while allowing the four appeals filed by the assessee. The only reason for setting aside all the impugned penalty orders is that those were found to have been passed beyond the prescribed period of limitation, and as such could not be sustained. 5. Learned CIT(A) relied on decision by Hon’ble Apex Court in the case of Hissaria Brothers, 386 ITR 719-(2016) 74 taxmann.com 22, the ratio decidendi of which is that relevant date for determining the limitation period is the date of passing of the assessment order. 6. Applying the above said decision, Learned CIT(A) observed that herein the assessment orders having been passed on 29.03.2024, the order of penalties u/s 271D and E could be passed by 30.09.2024, the orders of penalty having been passed on 23.12.2024, were barred by limitation. Consequently, the penalties imposed on the assessee were deleted. 7. Learned AR for the assessee-respondent herein has submitted that in the case titled of Commissioner of Income Tax vs. Hissaria Brothers, (2007) 291 ITR 244 (Rajasthan), our own Hon’ble High Court had dealt with the issue of limitation and Hon’ble Apex Court upheld said decision. Printed from counselvise.com 4 ITA No. 1317 to 1320/JP Sh. Jugal Kishore Garg alias Sh. Jugal Kishore Derewala, Jaipur. The contention is that all these four matters are also covered by the said decisions and Learned CIT(A) has rightly allowed the appeal filed by the assessee, thereby deleting the orders of penalty, and as such, all these appeals filed by the department deserve to be dismissed. In Hissaria Brothers’ case, our own Hon’ble High Court observed in the manner as:- “38. We are, therefore, of the opinion that since penalty proceedings for default in not having transactions through the bank as required under Sections 269SS and 260T are not related to the assessment proceeding but are independent of it, therefore, the completion of appellate proceedings arising out of the assessment proceedings or the other proceedings during which the penalty proceedings under Sections 2710 and 271E may have been initiated has no relevance for sustaining or not sustaining the penally proceedings and, therefore. Clause (a) of Sub-section (1) of Section 275 cannot be attracted to such proceedings. If that were not so Clause (c) of Section 275(1) would be redundant because otherwise as a matter of fact every penalty proceeding is usually Initiated when during some proceedings such default is noticed, though the final fact finding in this proceeding may not have any bearing on the issues relating to establishing default e.g. penalty for not deducting tax at source while making payment to employees, or contractor, or for that matter not making payment through cheque or demand draft where it is so required to be made. Either of the contingencies does not affect the computation of taxable income and levy of correct tax on chargeable income if Clause (a) was to be invoked, no necessity of Clause (c) would arise. 39. Thus, both on the ground that the transaction in question retention of sale price by the kachhaadhatiya did not amount to deposit and its utilisation and dealing with it at the instance of farmer constituents did not amount to repayment of loan or deposits willin the meaning of Section 269SS or Section 269T and on the ground that limitation under Section 275(1)(c) applies to such proceedings we hold in favour of the respondents\" Thus the order in barred by imitation on both the points” 8. Section 275(1) is reproduced for ready reference, and it reads as under:- Printed from counselvise.com 5 ITA No. 1317 to 1320/JP Sh. Jugal Kishore Garg alias Sh. Jugal Kishore Derewala, Jaipur. “275. [(1)] No order imposing a penalty under this Chapter shall be passed- [(a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the [*] [Joint Commissioner (Appeals) or to the] Commissioner (Appeals) under section 246 [or section 246A] or an appeal to the Appellate Tribunal under section 253 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 end of the month in which the order of the 74[*] 74[Joint Commissioner (Appeals) or the] Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the 75 [Principal Chief Commissioner or] Chief Commissioner or 75[Principal Commissioner or] Commissioner, whichever period expires later: [Provided that in a case where the relevant assessment or other order is the subject-matter of an appeal to the 769 [Joint Commissioner (Appeals) or to the] Commissioner (Appeals) under section 246 or section 246A, and 760 [the Joint Commissioner (Appeals) or] the Com-missioner (Appeals) passes the order on or after the Ist day of June, 2003 disposing of such appeal, an order imposing penalty shall be passed before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or within one year from the end of the financial year in which the order of 76% [the Joint Commissioner (Appeals) or] the Commissioner (Appeals) is received by the \"[Principal Chief Commissioner or] Chief Commissioner or \"[Principal Com-missioner or] Commissioner, whichever is later;] (b) in a case where the relevant assessment or other order is the subject-matter of revision under section 263 78 [ or section 264], after the expiry of six months from the end of the month in which such order of revision is passed; (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 end of the month in which action for imposition of penalty is initiated, whichever period expires later.” 9. Faced with the decision by our own Hon’ble High Court upheld by Hon’ble Apex Court, in Hissaria Brothers’ case (supra), Ld. DR for the department has not raised any argument to the contra or cited any other decision by Hon’ble Apex Court on the issue. Printed from counselvise.com 6 ITA No. 1317 to 1320/JP Sh. Jugal Kishore Garg alias Sh. Jugal Kishore Derewala, Jaipur. Result 10. In view of the provisions of section 271D, 271E and 275(1) of the Act, and the decision in Hissaria Brother case (supra), we do not find any illegality in the four impugned orders, passed by Learned CIT(A), whereby all the four penalty orders, passed by the Assessing Officer were set aside on the ground that same were passed beyond the prescribed period of limitation. Consequently, all the four appeals filed by the department are hereby dismissed. Files be consigned to the record room after the needful is done by the office. Copy of this common order be placed on the connected files. Order pronounced in the open court on 25/11/2025. Sd/- Sd/- ¼xxu xks;y½ ¼ujsUnz dqekj½ (GAGAN GOYAL) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 25/11/2025 *Santosh vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- DCIT, Central Circle-2, Jaipur. 2. izR;FkhZ@ The Respondent- Sh. Jugal Kishore Garg alia Sh. Jugal Kishore Derewala, Jaipur. 3. vk;djvk;qDr@ Theld CIT 4. vk;djvk;qDr@CIT(A) 5. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur Printed from counselvise.com 7 ITA No. 1317 to 1320/JP Sh. Jugal Kishore Garg alias Sh. Jugal Kishore Derewala, Jaipur. 6. xkMZQkbZy@ Guard File ITA No. 1317 to 1320/JPR/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar Printed from counselvise.com "