Appeal details
Counselvise Citation
13224114 RSA 2014
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
09-12-2014
Appeal Filed By
Department
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
16-09-2014
Assessment Year
2004-2005
Appeal Filed On
16-04-2014
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 132/PNJ/2014 : (ASST. YEARS : 2004 - 05) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 1(1), PANAJI, GOA (APPELLANT) VS. M/S. SESA INDUSTRIES SESA GHOR, NO. 20, EDC COMPLEX, PATTO, PANAJI, GOA (RESPONDENT) PAN : AACCS7100A ASSESSEE BY : VIJAY GUPTA, VP (TAXATION) & BENECIO MENEZES, AGM (TAXATION) REVENUE BY : SMT. ASHA DESAI, DR DATE OF HEARING : 13/11/2014 DATE OF PRONOUNCEMENT : 9 /1 2 /2014 O R D E R PER P.K. BANSAL 1. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DT. 17.12.2013 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 2. THE LD CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED BY STATING THAT THE PENALTY ORDER OF THE AO IS TIME BARRED BY FOLLOWING ONLY THE PROVISO TO SECTION 275(1)(A) AND BY OVER RULING THE MAIN SECTION OF 275(1)(A) OF THE I.T. ACT. IT IS HELD THAT A PROVISO IS SUBSIDIARY TO THE MAIN SECTION AND IT MUST BE CONSTRUCTED IN THE LIGHT OF THE SECTION ITSELF AS REPORTED IN 21 ITR 121 S.C. CAMBATTA & CO. LTD. VS. COMMISSIONER OF INCOME TAX. 2. AFTER HEARING THE RIVAL SUBMISSIONS, WE NOTED THAT THE AO IN THIS CASE HAS LEVIED THE PENALTY U/S 271(1)(C) VIDE HIS ORDER DT. 26.8.2009 BY HOLDING AS UNDER: IX] IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I HOLD THAT THE ASSESSEE BY CLAIMING EXCESSIVE DEDUCTION U/S 80IB & 80HHC HAS FURNISHED 2 ITA NO. 132/PNJ/2014 (ASST. YEAR : 2004 - 05) INACCURATE PARTICULA RS OF ITS INCOME & HENCE I HOLD THIS A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF I.T ACT. I ACCORDINGLY LEVY A PENALTY OF RS.68,33,363/ - BEING MINIMUM PENALTY LEVIABLE @ 100% OF THE TAX SOUGHT TO BE EVADED. THE TAX SOUGHT TO BE EVADED IN THIS CASE IS COMPUTED AS UNDER : 1) TAX & SURCHARGE PAYABLE AFTER GIVING EFFECT TO ITAT ORDER RS. 6,10,21,682/ - LESS : - 2) TAX & SURCHARGE PAYABLE AS PER REVISED RETURN FILED ON 9.01.2006 RS. 5,41,88,319/ - TAX SOUGHT TO BE EVADED RS. 68,33,363/ - THE ASSES SEE WENT IN APPEAL BEFORE CIT(A) AND CHALLENGED THE ORDER OF LEVY OF PENALTY BOTH ON MERIT AND ON THE GROUND THAT THE PENALTY IS BARRED BY LIMITATION. CIT(A) DELETED THE PENALTY BY ALLOWING THE APPEAL OF THE ASSESSEE BY HOLDING AS UNDER : 4.4 I HAVE GONE THROUGH THE PENALTY ORDER AND VARIOUS RELEVANT DATES AND THE SUBMISSION OF THE APPELLANT. THERE IS NO CONFUSION ABOUT THE FACT THAT, THOUGH THE A.O. CORRECTLY INITIATED PENALTY PROCEEDINGS WITH THE PASSING OF THE ASSESSMENT ORDER, HE FINALISED AND PASSED THE PENALTY ORDER AFTER HE RECEIVED THE ORDER OF THE HONBLE ITAT. IT IS THE CONTENTION OF THE APPELLANT THAT THE IMPUGNED PENALTY ORDER IS TIME BARRED IN TERMS OF PROVISO TO SECTION 275(1) (A). PROVISO TO SECTION 275(1) (A) WAS INSERTED BY FINA NCE ACT 2003 WITH EFFECT FROM 01.06.2003. PRIOR TO THAT DATE, THE OUTER LIMIT FOR PASSING A PENALTY ORDER WAS INCORPORATED IN CLAUSE (A) OF SUB - SECTION (1) OF SECTION 275 ITSELF. THE PURPOSE OF THIS PROVISION WAS TO FIX TIME - LIMIT FOR COMPLETING PENALTY PR OCEEDINGS WITH REFERENCE TO THE DATE OF PASSING OF ORDER BY THE CIT (A). BEFORE INSERTION OF THE SAID PROVISO, THE ASSESSING OFFICERS WOULD NORMALLY COMPLETE THE PENALTY PROCEEDINGS AFTER THE DISPOSAL OF APPEAL BY HONBLE INCOME TAX APPELLATE TRIBUNAL. IN THIS CONTEXT, IT IS RELEVANT TO REFER TO CIRCULAR NO.7 OF 2003 BY CBDT, EXPLAINING THE CHANGES MADE BY THE FINANCE ACT, 2003. IN THE SAID CIRCULAR THE AMENDMENT IN S. 275 RELATING TO TIME LIMIT FOR IMPOSITION OF PENALTY HAS BEEN EXPLAINED. IN VIEW OF THE A MENDMENT IN THE ACT IN S.275, THE PENALTY ORDER HAS TO BE PASSED WITHOUT WAITING FOR THE ORDER OF THE TRIBUNAL. IN CASE THERE IS DIFFERENCE IN THE QUANTUM, BECAUSE OF THE ORDER PASSED BY HONBLE ITAT, HIGH COURT OR SUPREME COURT NECESSARY MODIFICATIONS CAN BE CARRIED OUT AS PER THE PROVISIONS OF SUB - SECTION 1A OF SECTION 275. THUS, IT IS CLEAR THAT TIME LIMIT FOR PASSING A PENALTY ORDER HAS TO BE CALCULATED FROM THE DATE OF RECEIPT OF THE ORDER OF CIT(A) AND NOT THE DATE RECEIPT OF THE ORDER OF ITAT. IN VIE W OF THE LEGAL PROVISIONS, I FIND MERIT IN THE ARGUMENTS OF THE APPELLANT AND THEREFORE, DECIDE THAT THE PENALTY ORDER PASSED BY 3 ITA NO. 132/PNJ/2014 (ASST. YEAR : 2004 - 05) THE A.O WAS TIME BARRED AND THEREFORE BAD - IN - LAW. THE PENALTY ORDER OF THE A.O. IS SET - ASIDE ACCORDINGLY. THESE GROUNDS OF APPE AL OF THE APPELLANT ARE ALLOWED. 5. SINCE, I HAVE ALLOWED THE APPEAL OF THE APPELLANT ON THE GROUND OF TIME BARRING, THERE IS NO NEED TO DISCUSS AND ADJUDICATE ON MERITS ANYMORE. 3. WE NOTED THAT IN THIS CASE THE ASSESSMENT DURING THE COURSE OF WHICH THE PENALTY PROCEEDING WAS INITIATED WAS PASSED ON 29.12.2006 WHILE THE CIT(A)S ORDER WAS PASSED ON 30.7.2007. ORDER OF CIT(A) WAS RECEIVED ON 10.8.2007. THE ITAT HAS PASSED THE ORDER ON 18.2.2009. THE PENALTY WAS LEVIED BY T HE AO VIDE ORDER DT. 26.8.2009. CIT(A) HAS TAKEN THE VIEW THAT PENALTY SHOULD HAVE BEEN IMPOSED BY THE AO BY 31.3.2009 IN LIEU OF PROVISO TO SEC. 275(1)(A) WHICH WAS INSERTED BY THE FINANCE ACT, 2003. THEREFORE, THE ONLY QUESTION BEFORE US IS WHETHER THE PENALTY ORDER PASSED BY THE AO ON 26.8.2009 WAS BARRED BY LIMITATION. 4. WE HAVE ALSO GONE THROUGH THE PROVISIONS OF SEC. 275(1)(A). THIS SECTION READS AS UNDER : 'SECTION 275 - BAR OF LIMITATION FOR IMPOSING PENALTIES. (1) NO ORDER IMPOSING A PENALT Y 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 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 COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE APPELLATE TRIBUNAL IS RECEIVED BY THE CHIEF 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 COMMISSIONER (APPE ALS) UNDER SECTION 246 OR SECTION 246A, AND THE COMMISSIONER (APPEALS) PASSES THE ORDER ON OR AFTER THE 1ST 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 PROCEEDIN GS, 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 4 ITA NO. 132/PNJ/2014 (ASST. YEAR : 2004 - 05) IN WHICH THE ORDER OF THE COMMISSIONER (APPEALS) IS RECEIVED BY THE CHIEF COMMISSIONER OR COMMISSIONER, WHI CHEVER IS LATER.' 5 . A PLAIN READING OF THIS SECTION SHOWS THAT UNDER SECTION 275(L)(A), THE REQUIREMENT OF THE MAIN SECTION IS THAT, WHEN AN ASSESSMENT ORDER IS A SUBJECT MATTER OF APPEAL BEFORE THE COMMISSIONER (APPEALS) O R B E F O R E T R I B U N A L , THEN THE PENALTY ORDER SHOULD BE PASSED, WITHIN A PERIOD OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE COMMISSIONER (APPEALS) O R T R I B U N A L O R D E R IS RECEIVED BY THE CHIEF COMMISSIONER / COMMISSIONER. THE PROVISO TO THIS SECTION WAS INSERTED W.E.F. 1 . 06 . 2003, TO EXPAND THIS TIME PERIOD OF SIX MONTHS TO ONE YEAR, IN CASES WHEREIN THE COMMISSIONER (APPEALS) PASSES AN ORDER ON/AFTER 1ST JUNE 2003 AND NO APPEAL IS FILED BEFORE THE TRIBUNAL. THE PROVISO DOES NOT DEAL WITH CASES WHERE THE APPEALS ARE PENDING BEFORE THE ITAT UNDER SECTION 253 O F THE ACT. THAT LIMB OF SECTION 275(L)(A), WHICH FIXES THE TIME LIMIT OF SIX MONTHS FROM THE DATE OF RECEIPT OF ORDER OF THE ITAT BY THE COMMISSIONER / CHIEF COMMISSIONER, FOR PASSING AN ORDER OF PENALTY IS NOT DISTURBED IN ANY MANNER BY THE INSERTION OF T HE PROVISO. THIS IS THE INTERPRETATION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF RAYALA CORPN. (P.) LTD (SUPRA), WHEREIN IT HAS HELD AS FOLLOWS: - 'A READING OF THE ABOVE SAID PROVISION MAKES IT CLEAR THAT THE INTERPRETATION PLACED BY LEARNED COUNSEL FOR THE PETITIONER ON THE SAID PROVISION IS ACCEPTABLE. THERE IS NO DISPUTE IN THIS CASE THAT THE PETITIONER HAS FILED AN APPEAL BEFORE THE TRIBUNAL AND THE SAME IS PENDING. IN SUCH A CASE, THE LIMITATION PERIOD FOR THE LEVY OF PENALTY WILL BE AS PROVIDED FOR UNDER S. 275(1)(A), IE. SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE TRIBUNAL IS RECEIVED BY THE CHIEF CIT. THERE CANNOT BE ANY DOUBT ON THIS ASPECT. ACCORDINGLY, THIS COURT IS OF THE VIEW THAT THE PROVISO TO S. 275 (1)(A) OF THE ACT, DOES NOT NULLIFY THE AVAILABILITY TO THE THIRD RESPONDENT OF THE PERIOD OF LIMITATION OF SIX MONTHS FROM THE END OF THE MONTH WHEN THE ORDER OF THE TRIBUNAL, CHENNAI, IS RECEIVED BY THE THIRD RESPONDENT HEREIN.' 6. WE HAVE ALSO GONE THROUGH THE DECISIONS OF THE AMRITSAR BENCH OF TH E TRIBUNAL IN THE CASE OF TARLOCHAN SINGH & SONS (HUF) AND THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN RAYALA CORPORATION (P) LTD. WE NOTED THAT THE 5 ITA NO. 132/PNJ/2014 (ASST. YEAR : 2004 - 05) DECISION OF THE HON'BLE MADRAS HIGH COURT IN RAYALA CORPORATION (P) LTD. WAS NOT CITED BEFORE THE BENCH. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. MOHAIR INVESTMENT & TRADING CO. (P) LTD., 63 DTR 226 AND MAHINDRA INTERTRADE LTD. VS. DCIT, 133 ITD 597. WE, THEREFORE, SET ASIDE THE ORDER OF CIT(A) AND ALLOW THE GROUND TAKEN BY THE REVENUE. SINCE THE CIT(A) HAS NOT DECIDED THE APPEAL ON OTHER GROUNDS, WE, THEREFORE, RESTORE THE ISSUE RELATING TO LEVY OF PENALTY BEFORE CIT(A) WITH THE DIRECTION THAT CIT(A) SHALL RE - DECIDE THE OTHER GROUNDS TAKEN BY THE ASSESSEE IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS ALLOWED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 9 /1 2 /2014. S D / - (D.T.GARASIA) JUDICIAL MEMBER S D / - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI DATED : 9 /1 2 / 201 4 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER
