The Income-tax Officer, Hoshiarpur V. Sh. K.D. Bali, Hoshiarpur

ITA 137/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8801 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-02-2016
• Assessment Year: 1994-1995
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SHARDA
• Section: 260A; 246; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER [ I.T.A NO.137(ASR)/2014 ASSESSMENT YEAR: 1994-95 INCOME TAX OFFICER, HOSHIARPUR-2, HOSHIARPUR. VS. SH. K.D. BALI, C/O M/S MAHILPUR OIL STORE, MAHILPUR, HOSHIARPUR. PAN:ABUPBI368D (APPELLANT) (RESPONDENT) APPELLANT BY: SH. R.K. SHARDA (DR.) RESPONDENT BY: SH. SURINDER MAHAJAN (CA. ) DATE OF HEARING: 01.02. 2016 DATE OF PRONO UNCEMENT: 04.03.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(A), DATED 05.03. 2014 FOR ASST. YEAR 1994-95. 2. THE GROUNDS OF APPEAL TAKEN BY REVENUE ARE REPRO DUCED BELOW. (I) THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE PENALTY OF RS.33,60,000/- LEVIED BY THE A.O U/S 271(1)(C) OF THE INCOME TAX A CT,1961. THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE PENALTY PR OCEEDINGS WERE INITIATED AT THE TIME OF COMPLETION OF ASSESSMENT A ND THE ASSESSMENT WAS SUSTAINED BY THE HONBLE PUNJAB & HA RYANA HIGH COURT, CHANDIGARH AND SECTION 275(1A) WAS RIGHTLY A PPLIED BY THE A.O. (II) THAT, IT IS PRAYED THAT THE ORDER OF THE LD. C IT(A) BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. THE BRIEF FACTS OF THE CASE AS NOTED IN THE ASSE SSMENT ORDER ARE THAT AN ADDITION OF RS.58,20,600/- WAS MADE TO THE INCOME OF ASSESSEE ITA NO.137 (ASR)/2014 ASST. YEAR 1994-95 2 VIDE ORDER DATED 27.03.1997 AND IN APPEAL BEFORE LE ARNED CIT(A), THE LEARNED CIT(A) SET ASIDE THE ADDITION OF RS.50,00,0 00/- OUT OF THE TOTAL ADDITION VIDE ORDER DATED 12.03.1998 AND CONSEQUENT LY THE ASSESSING OFFICER PASSED A FRESH ASSESSMENT ORDER ON 31.12.19 99 AND ASSESSED THE INCOME AT RS.5,78,330/- AND ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) BUT DID NOT COMPLETE THE PENALTY PROCEEDI NGS. THE ASSESSEE IN THE MEAN TIME AGAIN FILED APPEAL BEFORE LEARNED CIT (A) AND LEARNED CIT(A) DECIDED THE ISSUED IN FAVOUR OF ASSESSEE VIDE ORDER DATED 09.10.2000. AGAINST THE ORDER OF LEARNED CIT(A), THE REVENUE FI LED APPEAL BEFORE ITAT AND ITAT DISMISSED THE APPEAL FILED BY REVENUE VIDE ORDER DATED 27.06.2005. THE REVENUE FILED APPEAL AGAINST THE OR DER OF TRIBUNAL BEFORE HONBLE HIGH COURT AND THE HONBLE HIGH COUR T VIDE ORDER DATED 17.02.2011DECIDED THE ISSUE IN FAVOUR OF REVENUE. T HE ASSESSING OFFICER IN VIEW OF THE ORDER OF HONBLE HIGH COURT AFTER GI VING OPPORTUNITY NOTICE U/S 129 TO THE ASSESSEE COMPLETED PENALTY PROCEEDIN GS AND IMPOSED PENALTY VIDE ORDER DATED 21.12.2011. AGAINST THE PE NALTY ORDER THE ASSESSEE FILED APPEAL BEFORE LEARNED CIT(A) AND CON TENDED THAT THE ORDER PASSED BY ASSESSING OFFICER IN PENALTY PROCEEDINGS WAS TIME BARRED AND LEARNED CIT(A) VIDE ORDER DATED 05.03.2014 DELETED THE PENALTY BY HOLDING THAT THE PENALTY ORDER WAS TIME BARRED. 4. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 5. AT THE OUTSET, THE LEARNED DR SUBMITTED THAT IN VIEW OF THE ORDER OF HONBLE HIGH COURT THE PENALTY PROCEEDINGS WHICH WE RE INITIATED EARLIER ITA NO.137 (ASR)/2014 ASST. YEAR 1994-95 3 WERE REVIVED IN VIEW OF THE PROVISIONS OF SECTION 2 75(1A) AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO THE PROVISIONS OF SECTION 275(1A). 6. THE LEARNED AR, ON THE OTHER HAND, SUBMITTED THA T THE PROVISIONS OF SECTION 275(IA) WERE INSERTED IN THE ACT VIDE AM ENDMENT ACT 2006 W.E.F 13.07.2006 WHEREAS THE ASSESSEES CASE RELATE S TO ASSESSMENT YEAR 1994-95. HE SUBMITTED THAT THE LAW EXISTING AT THE TIME OF COMMITTING AN OFFENCE CAN BE APPLIED AND LAW WHICH WAS NOT IN FOR CE AT THE TIME OF COMMITTING AN OFFENCE CANNOT BE APPLIED. HE SUBMITT ED THAT IT IS AN UNDISPUTED FACT THAT BEFORE 13.07.2006, SECTION 275 (1A) WAS NOT ON STATUTE AND THE PROVISIONS OF SECTION 275(1)(A) WER E ONLY APPLICABLE AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO THE PR OVISIONS OF SECTION 275(1)(A). HE SUBMITTED THAT IN THESE PROVISIONS T HE ORDER OF EFFECT OF HIGH COURT IS NOT MENTIONED AND THEREFORE, THE CASE WAS TIME BARRED AS RIGHTLY HELD BY LEARNED CIT(A). RELIANCE IN THIS CA SE WAS PLACED ON THE FOLLOWING CASE LAWS: (I) B.N. SHARMA VS. CIT 226 ITR 442 (SC) (II) COSMO FILMS LTD. VS. ACIT (ITAT, DELHI BENCH) IN ITA NO.2192(DEL)2010. (III) ADDITIONAL DIRECTOR OF INCOME TAX VS. PIONEER OVERSEAS CORPORATION 34 CCH 189 DEL TRIB 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSING OFFICER HA D INITIATED THE PENALTY PROCEEDINGS ON 31.12.1999 BUT DID NOT PASS ANY PENA LTY ORDER AND IT WAS ONLY AFTER THE HONBLE HIGH COURT DECIDED THE ISSUE IN FAVAOUR OF REVENUE ITA NO.137 (ASR)/2014 ASST. YEAR 1994-95 4 THAT PENALTY PROCEEDINGS WERE REVIVED. FROM THE PRO VISIONS OF SECTION 275(1A), WE FIND THAT THE PROVISIONS WERE INCLUDED IN THE ACT VIDE AMENDMENT ACT. 2006 AND IT WAS APPLICABLE FROM 13.0 7.2006 WHEREAS THE CASE OF THE ASSESSEE RELATES TO ASSESSMENT YEAR 1994-95, THEREFORE, AT THE TIME OF FILING OF RETURN FOR THE ASSESSMENT YEA R 1994-95 THE PROVISIONS OF SECTION 275(1A) WERE NOT APPLICABLE. THE HONBLE SUPREME COURT IN THE CASE OF B.N. SHARMA VS. CIT REPORTED A T 226 ITR 442 (SC) HAS HELD THAT THE PENALTY IMPOSABLE SHOULD BE WORKE D OUT ON THE BASIS OF LAW IN FORCE AT THE TIME OF FILING OF RETURN WHICH CONTAINED ALLEGED CONCEALMENT OR MISS -STATEMENT. WE FURTHER FIND THA T THE DELHI BENCH OF ITAT IN ITA NO. 2192 VIDE ORDER DATED 22.07.2011, F OR ASS. YEAR 1998-99 IN THE CASE OF COSMO FILMS LTD. VS. ACIT (SUPRA) UN DER SIMILAR FACTS AND CIRCUMSTANCES VIDE PARS 10 TO 17 HAS DECIDED SIMILA R ISSUE IN FVOUR OF ASSESSEE BY HOLDING AS UNDER: 10. THUS AS PER SECTION 275(1)(A) PROVISO, IN ORDE R TO BE WITHIN LIMITATION, A PENALTY ORDER NEEDS MUST BE PASSED, I N THE FACTS OF THE PRESENT CASE, WITHIN ONE YEAR FROM THE END OF THE F INANCIAL YEAR IN WHICH THE ORDER OF THE COMMISSIONER (A) IS RECEIVED BY TH E CHIEF COMMISSIONER OR COMMISSIONER, WHICHEVER, IS LATER, IN A CASE WHERE THE ASSESSMENT ORDER IS SUBJECT MATTER OF APPEAL BEFORE THE COMMISSIONER (A) AND THE COMMISSIONER PASSES THE ORDER ON OR AFTER 1.6.2003 DISPOSING OF SUCH APPEAL. 11. IN THE PRESENT CASE, THE ORDER OF THE ID. CIT( A) IN QUANTUM APPEAL WAS PASSED AFTER 1.6.2003, I.E., ON 31.7.2003, AS A VAILABLE FROM THE RECORD. IT WAS RECEIVED BY THE DEPARTMENT ON 7.8.20 03, AS UNREBUTTEDLY CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE. THUS, AS PER THE PROVISO TO SECTION 275(1)(A) OF THE ACT, THE PENALT Y ORDER OUGHT TO HAVE BEEN PASSED ON OR BEFORE 31.3.2005, I.E., WITHIN ONE YEA R FROM THE END OF FINANCIAL YEAR IN WHICH THE ID. CIT(A)'S ORDER WAS RECEIVED BACK BY THE DEPARTMENT. THE PENALTY ORDER, HOWEVER, GOT TO BE P ASSED ONLY ON 28.7.2009. THAT BEING SO, THE CONTENTION OF THE ASS ESSEE IS CORRECT. THE PENALTY ORDER IS CLEARLY BARRED BY LIMITATION PROVI DED BY THE PROVISO TO SECTION 275(1 )(A) OF THE ACT. ITA NO.137 (ASR)/2014 ASST. YEAR 1994-95 5 12. APROPOS THE DEPARTMENTS CONTENTION THAT THE CA SE IS COVERED BY THE PROVISO TO SECTION 275(1A) RATHER THAN THE PROVISO TO SECTION 275(L)(A) OF THE ACT, IT IS SEEN THAT THIS IS NOT CORRECT. SECTION 2 75(1A) READS AS FOLLOWS: [(1A) IN A CASE WHERE THE RELEVANT ASSESSMENT OR O THER ORDER IS THE SUBJECT-MATTER OF AN APPEAL TO THE COMMISSIO NER (APPEALS) UNDER SECTION 246 OR SECTION 246A OR AN APPEAL TO THE APPELLATE TRIBUNAL UNDER SECTION 253 OR AN APPEAL TO THE HIGH COURT UNDER SECTION 260A OR AN APPEAL TO THE SUPREME COURT UNDER SECTION 261 OR REVISION UNDER SECTION 263 OR SECTION 264 AND AN ORDER IMPOSING OR ENHANCING OR REDUCING OR CANCELLING PENALTY OR DROPPING THE PROCEEDINGS F OR THE IMPOSITION OF PENALTY IS PASSED BEFORE THE ORDER OF THE COMMISSIONER (APPEALS) OR THE APPELLATE TRIBUNAL OR THE HIGH COURT OR THE SUPREME COURT IS RECEIVED BY THE CHIEF COMMISSIONER OR THE COMMISSIONER OR THE ORDER OF RE VISION UNDER SECTION 263 OR SECTION 264 IS PASSED, AN ORDER IMPOSING OR ENHANCING OR REDUCING OR CANCELLING PEN ALTY OR DROPPING THE PROCEEDINGS FOR THE IMPOSITION OF PENA LTY MAY BE PASSED ON THE BASIS OF ASSESSMENT AS REVISED BY GIVING EFFECT TO SUCH ORDER OF THE COMMISSIONER (APPEALS) OR, THE APPELLATE TRIBUNAL OR THE HIGH COURT, OR THE SUPREM E COURT OR ORDER OF REVISION UNDER SECTION 26 3 OR SECTION 764: 13. AS PER SECTION 275(1 A) OF THE ACT, THEREFOR E, THE LIMITATION PROVIDED THERE UNDER CONCERNS CASES WHERE THE ASSESSMENT ORD ER OR REVISION IS UNDER APPEAL AT THE RELEVANT STAGE AND AN ORDER IMP OSING OR ENHANCING OR REDUCING OR CANCELLING PENALTY OR DROPPING THE PROC EEDINGS FOR THE IMPOSITION OF PENALTY PASSED BEFORE THE APPELLATE O RDER IS RECEIVED BY THE DEPARTMENT OR ORDER OF REVISION IS PASSED. IN SUCH A SITUATION, AN ORDER IMPOSING OR ENHANCING OR REDUCING OR CANCELING PENA LTY OR DROPPING THE PROCEEDINGS FOR THE IMPOSITION OF PENALTY MAY BE P ASSED ON THE BASIS OF ASSESSMENT AS REVISED BY GIVING EFFECT TO THE APPEL LATE ORDER OR THE REVISIONAL ORDER. 14. HOWEVER, IN; THE PRESENT CASE, NO ORDER EI THER IMPOSING OR ENHANCING OR REDUCING OR CANCELLING PENALTY OR DROP PING THE PROCEEDINGS FOR THE IMPOSITION OF PENALTY STANDS PASSED. THAT B EING SO, THE PROVISIONS OF SECTION 275(1 A) ARE NOT APPLICABLE. 15. IN VIEW OF THE ABOVE, THE PENALTY ORDER IS HIT BY THE PROVISO TO SECTION 275(L)(A) OF THE ACT. GOING BY THE PARA-MET ERS LAID DOWN THEREIN IN THE SAID SECTION, THE PENALTY ORDER IS CLEARLY BEYO ND THE LIMITATION PROVIDED THEREIN. 16. ACCORDINGLY, THE PENALTY ORDER IS CANCELLED, BEING BARRED BY LIMITATION, AS ABOVE. 17. SINCE THE PENALTY ORDER STANDS CANCELLED AS BARRED BY LIMITATION, NOTHING ELSE SURVIVES. AS SUCH, THE ORIGINAL GROUND S RAISED BY THE ITA NO.137 (ASR)/2014 ASST. YEAR 1994-95 6 ASSESSEE, ON MERITS, ARE NOT REQUIRED TO BE GONE IN TO AND WE ARE NOT DOING SO. [ THE FACTS IN THE PRESENT CASE ARE SIMILAR TO THE FA CTS IN THE CASE OF COSMO FILMS LTD.(SUPRA) THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF TRIBUNAL, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) , THEREFORE, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 8. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH MARCH, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED: 04.03.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.