ITO,Ward-7(3),Kolkata, Kolkata V. M/s Kedia Power Ltd., Kolkata

ITA 1516/KOL/2008

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4465 (ITAT-KOLKATA)
• Duration Of Justice: 7 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 1999-2000
• Appeal Filed On: 07-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALLONG YADEN ACIT SRDR
• Assessee Lawyers: S JHAJHARIA
• Keywords: Period of limitation; Time period of passing order
• Section: 143(3); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1516/KOL/2008 ASSESSMENT YEAR:1999-00 ITO WARD-7(3), P-7, CHOWRINGHEE SQUARE, 5 TH FLOOR, KOLKATA-69 / V/S . M/S KEDIA POWER LTD., 42A SHAKESPEARE SARANI, 6B EXPRESS TOWER, KOLKATA-700 017 [ PAN NO.AABCK 3364 R ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SALLONG YADEN, ACIT-SR-DR /BY RESPONDENT SHRI S.JHAJHARIA, FCA /DATE OF HEARING 13-06-2016 /DATE OF PRONOUNCEMENT 15-07-2016 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-VIII, KOLKATA DATED 21.05.2008 . ASSESSMENT WAS FRAMED BY ITO WARD-7(3), KOLKATA U/S 143(3)/147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 19.02.2004 FOR ASSESSMENT YEAR 1999-00. PENALTY LEVIED BY ACIT, RA NGE-7, KOLKATA U/S 271D OF THE ACT VIDE HIS ORDER DATED 29.03.2007. ITA NO.1516/KOL/2008 A.Y. 1999-00 ITO WD-7(3) KOL. V. M/S KEDIA POWER LTD. PAGE 2 SHRI S JHAJHARIA, LD. AUTHORIZED REPRESENTATIVE APP EARED ON BEHALF OF ASSESSEE AND SHRI SALLONG YADEN, LD DEPARTMENTAL R EPRESENTATIVE APPEARED ON BEHALF OF REVENUE. 2. THE ISSUE BEFORE US IS ARISING OUT OF DIRECTION ISSUED BY HON'BLE SUPREME COURT IN SPECIAL LEAVE APPEAL NO(S) 18759/2 011 FOR ADJUDICATION OF THE FOLLOWING POINTS, WHICH ARE REPRODUCED BELOW:- (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE INCOME TAX APPELLATE TRIBUNAL FAILED TO APPRECIATE THAT THE PERIOD OF LIMITATION IN THE INSTANT CASE IS GOVERNED BY THE P ROVISIONS OF SECTION 275() AS THE PENALTY WAS INITIATED IN THE ASSESSMEN T ORDER ITSELF AND THE PENALTY ORDER WAS ISSUED WITHIN TIME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 275(1)(A) OF THE INCOME TAX ACT, 1961? (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE INCOME TAX APPELLATE TRIBUNAL WAS JUSTIFIED IN COMI NG TO THE CONCLUSION THAT THE ORDER OF PENALTY WAS BARRED UNDER PROVISIO NS OF SECTION 275(1)(C) AND FAILED TO CONSIDER THAT PENALTY WAS I NITIATED IN THE ASSESSMENT ORDER ITSELF AND THE SAME WAS ISSUED WIT HIN TIME AND IN ACCORDANCE WITH SECTION 275(1)(A) OF THE INCOME TAX ACT, 1961? IN COMPLIANCE TO THE ABOVE DIRECTION OF HON'BLE SUP REME COURT WE HAVE TO ADJUDICATE WHETHER THE PENALTY ORDER PASSED BY ACIT , RANGE-7 KOLKATA U/S 271D OF THE ACT IS COVERED U/S 271)(1)(A) OR 271(C) OF THE ACT. 3. AT THE OUTSET LD. AR HAS BROUGHT THE CIRCULAR NO. 10 OF 2016 DATED 26.04.2016 ISSUED BY CENTRAL BOARD OF DIRECT TAXES, WHICH IS REPRODUCED BELOW:- THE ISSUE WHETHER THE LIMITATION FOR IMPOSITION OF PENALTY UNDER SECTIONS 271D AND 271E OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) IS DETERMINED UNDER SECTION 275(1)(A) OR SECTION 275(1)(C) OF THE ACT, HAS GIVEN RISE TO CONSIDERABL E LITIGATION. 2. THE HON'BLE DELHI HIGH COURT IN THE CASE OF COM MISSIONER OF INCOME TAX VS. WORLDWIDE TOWNSHIP PROJECT LTD, VIDE ITS OR DER DATED 21.5.14 IN ITA NO.232/2014, CONSIDERED THE ISSUE AND OBSERVED THAT, IT IS WELL SETTLED THAT A PENALTY UNDER THIS PROVISION IS INDE PENDENT OF THE ASSESSMENT. THE ACTION INVITING IMPOSITION OF PENAL TY IS GRANTING OF LOANS ABOVE THE PRESCRIBED LIMIT OTHERWISE THAN THR OUGH BANKING ITA NO.1516/KOL/2008 A.Y. 1999-00 ITO WD-7(3) KOL. V. M/S KEDIA POWER LTD. PAGE 3 CHANNELS AND AS SUCH INFRINGEMENT OF SECTION 269SS OF THE ACT IS NOT RELATED TO THE INCOME THAT MAY BE ASSESSED OR FINAL LY ADJUDICATED. IN THIS VIEW SECTION 275(1)(A) OF THE ACT WOULD NOT BE APPLICABLE AND THE PROVISIONS OF SECTION 275(1)(C) WOULD BE ATTRACTED. THE JUDGMENT HAS BEEN ACCEPTED BY THE CENTRAL BOARD OF DIRECT TAXES. 3. IN VIEW OF THE ABOVE, IT IS SETTLED POSITION THA T THE PERIOD OF LIMITATION OF PENALTY PROCEEDINGS UNDER SECTION 271D AND 271E OF THE ACT IS GOVERNED BY THE PROVISIONS OF SECTION 275(1)(C) OF THE ACT. THEREFORE, THE LIMITATION PERIOD FOR THE IMPOSITION OF PENALTY UNDER THESE PROVISIONS WOULD BE THE EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALT Y HAS BEEN INITIATED, ARE COMPLETED, OR SIX MONTHS FROM THE END OF THE MO NTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED, WHICHEVER P ERIOD EXPIRES LATER. THE LIMITATION PERIOD IS NOT DEPENDENT ON THE PENDENCY OF APPEAL AGAINST THE ASSESSMENT OR OTHER ORDER REFERRED TO IN SECTION 27 5(1)(A) OF THE ACT. 4. ACCORDINGLY, NO APPEALS MAY HENCEFORTH BE FILED ON THIS GROUND BY THE OFFICERS OF THE DEPARTMENT AND APPEALS ALREADY FILED, IF ANY, ON THIS ISSUE BEFORE VARIOUS COURTS/TRIBUNALS MAY NOT BE PR ESSED UPON. NOW FROM THE ABOVE PROVISION, IT IS CLEAR THAT PENA LTY ORDER PASSED U/S 271D OF THE ACT IS DULY COVERED U/S 275(1)(C) OF THE ACT 4. COMING TO THE FACTS OF THE CASE, THE ASSESSMENT ORDER WAS PASSED U/S. 143(3) R.W.S 147 OF THE ACT ON DATED 19.02.2004. NO W, IT IS CLEAR THAT PENALTY U/S. 271D OF THE ACT IS GOVERNED BY PROVISION OF SE C. 275(1)(C), WHICH IS READS AS UNDER:- [BAR OF LIMITATION FOR IMPOSING PENALTIES. 275.[(1) NO ORDER IMPOSING A PENALTY UNDER THIS CHA PTER SHALL BE PASSED- [(A). (B) . (C) IN ANY OTHER CASE, AFTER THE EXPIRY OF THE FINA NCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE CURSE OF WHICH ACTION FOR T HE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED, OR SIX M ONTHS FROM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED, WHICHEVER PERIOD EXPIRES LATER,] FROM THE PROVISION OF ABOVE SEC.275(1)(C) WE FIND T HAT PENALTY ORDER CAN BE PASSED AFTER THE EXPIRY OF FINANCIAL YEAR IN WHICH THE PROCEEDINGS FOR ITA NO.1516/KOL/2008 A.Y. 1999-00 ITO WD-7(3) KOL. V. M/S KEDIA POWER LTD. PAGE 4 IMPOSITION OF PENALTY HAS BEEN INITIATED ARE COMPLE TED OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH ACTION OF IMPOSITION OF P ENALTY IS INITIATED, WHICHEVER PERIOD OF EXPIRES LATER. IN THE INSTANT CASE, THE P ROCEEDINGS FOR ASSESSMENT WAS COMPLETED ON 19.02.2004 AND THEREFORE THE TIME AVAILABLE FOR MAKING THE PENALTY ORDER IS EITHER UPTO 31.03.2004 OR 31-8-200 4 WHICHEVER EXPIRES LATER AS THE CASE MAY BE. BUT IN THE PRESENT CASE PENALTY ORDER HAS BEEN PASSED BY ACIT, RANGE-7, KOLKATA ON 29.03.2007 WHICH IS BA RRED BY LIMITATION IN TERMS OF PROVISION AS STATED ABOVE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DISMISS THE REVENUES GROUND. 5. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 15/07/2016 SD/- SD/- (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP ! - 15/07/2016 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO WARD-7(3), P-7, CHOWRINGHEE SQR, 5 TH FL, KOL-69 2. /RESPONDENT-M/S KEDIA POWER LTD. 42A, SHAKESPEARE S ARANI, 6B EXPRESS TOWER, KOLKATA -700 017 3. '# % / CONCERNED CIT 4. % - / CIT (A) 5. &'( ))'# , '# / DR, ITAT, KOLKATA 6. (*+ / GUARD FILE. BY ORD ER/ , /TRUE COPY/ / '#,