Jagannath Banerjee, Bankura V. JCIT, Range-3, Bankura, Bankura

ITA 1835/KOL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1321 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 11-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR ACIT
• Assessee Lawyers: S M SURANA; D K SEN
• Keywords: Period of limitation; Reasonable cause; Time period of passing order
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENCH KOLKATA BEFORE SHRI A. T VARKEY, JM &DR. A.L.SAINI, AM ./ ITA NO.1835/KOL/2017 ( / ASSESSMENT YEAR: 2011-12 JAGANNATH BANERJEE MANDIHA, P.O: MEDINIPUR GRAM, DIST: BANKURA, PIN-722144 VS. JCIT, RANGE-3, BANKURA ./ ./PAN/GIR NO. : AJAPB 0295 K (APPELLANT) .. (RESPONDENT) APPELLANTBY : SHRI S.M. SURANA & D.K. SEN, ADV. RESPONDENT BY :SHRI SAURABH KUMAR, ACIT (DR) / DATE OF HEARING : 06/09/2017 /DATE OF PRONOUNCEMENT : 04/10/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAINING TO ASSESSMENT YEAR 2011-12, IS DIRECTED AGAINST AN ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX(APPEALS), DURGAPUR IN APPEAL NO.07/CIT(A)/DGP/2015-16 DATED, 22.06.2017, WHICH IN TURN ARISES OUT OF A PENALTY ORDER PASSED BY THE JT. CIT U/S 271D OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), DATED 11.03.2015. 2. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS AS UNDER: 1.FOR THAT THE ORDER PASSED U/S 271D BY THE LD. JOINT COMMISSIONER OF INCOME TAX IS ILLEGAL AND WITHOUT JURISDICTION AS THE ORDER IS BARRED BY LIMITATION AND VIOLATIVE OF THE PROVISION ENVISAGED U/S 271(1)(C) OF THE INCOME TAX ACT. 2.FOR THAT THE LD. JOINT COMMISSIONER OF INCOME TAX, IN CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ERRED IN IMPOSING PENALTY OF RS.16,00,000/- U/S 271D AS HE DID NOT DWELL UPON THE REASONABLE CAUSE OF FAILURE STATED BY THE APPELLANT. JAGANNATH BANERJEE ITA NO.1835/KOL/2017 ASSESSMENT YEAR: 2011-12 PAGE | 2 3.FOR THAT THE APPELLANT RESERVES ITS RIGHT TO ADD TO, TO ALTER AND/OR TO AMEND THE GROUND/S TAKEN AND ADDUCE PAPER/S AND DOCUMENT/S AT THE TIME OF HEARING. 3.THE BRIEF FACTS QUA THE ISSUE ARE THAT IN THE ASSESSEE`S CASE UNDER CONSIDERATION, THE ASSESSMENT WAS COMPLETED ASSESSMENT U/S 143(3) OF THE ACT, ON 17.03. 2014. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE INCOME TAX OFFICER OBSERVED THAT THE ASSESSEE HAD TAKEN LOAN IN CASH OF RS.8,00,000/- FROM SMT. MANGALA BANERJEE AND RS.8,00,000/- FROM KOUSIK BANERJEE, IN CONTRAVENTION OF PROVISIONS OF SECTION 269SS OF INCOME TAX ACT 1961. THE JT. CIT IMPOSED THE PENALTY U/S.271D BECAUSE THE AMOUNT OF LOAN WAS TAKEN BY THE ASSESSEE IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS READ WITH SECTION 271D AT RS.16,00,000/- (RS.8,00,000 +RS.8,00,000). THEREFORE, THE JT. CIT IMPOSED PENALTY U/S 269SS AT RS.16,00,000/-. THE JT. CIT ISSUED A SHOW CASUE NOTICE TO THE ASSESSEE ON 22.07.2014 ASKING THE ASSESSEE, THAT WHY THE PENALTY U/S 271D SHOULD NOT BE IMPOSED. THEREAFTER, THE JT. CIT ISSUED NOTICES ON 08.08.2014, 19.08.2014 AND 29.08.2014 BUT NONE APPEARED ON BEHALF OF THE ASSESSEE. SUBSEQUENTLY, ANOTHER DATE OF HEARING WAS FIXED BY THE JT. CIT ON 26.02.2015, NO RESPONSE TO THE SAID NOTICE. THE ASSESSED FILED ITS WRITTEN STATEMENT ON 25.02.2015 STATING REASONS THE LOAN SO TAKEN IN CASH. THE JT. CIT HAS PASSED THE PENALTY ORDER ON 11.03.2015. 4. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT IN THIS CASE, THE PENALTY PROCEEDINGS WERE INITIATED ON 22.07.2014 AND AS PER SECTION 275(1)(C) OF THE INCOME TAX ACT, PENALTY ORDER SHOULD HAVE BEEN MADE WITHIN SIX MONTHS, I.E. UP TO 31.01.2015. IN THIS CASE, THE PENALTY ORDER HAD BEEN MADE BY THE JT. CIT ON 11.03.2015, WHICH IS NOT A VALID PENALTY ORDER BECAUSE IT HAS BEEN FRAMED BY THE JT. CIT AFTER 6 MONTHS. IN THE ASSESSEE`S CASE UNDER CONSIDERATION, JAGANNATH BANERJEE ITA NO.1835/KOL/2017 ASSESSMENT YEAR: 2011-12 PAGE | 3 THE PENALTY ORDER U/S 271D MUST BE MADE ON OR BEFORE 31.01.2015. THAT IS, THE 6 MONTHS PERIOD SHOULD BE COUNTED FROM 22/07/2014 AND IT ELAPSED ON 31.01.2015, THEREFORE IT IS BEYOND THE TIME LIMIT PRESCRIBED U/S 275(1) (C ) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TOWARDS PROVISIONS OF SECTION 275(1)(C) OF THE INCOME TAX ACT WHICH READS AS UNDER: SEC.275 - BAR OF LIMITATION FOR IMPOSING PENALTIES (1)NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHALL BE 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. THEREFORE THE LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT THE IMPUGED PENALTY ORDER U/S 271D HAS BEEN MADE BY THE JT. CIT IN VIOLATION OF THE PROVISIONS OF SECTION 275 (1) ( C ) OF THE ACT BECAUSE IT HAD BEEN MADE BY JT. CIT AFTER SIX MONTHS FROM THE END OF THE MONTH IN WHICH NOTICE FOR INITIATION OF PENALTY WAS ISSUED. THEREFORE, LD COUNSEL REQUESTED THE BENCH TO QUASH THE PENALTY ORDER. 5. ON THE OTHER HAND, LD DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE JT. CIT, WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 6.HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT IN THIS CASE THE PENALTY ORDER WAS FRAMED BY THE JT. CIT ON 11.03.2015 WHEREAS PENALTY PROCEEDINGS WERE INITIATED BY HIM ON 22.07.2014. AS PER THE PROVISIONS OF SECTION 275(1)(C) OF THE I. T. ACT, THE JT. CIT IS SUPPOSED TO MAKE THE PENALTY ORDER WITHIN SIX MONTHS, THAT IS, UP TO 31.01.2015.IN THE ASSESSEE`S CASE UNDER CONSIDERATION, THE SIX MONTHS PERIOD ENDS ON 31.01.2015, WHEREAS THE JT. CIT MADE THE PENALTY ORDER ON 11.03.2015, THAT IS, AFTER THE JAGANNATH BANERJEE ITA NO.1835/KOL/2017 ASSESSMENT YEAR: 2011-12 PAGE | 4 LIMITATION PERIOD OF SIX MONTHS. THEREFORE, BASED ON THE FACTS NARRATED ABOVE, IT IS ABUNDANTLY CLEAR THAT IT IS A VIOLATION OF THE PROVISIONS OF SECTION 275(1)(C) OF THE ACT. THEREFORE, WE QUASH THE PENALTY ORDER. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE, IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 04 /10/2017 . SD/- (A. T. VARKEY) SD/- (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED 04/10/2017 RS,SPS / COPY OF THE ORDER FORWARDED TO : //TRUE COPY// BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. / THE APPELLANT JAGANNATH BANERJEE 2. / THE RESPONDENT- JCIT, RANGE-3, BANKURA 3. ( ) / THE CIT(A), :KOLKATA. 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. / GUARD FILE.