R.P.Darmalingam, CHENNAI V. ACIT Central Circle 2(2), CHENNAI

ITA 1846/CHNY/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1989 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 31-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V S SREELEKHA CIT D R
• Assessee Lawyers: MOHANDAS
• Keywords: Non-deduction of tax
• Section: 63

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1846/CHNY/2018 / ASSESSMENT YEAR : 2012-13 MR.R.P.DHARMALINGAM , PLOT NO.1379, DOOR NO.15C,GOLDEN VILLA, 6 TH STREET,I BLOK, 18 TH MAIN ROAD, VALLALAR KUDIYERUPPU, ANNA NAGAR WEST, CHENNAI 600 040. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(2), CHENNAI. [PAN AEAPD 7363 R ] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : MR.MOHANDAS, C.A $% ! ' # /RESPONDENT BY : MS.V.S.SREELEKHA, CIT, D.R & ' ' () / DATE OF HEARING : 15 - 11 - 201 8 * ' () / DATE OF PRONOUNCEMENT : 15 - 11 - 201 8 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME-TAX(CENTRAL)- 2,CHENNAI IN C. ITA NO. 1846/CHNY/2018 :- 2 -: NO.2744/C-2/2016-17/31 DATED 27.03.2018 FOR THE AS SESSMENT YEAR 2012-13. 2. MR.MOHANDAS REPRESENTED ON BEHALF THE OF THE ASSESSEE AND MS.V.S.SREELEKHA REPRESENTED ON BEHALF THE OF THE REVENUE. 3. IT WAS SUBMITTED BY LD.A.R THAT THE ASSESSEE IS AN INDIVIDUAL, WHO IS DOING REAL ESTATE BUSINESS. CONSEQUENT TO SE ARCH AND SEIZURE OPERATION ON THE ASSESSEE 03.09.2013, THE ASSESSMEN T CAME TO BE PASSED U/S.143(3) R.W.S.153A OF THE ACT ON 31.03.20 16 WHEREIN THE RETURNED INCOME OF THE ASSESSEE HAD BEEN ACCEPTED. IT WAS A SUBMISSION THAT ASSESSMENT YEAR INVOLVED IS 2012-13 AND THE RETURN FILED ON 20.11.2015IN RESPONSE TO THE NOTICE U/S.1 53A WAS THE FIRST RETURN FILED. THE ASSESSMENT CAME TO BE COMPLETED O N 31.03.2016 AND PENALTY PROCEEDINGS INITIATED U/S.271(1)(C) OF THE ACT WAS ALSO INITIATED SIMULTANEOUSLY. IT WAS A SUBMISSION THAT THE ASSES SEE HAD RESPONDED TO THE PENALTY PROCEEDINGS AND THE LD. ASSESSING OF FICER HAD DROPPED THE PENALTY PROCEEDINGS AFTER CONSIDERING THE EXPL ANATION FILED BY THE ASSESSEE. IT WAS A SUBMISSION THAT THE DROPPING OF THE PENALTY PROCEEDINGS BY THE LD. ASSESSING OFFICER IN THE ORD ER SHEET NOTING IS EXTRACTED AT PARA 5.1. OF THE ORDER OF THE PR.CIT U /S.263 OF THE ACT. IT WAS A SUBMISSION THAT THE LD. PRINCIPAL COMMISSIONE R OF INCOME TAX ITA NO. 1846/CHNY/2018 :- 3 -: HAD ISSUED A SHOW CAUSE NOTICE U/S.263 DATED 09.03 .2018 ASKING THE ASSESSEE WHY THE DROPPING OF THE PENALTY PROCEEDING S INITIATED BY LD. ASSESSING OFFICER IN ASSESSEES CASE SHOULD NOT BE REVISED. THE ASSESSEE HAD REPLIED VIDE LETTER DATED 20.03.2018. IT WAS A SUBMISSION THAT THE REPLY OF ASSESSEE WAS NOT CONSI DERED AND THE LD. PRINCIPAL COMMISSIONER OF INCOME TAX PASSED AN ORDE R DATED 27.03.2018 DIRECTING THE LD. ASSESSING OFFICER TO R E-DO THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S.153A DENOVO. IT WAS A FURTHER SUBMISSION THAT SUBSEQUENTLY ON 29.03.2018 A CORRIG ENDUM WAS ISSUED WHEREIN IT HAS BEEN HELD THAT THE DROPPING OF THE P ENALTY PROCEEDINGS INITIATED U/S.263 OF THE ACT ON 31.03.2016 IN THE CASE OF THE ASSESSEE HAS BEEN HELD TO BE ERRONEOUS AND PREJUDICIAL TO TH E INTERESTS OF THE REVENUE AND THE SAME WAS SET-ASIDE. THE ORDER OF A SSESSMENT U/S.143(3) R.W.S.153A OF THE ACT WAS NOT DISTURBED. IT WAS A PRAYER THAT THE ORDER PASSED U/S.263 IS LIABLE TO BE ANNUL LED. 4. IN REPLY, THE LD.D.R VEHEMENTLY SUPPORTED THE O RDER OF PRINCIPAL COMMISSIONER OF INCOME TAX PASSED U/S.263 OF THE ACT. IT WAS A SUBMISSION THAT THE DROPPING OF THE PENALTY P ROCEEDINGS WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. THE LD.D.R PLACED RELIANCE ON THE DECISION OF THE HONBLE SUPR EME COURT IN THE ITA NO. 1846/CHNY/2018 :- 4 -: CASE OF TOYOTA MOTOR CORPORATION REPORTED IN 306 IT R 52 SC WHEREIN IN RESPECT OF FAILURE TO DEDUCT TAX AT SOURCE, THE LD. ASSESSING OFFICER HAD INITIATED PENALTY PROCEEDINGS, BUT HAD DROPPED THEM WITHOUT GIVING DETAILED REASONS, THEN THE COMMISSIONER OF I NCOME TAX HAD INVOKED THE POWER OF REVISION AND HAD DIRECTED THE LD. ASSESSING OFFICER TO PASS REASONED ORDER. THE HONBLE SUPREME COURT HAD UPHELD THE ORDER U/S.263 AND DIRECTED THAT THE ORDER WAS VALID IN SO FAR AS IT WAS THE DUTY OF THE LD. ASSESSING OFFICER TO TAKE A LL FACTS INTO ACCOUNT AND PASS A REASONED ORDER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT T HE OUTSET, THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F TOYOTA MOTOR CORPORATION VS. CIT REFERRED TO SUPRA, IS ON COMPLE TELY DIFFERENT FOOTING. THAT WAS THE CASE WHERE PENALTY U/S.271C WAS INVOLVED, AND THAT WAS THE CASE OF FAILURE TO DEDUCT TAX AT SOURC E. IN THE PRESENT CASE, THE ISSUE IS OF CONCEALED INCOME. IT IS AN IS SUE RELATING TO PENALTY LEVIED U/S.271(1)(C) OF THE ACT. PROVISIONS OF THE SECTION 271(1)(C) OF THE ACT REQUIRES THE INITIATION OF PENALTY PROCEEDI NGS IN THE COURSE OF ASSESSMENT PROCEEDINGS, AND IT IS CLEARLY ON THE S ATISFACTION OF THE PERSON, WHO HAS PASSED THE ASSESSMENT ORDER, OR PER SON WHO HAS IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT IS SATI SFIED THAT ANY ITA NO. 1846/CHNY/2018 :- 5 -: PERSON, HAS CONCEALED ITS INCOME. THE TIME LIMIT FO R THE IMPOSING PENALTY U/S.271(1)(C) OF THE ACT IS PRESCRIBED IN 2 75(1) OF THE ACT. SECTION 271C IS NOT A PENALTY WHICH IS INITIATED IN THE COURSE OF ANY PROCEEDINGS. THERE IS NO TIME LIMIT FOR INITIATION OF PENALTY U/S.271C OF THE ACT. THE LIMITATION OF SEC.275(1) OF THE ACT I N RESPECT OF SEC.271C OF THE ACT WOULD START, WHEN THE ACTION FOR THE IMP OSITION OF THE PENALTY IS INITIATED. HERE, IN THE PRESENT CASE, TH E ACTION FOR INITIATION OF THE PENALTY U/S.271(1)(C) OF THE ACT HAD BEEN I NITIATED IN THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF U/S.143(3) R.W.S.153A OF THE ACT ON 31.03.2016. THUS, THE TIME LIMIT FOR LEVY OF PENALTY U/S.271(1)(C) OF THE ACT WOULD EXPIRE IN THE PRESE NT CASE ON 31.09.2016, BEING 6 MONTHS FROM THE END OF THE MONT H IN WHICH THE PENALTY PROCEEDINGS HAS BEEN INITIATED. NOW, AFTER THE EXPIRY OF SAID LIMITATION, THE LD. PRINCIPAL COMMISSIONER OF INCOM E TAX HAS ISSUED THE SHOW CAUSE NOTICE ON 09.03.2018 FOR REVIVING THE PE NALTY PROCEEDINGS, WHICH WAS ALREADY EXPIRED AND BARRED BY LIMITATION. TRUE, THE ORDER PASSED BY THE LD. ASSESSING OFFICER DROPPING THE PE NALTY PROCEEDINGS IS AN UNSPEAKING ORDER, BUT STILL, THAT WOULD NOT MAKE IT VALID REASON FOR EXTENDING THE LIMITATION PROVIDED U/S.275 OF THE AC T FOR THE PURPOSE OF LEVYING THE PENALTY OR FOR CONSIDERING THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT BY INVOKING THE POWERS OF REVISION U/S.2 63 OF THE ACT. IN THE ITA NO. 1846/CHNY/2018 :- 6 -: CIRCUMSTANCES, THE ORDER PASSED U/S.263 OF THE ACT BEING UNSUSTAINABLE IN LAW STANDS QUASHED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 15 TH , NOVEMBER, 2018, AT CHENNAI. SD/ - SD/ - ( . ) (A.MOHAN ALANKAMONY) ! '# / ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) $ '# / JUDICIAL MEMBER - ' / CHENNAI . / DATED: 15.11.2018. K S SUNDARAM / ' $(01 2 1( / COPY TO: 1 . ! / APPELLANT 4. & 3( / CIT 2. $% ! / RESPONDENT 5. 145 $(6 / DR 3. & 3( () / CIT(A) 6. 57 8' / GF