ITO, Rohtak V. Sh. Suresh Kumar, Jhajjar

ITA 1861/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5147 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 29-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Period of limitation; Question of law; Initiation of penalty proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 1861/DEL/2017 ASSESSMENT YEAR: 2009-10 ITO, WARD-4, VS. SH. SURESH KUMAR, AAYAKAR BHAWAN, ROHTAK S/O SH. NAFE SINGH, H.NO. 89, WARD NO. 28, GALI NO. 05, MAHABIR PARK, BAHADURGARH, JHAJJAR (PAN: ATSPK0784A) (APPELLANT) (RESPONDENT) REVENUE BY : SH. T. VASANTHAN, SR. DR. ASSESSEE BY : NONE ORDER THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDER DATED 24.1.2017 OF THE LD. CIT(A), ROHTAK PERTAINING TO A SSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS:- 1. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) IS RIGHT IN DELETING THE PENALTY OF RS. 20,00,000/- U/S 271D ON WRONG FACTS LE.'NO PENALTY WAS IMPOSED U/S 271E OF THE ACT WHICH GOES TO PROVE THAT LD. ADDL. CIT, ROHTAK RANGE, ROHTAK WAS SATISFIED THAT REPAYMENT IS CASH TO SISTER WAS NOT VIOLATION OF SECTION 269T { PARA 3 OF THE 2 CIT(A) ORDER}' WHILE PENALTIES U/S 271E &D WERE IMPOSED AND DULY ENTERED IN D&CR AT SERIAL NO. P-3 & 4. 2. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) IS RIGHT IN QUASHING THE ORDER OF IMPOSING PENALTY OF RS. 20,00,000/- U/S 271D ON THE GROUND OF LIMITATION OF INITIATION OF PENALTY WHEREAS LIMITATION FOR INITIATION OF PENALTY PROCEEDINGS HAS NOT BEEN PRESCRIBED FOR PENALTY ACTION AND LIMITATION FOR ASSESSMENT CASE NOT APPLY FOR PENALTY PROCEEDINGS AS. HELD IN DEWAN CHAND AMRIT LAL VS. DCIT (ITAT, SB-CHD) 9.8 ITD 200. 3. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) IS RIGHT IN DELETING THE PENALTY OF RS. 20,00,000/- U/S 271D ON THE CONTRADICTION OF FACTS WHEREIN AT ONE PLACE THE SHOW CAUSE NOTICE WAS MENTIONED TO BE ISSUED ON 05/07.05.2014 AND AT OTHER PLACE IT WAS MENTIONED TO BE ISSUED ON 28.04.2015 { PAGE NO. 02 OF THE C!T(A) ORDER} 4. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) IS RIGHT IN DELETING THE PENALTY OF RS. 20,00,000/- U/S 271D WITHOUT 3 ADJUDICATING THE THIRD GROUND OF APPEAL BEFORE HER THAT THE ORDER IS BARRED BY TIME. 2. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE YEAR ASSESSMENT YEAR 2009-10, IT WAS FOUND THAT THE ASSESSEE HAS RECEIVED IN CASH TH E AMOUNT OF RS. 20,00,000/- FROM HIS SISTER SMT. SANTOSH OTHER THAN BY ACCOUNT PAYEE CHEQUE/ DRAFT IN CONTRAVENTION OF PROVISIONS OF SECTION 269SS OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED A S THE ACT). ACCORDINGLY, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE VIDE LETTER DATED 10/11.12.2014, WHICH WAS SERVED ON THE ASSESSEE ON 15.12.2014. IN SPITE OF OPPORTUNITY GIVEN TO THE AS SESSEE TO PRESENT HIS EXPLANATIONS, HE HAS NOT ATTENDED NOR SUBMITTED HIS RELY. HENCE, IT WAS PRESUMED THAT THE ASSESSEE HAS NO EXPLANATIO N TO OFFER. THUS, PENALTY EQUAL TO THE SAID AMOUNT OF RS. 20,00,000/- (RUPEES TWENTY LACS ONLY) WAS IMPOSED ON THE ASSESSEE VIDE ORDER D ATED 28.4.2015- 1/5/2015 PASSED U/S. 271D OF THE ACT. AGAINST THE AFORESAID PENALTY ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 24.1.2017 HAS DELETED THE PENA LTY IN DISPUTE AND ALLOWED THE APPEAL OF THE ASSESSEE. 3. AGGRIEVED WITH IMPUGNED ORDER DATED 24.1.2017, R EVENUE FILED AN APPEAL BEFORE THE TRIBUNAL. 4. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL FILED BY THE REVENUE. 4 5. IN THIS CASE, NOTICE OF HEARING TO THE ASSESSEE WAS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESSEE, NOR HIS AUTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FILED ANY APPLICATION FOR ADJOURNMENT . KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AN D THE ISSUE INVOLVED IN THE PRESENT APPEAL, I AM OF THE VIEW TH AT NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND A GAIN TO THE ASSESSEE, THEREFORE, I AM DECIDING THE PRESENT APP EAL EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 6. I HAVE HEARD LD. DR AND PERUSED THE RECORDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, ESPECIALLY THE CONTENTION RAISED IN THE ORIGINAL GROUNDS OF APPEAL FILED BY THE REVE NUE. I FIND THAT THE LD. CIT(A) HAS ELABORATELY DISCUSSED THE ISSUE IN D ISPUTE AT PAGE NO. 2 TO 4 OF HIS IMPUGNED ORDER. FOR THE SAKE OF CONV ENIENCE, THE RELEVANT PARAGRAPHS ARE REPRODUCED AS UNDER:- THE 2ND GROUND OF APPEAL IS AGAINST IS AGAINST NON ISSUING OF SHOW CAUSE NOTICE DURING ASSESSMENT PROCEEDINGS. THE 1ST NOTICE WAS ISSUED BY THE AO ON 05/07.05.2014 WHERE AS THE ASSESSMENT WAS COMPLETED ON 30.11.2011. THE PENALTY NOTICE SHOULD BE ISSUED DURING THE PENDENCY OF ASSESSMENT PROCEEDINGS. THE HON'BLE ITAT MUMBAI BENCH IN THE CASE OF KESHU RAMS AY VS JCIT REPORTED AT 5 SOT 9 HAS HELD AS 'WHERE NO PROCEEDINGS RELEVANT TO THAT ASSESSMENT YEAR IS PEN DING WHEN PENALTY NOTICE WAS ISSUED, IS BAD IN LAW' IN V IEW OF ABOVE THE PENALTY NOTICE ISSUED AFTER COMPLETION OF 5 ASSESSMENT PROCEEDINGS MAY BE HELD AS ILLEGAL BY YO UR GOOD SELF. THE ASSESSMENT ORDER IN THIS CASE WAS PASSED ON 30.11.2011. NO NOTICE U/S. 271 D WAS ISSUED DURING THE PENDENCY OF THE PROCEEDINGS. THE SHOW CAUSE NOTICE WAS ISSUED ONLY ON 28.04.2015. HENCE THE ORDER IS IN- FRUCTUOUS AND I QUASH THE SAME. THIS GROUND OF APPE AL IS ALLOWED. THE 3RD GROUND OF APPEAL IS AGAINST LEGALITY OF ORDER PASSED FOR IMPOSITION OF PENALTY U/S 271D. TH E ORDER UNDER APPEAL IS BEING TIME BARRED AS PASSED A FTER 6 MONTHS FROM ISSUE OF 1ST NOTICE WHICH WAS ISSUED ON 05/07.05.2014 AND AS SUCH ORDER SHOULD HAVE BEEN PASSED WITHIN 6 MONTHS I.E. UPTO 30.11.2014 WHEREAS THE ORDER UNDER APPEAL WAS PASSED ON 28.04.2015. THUS IT IS CLEAR THAT ORDER WAS PASSED AFTER 11 MONTHS, WHICH WAS TO BE PASSED WITHIN 6 MONTHS. SEC. 275(I)(C) OF THE ACT IS REPRODUCED HERE UNDER FOR READY REFERENCE :- 275(1)(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. THE HON'BLE HIGH COURT OF RAJASTHAN IN THE CASE OF COMMISSIONER OF INCOME-TAX, UDAIPUR VS JITENDRA SIN GH RATHORE IN IT APPEAL NO. 90 OF 2007 HAS HELD AS UND ER:- IN VIEW OF THE ABOVE, OUR ANSWER TO THE FORMULATED QUESTION OF LAW IS THAT EVEN WHEN THE AUTHORITY COMPETENT TO IMPOSE PENALTY 6 UNDER SECTION 271D WAS THE JOINT COMMISSIONER, THE PERIOD OF LIMITATION FOR THE PURPOSE OF SUCH PENALTY PROCEEDINGS WAS NOT TO BE RECKONED FORM THE ISSUE OF FIRST SHOW CAUSE BY THE JOINT COMMISSIONER; BUT THE PERIOD OF LIMITATION WAS TO BE RECKONED FROM THE DATE OF ISSUE OF FIRST SHOW CAUSE FOR INITIATION OF SUCH PENALTY PROCEEDINGS. FOR THE PURPOSE OF PRESENT CASE, AS OBSERVED HEREINABOVE, FOR THE PROCEEDINGS HAVING BEEN INITIATED ON 25.03.2003, THE ORDER PASSED BY THE JOINT COMMISSIONER UNDER SECTION 271D ON 28.05.2004 WAS HIT BY THE BAR OF LIMITATION. THUS, IT IS VERY MUCH CLEAR THAT THE ORDER IMPOSING THE PENALTY IS OUT OF TIME AND AS SUCH YOUR GOOD SE LF IS PRAYED TO PLEASE DELETE THE PENALTY. IN VIEW OF THE DECISION IN GROUND NO.2, NO ADJUDICATION IS REQUIRED HERE. THE 4TH GROUND OF APPEAL IS AGAINST IMPOSING THE PENALTY OF RS. 20 LACS U/S 271D OF THE ACT BY TREAT ING THE AMOUNT RECEIVED AS AMMANAT AS ACCEPTING LOAN IN VIOLATION OF SEC. 269SS OF THE ACT. THE APPELLANT H AD RECEIVED THE SAID AMOUNT AS AMMANAT FROM HIS SISTER WHICH WAS DULY ACCEPTED BY HER BEFORE THE AO IN HER STATEMENT RECORDED BY THE AO DURING THE COURSE OF ASSESSMENT AND WAS ALSO DULY EXPLAINED IN COMPLIANC E TO SHOW CAUSE NOTICE ISSUED U/S 271D & 271E BY THE AO. THE AMOUNT WAS RECEIVED AS AMMANAT AND DULY BEEN GIVEN BACK TO THE SISTER. THE AMOUNT RECEIVED AS AMMANAT CANNOT BE TREATED AS ACCEPTANCE OF LOAN. TH E HON'BLE P&H HIGH COURT IN THE CASE OF JAGBIR SINGH BALRAJ 7 KUMAR & CO. VS CIT REPORTED AT 32 INDIAN TAXATION REPORTS 422 HAS HELD AS 'AMOUNT RECEIVED AS AMMANAT - NO PENALTY'. IN ANOTHER CASE OF G.D. SABHRAYA SHEREGUR VS ITO REPORTED AT 10 SOT 378 THE HON'BLE BANGALORE ITAT H AS HELD AS (TRANSACTION BETWEEN CLOSELY RELATED PERSON S SUCH AS FATHER AND SON WOULD FALL OUTSIDE SCOPE OF SECTION 269SS.' IN THE CASE OF THE APPELLANT THE TRANSACTION IS BETWEEN BROTHER AND SISTER WHICH IS ALSO A CLOSE RE LATION. IN VIEW OF ABOVE, YOUR GOOD SELF IS PRAYED TO PLEAS E DELETE THE PENALTY IMPOSED BY THE LD ADDL. CIT ROHT AK RANGE, ROHTAK. IN VIEW OF THE DECISION IN GROUND NO.2, NO FURTHE R ADJUDICATION IS REQUIRED ON THIS ISSUE. 4. IN THE RESULT, THE APPEAL IS ALLOWED. 6.1 AFTER GOING THROUGH THE AFORESAID FINDING OF TH E LD. CIT(A), I FIND THAT IN THIS CASE ASSESSMENT ORDER WAS PASSED ON 30.11.2011 AND THE AO HAS NOT ISSUED ANY NOTICE TO THE ASSESSE E U/S. 271D OF THE I.T. ACT, 1961 DURING THE PENDENCY OF THE ASSES SMENT PROCEEDINGS. THE SHOW CAUSE NOTICE WAS ISSUED ONLY ON 28.04.2015 , THEREFORE, THE PENALTY IN DISPUTE WAS RIGHTLY QUASH ED BY THE LD. CIT(A) BY RESPECTFULLY FOLLOWING THE ORDER OF THE I TAT, MUMBAI BENCH IN THE CASE OF KESHU RAMSAY VS JCIT REPORTED AT 5 S OT 9 WHEREIN, IT HAS BEEN HELD THAT 'WHERE NO PROCEEDINGS RELEVANT TO THAT ASSESSMENT YEAR IS PENDING WHEN PENALTY NOTICE WAS ISSUED, IS BAD IN LAW. IN VIEW OF ABOVE THE PENALTY NOTICE ISSUED AFT ER COMPLETION OF ASSESSMENT PROCEEDINGS MAY BE HELD AS ILLEGAL BY YO UR GOOD SELF. 8 AFTER GOING THROUGH THE IMPUGNED ORDER, I AM OF THE VIEW THAT LD. CIT(A) HAS PASSED A WELL REASONED ORDER, WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART, HENCE, I UPHOLD THE DECISI ON OF THE LD. CIT(A). SINCE I HAVE ALREADY UPHELD THE ACTION OF THE LD. C IT(A) ON QUASHING THE PENALTY ORDER, AS AFORESAID, THE PENAL TY IN DISPUTE DOES NOT SURVIVE. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 17-08-2017. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED :17-08-2017 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.