M/s. Modipon Ltd., Ghaziabad V. Addl. CIT (TDS), Ghaziabad

ITA 1979/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7850 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 06-04-2016
• Assessment Year: misc
• Appeal Filed On: 30-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA SENIOR
• Assessee Lawyers: SANTOSH KUMAR AGGARWAL
• Keywords: Rectification of order; Period of limitation; Question of law; Initiation of penalty proceedings; Competent authority
• Section: 201(1); 246; 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT AND AND AND AND MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO S SS S . .. . 1897/DEL/2012, 1978/DEL/2012 & 1979/DEL/2012 1897/DEL/2012, 1978/DEL/2012 & 1979/DEL/2012 1897/DEL/2012, 1978/DEL/2012 & 1979/DEL/2012 1897/DEL/2012, 1978/DEL/2012 & 1979/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR S SS S : : : : 2006 2006 2006 2006 - -- - 07, 2007 07, 2007 07, 2007 07, 2007 - -- - 08 & 2008 08 & 2008 08 & 2008 08 & 2008 - -- - 09 0909 09 M/ M/M/ M/ S MODIPON LIMITED, S MODIPON LIMITED, S MODIPON LIMITED, S MODIPON LIMITED, MODINAGAR, MODINAGAR, MODINAGAR, MODINAGAR, GHAZIABAD, U.P. GHAZIABAD, U.P. GHAZIABAD, U.P. GHAZIABAD, U.P. PIN : 201 204. PIN : 201 204. PIN : 201 204. PIN : 201 204. PAN : AAACM2069E. PAN : AAACM2069E. PAN : AAACM2069E. PAN : AAACM2069E. VS. VS. VS. VS. ADDITIONAL COMMISSIONER OF ADDITIONAL COMMISSIONER OF ADDITIONAL COMMISSIONER OF ADDITIONAL COMMISSIONER OF INCOME TAX (TDS), INCOME TAX (TDS), INCOME TAX (TDS), INCOME TAX (TDS), GHAZIABAD, GHAZIABAD, GHAZIABAD, GHAZIABAD, U.P. U.P. U.P. U.P. (APPELLANT) (RESPONDENT) ITA NO ITA NO ITA NO ITA NO S.827/DEL/2015, 828/DEL/2015 & 829/DEL/2015 S.827/DEL/2015, 828/DEL/2015 & 829/DEL/2015 S.827/DEL/2015, 828/DEL/2015 & 829/DEL/2015 S.827/DEL/2015, 828/DEL/2015 & 829/DEL/2015 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR S SS S : :: : 2006 2006 2006 2006 - -- - 07, 2007 07, 2007 07, 2007 07, 2007 - -- - 08 & 2008 08 & 2008 08 & 2008 08 & 2008 - -- - 09 0909 09 M/S MODIPON LIMITED, M/S MODIPON LIMITED, M/S MODIPON LIMITED, M/S MODIPON LIMITED, MODINAGAR, MODINAGAR, MODINAGAR, MODINAGAR, GHAZIABAD, U.P. GHAZIABAD, U.P. GHAZIABAD, U.P. GHAZIABAD, U.P. PIN : 201 204. PIN : 201 204. PIN : 201 204. PIN : 201 204. PAN : AAACM2069E. PAN : AAACM2069E. PAN : AAACM2069E. PAN : AAACM2069E. VS. VS. VS. VS. ADDITIONAL COMMISSIONER OF ADDITIONAL COMMISSIONER OF ADDITIONAL COMMISSIONER OF ADDITIONAL COMMISSIONER OF INCOME TAX (TDS), INCOME TAX (TDS), INCOME TAX (TDS), INCOME TAX (TDS), GHAZIABAD, GHAZIABAD, GHAZIABAD, GHAZIABAD, U.P. U.P. U.P. U.P. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANTOSH KUMAR A GGARWAL, ADVOCATE. RESPONDENT BY : SHRI P. DAM KANUNJNA, SENIOR DR. DATE OF HEARING : 06.04.2016 06.04.2016 06.04.2016 06.04.2016 DATE OF PRONOUNCEMENT : 26.04.2016 26.04.2016 26.04.2016 26.04.2016 ORDER ORDER ORDER ORDER PER BENCH PER BENCH PER BENCH PER BENCH : :: :- -- - ITA NOS.827 TO 829/DEL/2015 : ITA NOS.827 TO 829/DEL/2015 : ITA NOS.827 TO 829/DEL/2015 : ITA NOS.827 TO 829/DEL/2015 :- -- - THESE APPEALS BY THE ASSESSEE FOR THE ASSESSMENT Y EARS 2006- 07, 2007-08 & 2008-09 ARE DIRECTED AGAINST THE ORDE R OF LEARNED CIT(A), GHAZIABAD DATED 8 TH DECEMBER, 2014. ITA-1897/D/2012 & 5 OTHERS 2 2. ALL THESE APPEALS HAVE ORIGINATED FROM THE ORDER U/S 154 OF THE INCOME-TAX ACT, 1961 DATED 30 TH MARCH, 2013 BY WHICH THE ASSESSING OFFICER HAS REJECTED THE ASSESSEES APPLICATION FOR RECTIFICATION OF THE ORDER PASSED U/S 201(1) AND 201(1A) OF THE ACT. 3. AT THE TIME OF HEARING BEFORE US, IT WAS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT SUBSEQUENTLY, THE ASSESSING OFFICER HAS RECTIFIED THE ORDER PASSED U/S 201(1)/2 01(1A) VIDE HIS ORDER DATED 30 TH APRIL, 2015 PASSED U/S 154 OF THE IT ACT. IN THE SAID ORDER, THE ASSESSING OFFICER HAS PARTIALLY ACCEPTED THE AS SESSEES CONTENTION BUT STILL REJECTED SOME OF THE ASSESSEES CONTENTIO NS. HE POINTED OUT THAT THE ASSESSEE IS IN APPEAL AGAINST THE ORDER U/ S 154 DATED 30 TH APRIL, 2015. IN VIEW OF THE ABOVE, IT IS SUGGESTED BY THE LEARNED COUNSEL THAT THE ORDER OF LEARNED CIT(A) FOR ALL TH E THREE YEARS WHERE HE HAS UPHELD THE ORDER OF THE ASSESSING OFFICER RE JECTING ASSESSEES APPLICATION U/S 154 SHOULD BE SET ASIDE AND TO REST ORE THE MATTER TO THE FILE OF THE CIT(A) TO BE ADJUDICATED ALONG WITH THE APPEAL FILED AGAINST THE ORDER OF THE ASSESSING OFFICER DATED 30 TH APRIL, 2015 PASSED U/S 154. 4. LEARNED DR, ON THE OTHER HAND, STATED THAT THE I MPUGNED APPEAL OF THE ASSESSEE HAS BECOME INFRUCTUOUS AND SHOULD B E DISMISSED BECAUSE ONCE THE ORDER U/S 154 HAS BEEN PASSED PART IALLY ACCEPTING THE ASSESSEES CONTENTION AND THE ASSESSEE HAS ALRE ADY FILED THE APPEAL AGAINST THE SAID ORDER U/S 154, THEREFORE, T HE ONLY ADJUDICATION REQUIRED BY THE LEARNED CIT(A) IS IN THE APPEAL OF THE ASSESSEE FILED AGAINST THE ORDER U/S 154 DATED 30 TH APRIL, 2015. THE EARLIER APPEAL DOES NOT SURVIVE FOR ADJUDICATION. 5. IN THE REJOINDER, IT IS STATED BY THE LEARNED CO UNSEL THAT IN THE IMPUGNED ORDER, LEARNED CIT(A) HAS MADE CERTAIN OBS ERVATIONS HOLDING THAT THERE WAS NO PRIMA FACIE MISTAKE APPARENT FROM RECORD IN THE ITA-1897/D/2012 & 5 OTHERS 3 ORDER OF THE ASSESSING OFFICER PASSED U/S 201(1)/20 1(1A). THEREFORE, UNLESS THOSE OBSERVATIONS ARE SET ASIDE, THEY WILL PREJUDICE THE CASE OF THE ASSESSEE WHILE DISPOSING OF THE ASSESSEES APPE AL AGAINST THE SUBSEQUENT ORDER U/S 154. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E PERUSED THE MATERIAL PLACED BEFORE US. THE SEQUENCE OF EVENTS IS THAT THE ASSESSING OFFICER PASSED ORDER U/S 201(1)/201(1A) F OR FY 2005-06, 2006-07 AND 2007-08 I.E., RELEVANT TO ASSESSMENT YE ARS 2006-07, 2007-08 AND 2008-09. THE ASSESSEE FILED THE APPLIC ATION U/S 154 FOR ALL THE THREE YEARS WHICH WAS REJECTED BY THE ASSES SING OFFICER VIDE ORDER DATED 30 TH MARCH, 2013. THE ASSESSEE HAS FILED THE APPEALS BEFORE LEARNED CIT(A) IN ALL THESE THREE YEARS AND THE SAME WERE DISMISSED BY HIM VIDE ORDER DATED 8 TH DECEMBER, 2014. THE ASSESSEE HAS FILED APPEALS BEFORE THE ITAT WHICH ARE LISTED ABOVE FOR DISPOSAL VIDE ITA NOS.827/DEL/2015, 828/DEL/2015 & 829/DEL/2 015. IN THE MEANWHILE, THE ASSESSEE FILED SUBSEQUENT APPLICATIO N U/S 154 AND THE ASSESSING OFFICER, VIDE HIS ORDER DATED 30 TH APRIL, 2015, RECTIFIED THE ORDER PASSED U/S 201(1)/201(1A) DATED 26 TH JUNE, 2008. AS PER ASSESSEES CONTENTION, IN THIS ORDER U/S 154, THE A SSESSING OFFICER ONLY PARTIALLY ACCEPTED THE ASSESSEES CONTENTION. THER EFORE, ASSESSEE IS STILL AGGRIEVED WITH REGARD TO SOME OF THE ITEMS ON WHICH NO RECTIFICATION ORDER IS PASSED. HE ALSO STATED THAT THE ASSESSEE HAS FILED APPEAL BEFORE THE LEARNED CIT(A) AGAINST THE ORDER U/S 154 DATED 30 TH APRIL, 2015. IN THE ABOVE CIRCUMSTANCES, IN OUR OP INION, WHAT IS REQUIRED FOR ADJUDICATION IS ONLY THE SUBSEQUENT AP PEAL OF THE ASSESSEE WHICH IS FILED BY HIM AGAINST THE ORDER U/S 154 DAT ED 30 TH APRIL, 2015. THE ORDER U/S 154 DATED 30 TH MARCH, 2013 STOOD MODIFIED BY THE SUBSEQUENT ORDER PASSED U/S 154 DATED 30 TH APRIL, 2015. THEREFORE, IN OUR OPINION, NO SEPARATE ADJUDICATION IS REQUIRED W ITH REFERENCE TO THE ORDER U/S 154 DATED 30 TH MARCH, 2013. TO THAT EXTENT, THE PRESENT APPEALS FILED BY THE ASSESSEE WHICH HAVE ORIGINATED FROM THE ORDER U/S ITA-1897/D/2012 & 5 OTHERS 4 154 DATED 30 TH MARCH, 2013 HAVE BEEN RENDERED INFRUCTUOUS. HOWEVER, WE FIND SOME MERIT IN THE ASSESSEES CONTE NTION THAT THE OBSERVATION OF LEARNED CIT(A) IN THE ORDER DATED 8 TH DECEMBER, 2014 WHEREIN HE HAS UPHELD THE ORDER U/S 154 DATED 30 TH MARCH, 2013 MAY CAUSE PREJUDICE TO THE CASE OF THE ASSESSEE WHILE D ISPOSING OF ITS APPEAL AGAINST THE ORDER U/S 154 DATED 30 TH APRIL, 2015. THEREFORE, WE HOLD THAT LEARNED CIT(A) WHILE DECIDING THE APPEAL AGAINST THE ORDER U/S 154 DATED 30 TH APRIL, 2015 WOULD NOT BE INFLUENCED BY ANY OBSERVA TION OR FINDING GIVEN IN HIS ORDER DATED 8 TH DECEMBER, 2014 BUT HE WILL DECIDE THE APPEAL AFRESH UNINFLUENCED BY ANY OBSERV ATION/FINDING IN HIS ORDER DATED 8 TH DECEMBER, 2014. WITH THIS REMARK, WE DISMISS THE APPEALS FILED BY THE ASSESSEE VIDE ITA NOS. 827/DEL /2015, 828/DEL/2015 & 829/DEL/2015. ITA NOS.1897/DEL/2012, 1978/DEL/2012 & 1979/DEL/201 2 : ITA NOS.1897/DEL/2012, 1978/DEL/2012 & 1979/DEL/201 2 : ITA NOS.1897/DEL/2012, 1978/DEL/2012 & 1979/DEL/201 2 : ITA NOS.1897/DEL/2012, 1978/DEL/2012 & 1979/DEL/201 2 :- -- - 7. ALL THESE APPEALS BY THE ASSESSEE ARE AGAINST TH E LEVY OF PENALTY IMPOSED U/S 271C OF THE INCOME-TAX ACT, 1961 AS UND ER:- ASSESSMENT YEAR PENALTY LEVIED 2006-07 `6,63,102/- 2007-08 `3,16,58,404/- 2008-09 `12,33,848/- 8. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT THE ASSESSING OFFICER HAS MODIFIED THE AMOUNT OF PENALTY IN VIEW OF THE ORDER U/S 154 AS UNDER:- ASSESSMENT YEAR AMOUNT OF PENALTY 2006-07 `2,99,016/- 2007-08 `94,49,969/- 2008-09 `35,172/- 9. AT THE TIME OF HEARING BEFORE US, IT IS CONTENDE D BY THE LEARNED COUNSEL THAT THE PENALTY ORDER PASSED BY THE ASSESS ING OFFICER IS ITA-1897/D/2012 & 5 OTHERS 5 BARRED BY LIMITATION. SINCE THE FACTS AND THE DATE OF ORDER FOR ALL THE THREE YEARS ARE COMMON, WE SHALL CONSIDER THE ORDER FOR ASSESSMENT YEAR 2006-07 WHICH WOULD BE APPLICABLE TO ALL THE T HREE YEARS. HE POINTED OUT THAT THE ASSESSING OFFICER PASSED THE O RDER U/S 201(1A) ON 20 TH JUNE, 2008 DURING WHICH, PENALTY PROCEEDINGS U/S 2 71C WERE INITIATED. HOWEVER, PENALTY ORDER WAS PASSED ON 2 ND MARCH, 2010 WHICH IS BARRED BY LIMITATION AS PER SECTION 275(1) (C). IN SUPPORT OF HIS CONTENTION, HE RELIED UPON THE FOLLOWING DECISIONS: - (I) CIT VS. DINESH JAIN ITA NO.751/2014, ORDER DA TED 27 TH APRIL, 2015 (DELHI HIGH COURT). (II) ITO VS. DINESH JAIN [2014] 34 ITR (TRIB) 709 (DELHI). (III) PR. COMMISSIONER OF INCOME TAX-5 VS. JKD CAPI TAL & FINLEASE LTD. ITA NO.780/2015, ORDER DATED 13 TH OCTOBER, 2015 (DELHI HIGH COURT). 10. LEARNED DR, ON THE OTHER HAND, STATED THAT THE RELEVANT DATE FOR INITIATION OF PENALTY PROCEEDINGS SHOULD BE THE DAT E ON WHICH THE MATTER IS REFERRED TO THE COMPETENT AUTHORITY BY TH E ASSESSING OFFICER. HE STATED THAT THE ASSESSING OFFICER DOES NOT HAVE THE JURISDICTION TO IMPOSE THE PENALTY U/S 271C AND, THEREFORE, THE PER IOD OF LIMITATION HAS TO BE CONSIDERED ONLY WHEN THE COMPETENT AUTHOR ITY ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE. HE STATED THAT THE P ENALTY HAS BEEN LEVIED WITHIN SIX MONTHS FROM THE ISSUE OF SHOW CAU SE NOTICE BY THE COMPETENT AUTHORITY AND, THEREFORE, THE SAME IS NOT BARRED BY LIMITATION. 11. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED MATERIAL PLACED BEFORE US. WE FIND THA T THE PERIOD OF LIMITATION FOR IMPOSING THE PENALTIES HAS BEEN PROV IDED IN SECTION 275 WHICH READS AS UNDER:- ITA-1897/D/2012 & 5 OTHERS 6 275. 275. 275. 275. [(1)] NO ORDER IMPOSING A PENALTY UNDER THIS C HAPTER SHALL BE PASSED [(A) IN A CASE WHERE THE RELEVANT ASSESSMENT OR OTH ER ORDER IS THE SUBJECT-MATTER OF AN APPEAL TO THE [***] COMMISSIONER (APPEALS) UNDER SECTION 246 [OR SECTIO N 246A] OR AN APPEAL TO THE APPELLATE TRIBUNAL UNDER SECTION 253, AFTER THE EXPIRY OF THE FINANCIAL YEAR IN WHIC H THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPL ETED, OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE O RDER OF THE [***] COMMISSIONER (APPEALS) OR, AS THE CASE MA Y BE, THE APPELLATE TRIBUNAL IS RECEIVED BY THE [ [[ [PRINCIPAL CHIEF COMMISSIONER OR] ]] ] CHIEF COMMISSIONER OR [ [[ [PRINCIPAL COMMISSIONER OR] ]] ] COMMISSIONER, WHICHEVER PERIOD EXPIRES LATER : [PROVIDED PROVIDED PROVIDED PROVIDED THAT IN A CASE WHERE THE RELEVANT ASSESSME NT OR OTHER ORDER IS THE SUBJECT-MATTER OF AN APPEAL TO T HE COMMISSIONER (APPEALS) UNDER SECTION 246 OR SECTION 246A, AND THE COMMISSIONER (APPEALS) PASSES THE ORD ER ON OR AFTER THE 1ST DAY OF JUNE, 2003 DISPOSING OF SUC H APPEAL, AN ORDER IMPOSING PENALTY SHALL BE PASSED BEFORE TH E EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDIN GS, IN THE COURSE OF WHICH ACTION FOR IMPOSITION OF PENALTY HA S BEEN INITIATED, ARE COMPLETED, OR WITHIN ONE YEAR FROM T HE END OF THE FINANCIAL YEAR IN WHICH THE ORDER OF THE COMMIS SIONER (APPEALS) IS RECEIVED BY THE [ [[ [PRINCIPAL CHIEF COMMISSIONER OR] ]] ] CHIEF COMMISSIONER OR [ [[ [PRINCIPAL COMMISSIONER OR] ]] ] COMMISSIONER, WHICHEVER IS LATER;] (B) IN A CASE WHERE THE RELEVANT ASSESSMENT OR OTHE R ORDER IS THE SUBJECT-MATTER OF REVISION UNDER SECTION 263 [OR SECTION 264], AFTER THE EXPIRY OF SIX MONTHS FROM T HE END OF THE MONTH IN WHICH SUCH ORDER OF REVISION IS PASSED ; (C) IN ANY OTHER CASE, AFTER THE EXPIRY OF THE FINA NCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH AC TION 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.]. 12. ADMITTEDLY, IN THE CASE OF THE ASSESSEE, CLAUSE (C) OF SUB-SECTION (1) WOULD BE APPLICABLE BECAUSE THE RELEVANT ORDER U/S 201(1)/201(1A) ITA-1897/D/2012 & 5 OTHERS 7 WAS NOT THE SUBJECT MATTER OF APPEAL TO THE CIT(A) AND SIMILARLY, THE SAME WAS NOT THE SUBJECT MATTER OF REVISION U/S 263 . AS PER CLAUSE (C) OF SUB-SECTION (1), THE PENALTY ORDER CANNOT BE PAS SED AFTER THE (I) EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDIN GS, IN THE COURSE OF WHICH ACTION FOR IMPOSITION OF PENALTY HAS BEEN INI TIATED, ARE COMPLETED AND (II) SIX MONTHS FROM THE END OF THE M ONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED WHICH EVER PERIOD EXPIRES LATER. THEREFORE, THE CRUCIAL DATE WOULD BE THE DA TE OF THE INITIATION OF PENALTY PROCEEDINGS. IN THE ORDER U/S 201(1) AND 2 01(1A) DATED 27 TH JUNE, 2008, THE ASSESSING OFFICER OBSERVED AS UNDER :- ISSUE PENALTY NOTICE U/S 221 AND 271C AND 272A(2)( C) & 272A(2)(K) OF I.T. ACT, 1961 ARE BEING ISSUED SEPAR ATELY FOR EACH & EVERY SUCH DEFAULT FOR ALL THE YEARS INVOLVE D. 13. THUS, THE ASSESSING OFFICER, DURING THE COURSE OF PASSING OF ORDER U/S 201(1) & 201(1A), DIRECTED FOR ISSUE OF PENALTY NOTICE U/S 271C. THUS, THE PENALTY PROCEEDINGS WERE INITIATED BY THE DIRECTION OF THE ASSESSING OFFICER FOR ISSUE OF PENALTY NOTICE U/S 2 71C. IT IS CONTENDED BY THE LEARNED DR THAT AS PER SECTION 271C SUB-SECT ION (2), ONLY THE JOINT COMMISSIONER OF INCOME-TAX IS AUTHORIZED TO I MPOSE THE PENALTY U/S 271C. ORDER U/S 201(1) & 201(1A) WAS PASSED BY THE ITO WHO IS NOT AUTHORIZED TO LEVY THE PENALTY U/S 271C AND, TH EREFORE, THE PERIOD OF LIMITATION FOR THE PURPOSE OF LEVY OF PENALTY IS TO BE CONSIDERED WHEN THE JOINT COMMISSIONER ISSUED THE NOTICE U/S 271C. 14. WE FIND THAT THIS ISSUE HAS ALREADY BEEN CONSID ERED BY THE ITAT AS WELL AS HON'BLE JURISDICTIONAL HIGH COURT. IN T HE CASE OF DINESH JAIN (SUPRA), DELHI B BENCH CONSIDERED AN IDENTICAL IS SUE AND HELD AS UNDER:- HELD, DISMISSING THE APPEAL, (I) THAT UNDER SECTIO N 271E THE PENALTY WAS TO BE IMPOSED BY THE JOINT COMMISSI ONER. HOWEVER, THERE WAS NO BAR ON THE ASSESSING OFFICER TO ITA-1897/D/2012 & 5 OTHERS 8 INITIATE THE PENALTY PROCEEDINGS UNDER SECTION 271E BECAUSE WHEN THERE IS ANY ACCEPTANCE OR REPAYMENT O F LOAN IN VIOLATION OF SECTION 269SS OR 269T, IT IS T HE ASSESSING OFFICER WHO HAS TO PRIMA FACIE SATISFY HI MSELF WHETHER THERE IS A VIOLATION OF SECTION 269SS OR 26 9T AND IF SO, INITIATE PENALTY PROCEEDINGS UNDER SECTION 271D OR 271E AND THEREAFTER REFER THE MATTER TO THE JOINT COMMISSIONER WHO WOULD FINALLY DECIDE AND IF SATISF IED, LEVY THE PENALTY UNDER SECTION 271D OR 271E. HENCE THE PERIOD OF LIMITATION WAS TO BE COUNTED FROM THE DAT E OF THE INITIATION OF THE PENALTY PROCEEDINGS BY THE ASSESS ING OFFICER, THAT IS, DECEMBER 5, 2011. THE PENALTY PROCEEDINGS WERE INITIATED IN THE COURSE OF ASSESSM ENT PROCEEDINGS IN THE FINANCIAL YEAR 2011-12, AND SUCH FINANCIAL YEAR EXPIRED ON MARCH 31, 2012. SIX MONT HS FROM THE INITIATION OF PENALTY PROCEEDINGS ALSO EXPIRED ON JUNE 30, 2012. THE PENALTY ORDER PASSED ON SEPTEMBER 14 , 2012 WAS CERTAINLY AFTER THE PERIOD OF LIMITATION P RESCRIBED UNDER SECTION 275(1)(C). 15. IN THE CASE OF JKD CAPITAL & FINLEASE LTD. (SUP RA), HON'BLE JURISDICTIONAL HIGH COURT HELD AS UNDER:- 11. IN FACT, WHEN THE AO RECOMMENDED THE INITIATIO N OF PENALTY PROCEEDINGS THE AO APPEARED TO BE CONSCIOUS OF THE FACT THAT HE DID NOT HAVE THE POWER TO ISSUE NO TICE AS FAR AS THE PENALTY PROCEEDINGS UNDER SECTION 271-E WAS CONCERNED. HE, THEREFORE, REFERRED THE MATTER CONC ERNING PENALTY PROCEEDINGS UNDER SECTION 271-E TO THE ADDI TIONAL CIT. FOR SOME REASON, THE ADDITIONAL CIT DID NOT I SSUE A SHOW CAUSE NOTICE TO THE ASSESSEE UNDER SECTION 271 -E(1) TILL 20 TH MARCH 2012. THERE IS NO EXPLANATION WHATSOEVER FOR THE DELAY OF NEARLY FIVE YEARS AFTER THE ASSESS MENT ORDER IN THE ADDITIONAL CIT ISSUING NOTICE UNDER SE CTION 271-E OF THE ACT. THE ADDITIONAL CIT OUGHT TO HAVE BEEN CONSCIOUS OF THE LIMITATION UNDER SECTION 275(1)(C) , I.E., THAT NO ORDER OF PENALTY COULD HAVE BEEN PASSED UND ER SECTION 271-E AFTER THE EXPIRY OF THE FINANCIAL YEA R IN WHICH THE QUANTUM PROCEEDINGS WERE COMPLETED OR BEYOND SI X MONTHS AFTER THE MONTH IN WHICH THEY WERE INITIATED , WHICHEVER WAS LATER. IN A CASE WHERE THE PROCEEDIN GS STOOD INITIATED WITH THE ORDER PASSED BY THE AO, BY DELAYING THE ISSUANCE OF THE NOTICE UNDER SECTION 2 71-E BEYOND 30 TH JUNE 2008, THE ADDITIONAL CIT DEFEATED THE VERY OBJECT OF SECTION 275(1)(C). ITA-1897/D/2012 & 5 OTHERS 9 12. IN THAT VIEW OF THE MATTER, THE ORDER OF THE CI T(A) WHICH HAS BEEN AFFIRMED BY THE IMPUGNED ORDER OF TH E ITAT DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. 13. NO SUBSTANTIAL QUESTION OF LAW ARISES FOR DETERMINATION. 16. THOUGH THE ABOVE TWO DECISIONS WERE WITH RESPEC T TO LEVY OF PENALTY U/S 271E BUT THE RATIO OF BOTH THE ABOVE DE CISIONS WOULD BE SQUARELY APPLICABLE IN RESPECT OF LEVY OF PENALTY U /S 271C BECAUSE AS IN SECTION 271C, U/S 271E ALSO, ONLY THE JOINT COMMISS IONER OF INCOME-TAX IS AUTHORIZED TO LEVY THE PENALTY UNDER THE RELEVAN T SECTION AND, THEREFORE, THE QUESTION BEFORE THE TRIBUNAL WAS WHA T WOULD BE THE DATE OF INITIATION OF THE PENALTY PROCEEDINGS AND DELHI BENCH OF THE TRIBUNAL AS WELL AS HON'BLE JURISDICTIONAL HIGH COURT HELD T HAT THE INITIATION OF PENALTY PROCEEDINGS BY THE ASSESSING OFFICER IS THE DATE OF INITIATION OF PENALTY PROCEEDINGS. THOUGH THE PENALTY IS TO BE I MPOSED BY THE JOINT COMMISSIONER OF INCOME-TAX BUT THERE IS NO BAR ON T HE INITIATION OF PENALTY PROCEEDINGS BY THE ITO. AFTER INITIATING P ENALTY PROCEEDINGS, HE HAS TO TRANSFER THE PROCEEDINGS TO THE JOINT COM MISSIONER WHO IS COMPETENT TO LEVY THE PENALTY. THE PENALTY IS TO B E LEVIED WITHIN THE PERIOD OF LIMITATION PRESCRIBED U/S 275(1). NOW, R EVERTING TO THE FACTS OF THE ASSESSEES CASE, THE ITO ISSUED THE PENALTY NOTICE U/S 271C VIDE HIS ORDER U/S 201(1) AND 201(1A) DATED 27 TH JUNE, 2008. THEREFORE, AS PER CLAUSE (C) OF SECTION 275(1), THE PENALTY PROCE EDINGS WERE INITIATED IN THE COURSE OF ORDER U/S 201(1) AND 201(1A) DATED 27 TH JUNE, 2008 AND THE RELEVANT FINANCIAL YEAR WOULD EXPIRE ON 31 ST MARCH, 2009. SIX MONTHS FROM THE END OF THE MONTH IN WHICH PENALTY P ROCEEDINGS WERE INITIATED WOULD EXPIRE ON 31 ST DECEMBER, 2008. THEREFORE, THE COMPETENT AUTHORITY COULD HAVE IMPOSED THE PENALTY BEFORE THE EXPIRY OF 31 ST MARCH, 2009. HOWEVER, THE PENALTY ORDER HAS BEEN PASSED ON 2 ND MARCH, 2010 WHICH IS CLEARLY BARRED BY LIMITATION. WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE JURI SDICTIONAL HIGH COURT IN THE CASE OF JKD CAPITAL & FINLEASE LTD. (SUPRA), AND ITAT DELHI BENCH ITA-1897/D/2012 & 5 OTHERS 10 IN THE CASE OF DINESH JAIN (SUPRA), HOLD THAT THE P ENALTY ORDER PASSED U/S 271C WAS BARRED BY LIMITATION. THE SAME IS QUA SHED. 17. IN THE RESULT, THE APPEALS OF THE ASSESSEE VIDE ITA NO.827 TO 829/DEL/2015 ARE DISMISSED BEING INFRUCTUOUS AND TH E APPEALS OF THE ASSESSEE VIDE ITA NO.1897/DEL/2012, 1978/DEL/2012 & 1979/DEL/2012 ARE ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 26.04.2016 . SD/- SD/- (SUCHITRA KAMBLE (SUCHITRA KAMBLE (SUCHITRA KAMBLE (SUCHITRA KAMBLE ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S MODIPON LIMITED, M/S MODIPON LIMITED, M/S MODIPON LIMITED, M/S MODIPON LIMITED, MODINAGAR, GHAZIABAD, U.P., PIN : 201 204. MODINAGAR, GHAZIABAD, U.P., PIN : 201 204. MODINAGAR, GHAZIABAD, U.P., PIN : 201 204. MODINAGAR, GHAZIABAD, U.P., PIN : 201 204. 2. RESPONDENT : ADDITIONAL COMMISSIONER OF INCOME T AX (TDS), ADDITIONAL COMMISSIONER OF INCOME TAX (TDS), ADDITIONAL COMMISSIONER OF INCOME TAX (TDS), ADDITIONAL COMMISSIONER OF INCOME TAX (TDS), GHAZIABAD, U.P. GHAZIABAD, U.P. GHAZIABAD, U.P. GHAZIABAD, U.P. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR