RAGHUVAR DAYAL PAREEK, Jaipur V. ACIT, Jaipur

ITA 209/JPR/2010

• Counselvise Citation: 20923114 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1998-1999
• Appeal Filed On: 12-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD JOHRI
• Keywords: Bogus purchase; Period of limitation
• Section: 153A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NOS.209,210,211,212, 213 & 214/JP/2010 A.YS: 1998-99,1999-2000,2000-01,2001-02,2002-03& 2003-04 PAN: ACIPP 3699 H SHRI RAGHVAR DAYAL PAREEK VS. THE ACIT NAHARGARH ROAD, CHANDPOLE CENTRAL CIRCLE-1 JAIPUR JAIPUR (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI MAHENDRA GARGIEYA DEPARTMENT BY : SHRI VINOD JOHRI DATE OF HEARING: 21-09-2011 DATE OF PRONOUNCEMENT: 30-09-2011 ORDER PER N.L. KALRA, AM:- THE ASSESSEE HAS FILED APPEALS AGAINST RESPECT IVE ORDERS OF THE LD. CIT(A), CENTRAL, JAIPUR DATED 31-12-2009 FOR THE A SSESSMENT YEARS 1998-99 TO 2003-04. 2.1 THE SOLITARY GRIEVANCE OF THE ASSESSEE IN ALL T HESE APPEALS IS THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE PENALTY U/ S 271(A) OF RS. 25,000/- JUSTIFIED. 2.2 THE ASSESSEE HAS FILED THE APPEALS AFTER THE DE LAY OF 08 DAYS. AN APPLICATION HAS BEEN FILED FOR THE CONDONATION OF D ELAY IN WHICH IT HAS BEEN STATED THAT THE ASSESSEE WAS NOT WELL FROM 25-02-20 10 TO 11-03-2010. AFTER CONSIDERING THE REASONS GIVEN IN THE APPLICATION, W E CONDONE THE DELAY. 2 2.3 DURING THE COURSE OF PROCEEDING BEFORE US, THE ASSESSEE HAS FILED THE ADDITIONAL GROUNDS OF APPEAL. IN THE ADDITIONAL GRO UNDS OF APPEAL, IT IS MENTIONED THAT PENALTY ORDER IS BARRED BY LIMITATIO N. THE ISSUE RAISED IN THE ADDITIONAL GROUNDS OF APPEAL IS LEGAL ISSUE AND THE FACTS NECESSARY FOR ADJUDICATING SUCH ISSUE ARE AVAILABLE ON RECORD AND THEREFORE, ADDITIONAL GROUNDS OF APPEAL IS ADMITTED. 2.4 THE REVENUE CONDUCTED THE SEARCH AT THE BUSINES S PREMISES OF M/S. MITTAL GEMS, M/S. SANJEEV PRAKASHAN GROUP, M/S. ANM OL RATAN AND M/S. SHRUTI GEMS. DURING THE COURSE OF SEARCH, CERTAIN I NCRIMINATING BOOKS OF ACCOUNTS AND DOCUMENTS RELATING TO THE ASSESSEE WER E FOUND AND SEIZED. DURING THE COURSE OF SEARCH AT VARIOUS PREMISES OF DIFFERENT CONCERNS, IT WAS FOUND THAT THE ASSESSEE WAS INDULGING IN THE PRACTI CE OF ISSUING THE BOGUS PURCHASE BILLS. PROCEEDINGS U/S 153A OF THE ACT WER E INITIATED AGAINST THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, THE ASSESSEE FILED AN AFFIDAVIT AND ADMITTED THAT HE HAS BEEN ISSUING TH E BOGUS BILLS, VOUCHERS AND WAS EARNING COMMISSION. THE BOOKS OF ACCOUNTS WERE DENIED BY THE ASSESSEE. AT PAGE 10 OF THE ASSESSMENT ORDER, THE A O HAS MENTIONED THAT THE ASSESSEE HAS DENIED ANY BOOKS OF ACCOUNTS. THE AO E STIMATED THE INCOME FROM ISSUING BOGUS PURCHASE VOUCHERS AND INITIATED PENALTY PROCEEDINGS U/S 271A OF THE ACT. 3 2.5 WE HAVE HEARD BOTH THE PARTIES. THE ASSESSEE HA S DENIED TO HAVE MAINTAINED ANY BOOKS OF ACCOUNTS. THE ASSESSEE IS I NDULGING IN ISSUING THE BOGUS BILLS AND HELPING OTHER PARTIES TO AVOID PAYM ENT OF TAX. THUS THE PENALTY IS RIGHTLY IMPOSABLE ON THE ASSESSEE. 2.6 DURING THE COURSE OF PROCEEDINGS BEFORE US, THE LD. AR HAS REFERRED TO THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. HISSARIA BROS, 291 ITR 244 AND ARGUED THAT PENALTY IS BARRED BY LIMITATION. IT IS TRUE THAT IN THE INSTANT CASE THE PENALTY PROCEE DINGS WERE INITIATED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND INITIATION IS MENTIONED IN THE ASSESSMENT ORDER. PENALTY U/S 271A IS IMPOSABLE IN CASE THE ASSESSEE FAILS TO KEEP AND MAINTAIN THE BOOKS OF ACCOUNTS AS REQUIRED U/S 44AA OF THE ACT. PENALTY IMPOSABLE IS RS. 25,000/-. THUS THE QUANTUM OF PENALTY IS NOT DEPENDENT ON THE ASSESSED INCOME. THE LIMITATION FO R IMPOSING PENALTY IS GOVERNED U/S 275 OF THE ACT. IN CASE THE ASSESSMENT ORDER IS SUBJECT MATTER OF APPEAL THEN THE LIMITATION FOR THE IMPOSITION OF PE NALTY IS ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE APPELLATE OR DER IS RECEIVED. IN ANY OTHER CASE, PENALTY IS TO BE IMPOSED AFTER EXPIRY O F THE FINANCIAL YEAR OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH ACTION FO R IMPOSITION OF PENALTY IS INITIATED. IF ONE CONSIDERS THE LIMIT PROVIDED U /S 275 (1)(C ) THEN THE PENALTY ORDER IS BARRED BY LIMITATION BECAUSE THE P ENALTY ORDER HAS BEEN 4 PASSED ON 31-03-08 WHILE THE PENALTY WAS INITIATED ON 22-03-2006. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. HISSARIA BROS (SUPRA) HAS HELD THAT IN CASE THE PENALTY IS INDEPE NDENT OF THE QUANTUM OF INCOME DETERMINED THEN THE PERIOD OF LIMITATION IS TO BE CONSIDERED U/S 275(1)( C) OF THE ACT. THE HON'BLE JURISDICTIONAL H IGH COURT IN THE ABOVE REFERRED CASE NOTICED THAT THE CHANGES MADE IN SECT ION 275 OF THE ACT AND AFTER NOTICING THE CHANGES, HON'BLE HIGH COURT WAS OF THE VIEW THAT IN CASE THE PENALTY IS INDEPENDENT OF THE ASSESSMENT THEN T HE LIMITATION IS TO BE DECIDED AS PER SECTION 275(1)( C) OF THE ACT. IT WI LL BE USEFUL TO REPRODUCE FOLLOWING PARA FROM THE DECISION OF HON'BLE HIGH CO URT IN THE CASE OF CIT VS. HISSARIA BROS (SUPRA) WE ARE, THEREFORE, OF THE OPINION THAT SINCE PENA LTY PROCEEDINGS FOR DEFAULT IN NOT HAVING TRANSACTIONS THROUGH THE BANK AS REQUIRED UNDER SEC- TIONS 269SS AND 269T AR E NOT RELATED TO THE ASSESSMENT PROCEEDING BUT ARE INDEP ENDENT OF IT, THEREFORE, THE COMPLETION OF APPELLATE PROCEEDINGS ARISING OUT OF THE ASSESSMENT PROCEEDINGS OR THE OTHER PROCEEDINGS DURING WHICH THE PENALTY PROCEEDINGS UNDER SECTIONS 271D A ND 271E MAY HAVE BEEN INITIATED HAS NO RELEVANCE FOR SUSTA INING OR NOT SUSTAINING THE PENALTY PROCEEDINGS AND, THEREFORE, CLAUSE (A) OF SUB-SECTION (1) OF SECTION 275 CAN- NOT BE ATTRACTE D TO SUCH PROCEEDINGS. IF THAT WERE NOT SO CLAUSE (C) OF SEC- TION 275(1) WOULD BE REDUNDANT BECAUSE OTHERWISE AS A MATTER OF FACT EVERY PENALTY PROCEEDING IS USUALLY INITIATED WHEN DURING SOME PROCEEDINGS SUCH DEFAULT IS NOTICED, THOUGH THE FI NAL FACT FINDING IN THIS PROCEEDING MAY NOT HAVE ANY BEARIN G ON THE ISSUES RELATING TO ESTABLISHING DEFAULT E.G. PENALT Y FOR NOT DEDUCTING TAX AT SOURCE WHILE MAKING PAYMENT TO EMP LOYEES, OR CONTRACTOR, OR FOR THAT MATTER NOT MAKING PAYMENT T HROUGH 5 CHEQUE OR DEMAND DRAFT WHERE IT IS SO REQUIRED TO BE MADE. EITHER OF THE CONTINGENCIES DOES NOT AFFECT THE CO MPUTATION OF TAXABLE INCOME AND LEVY OF CORRECT TAX ON CHARGEAB LE INCOME ; IF CLAUSE (A) WAS TO BE INVOKED, NO NECESSITY OF C LAUSE (C) WOULD ARISE. 2.7 FOLLOWING THE DECISION OF HON'BLE JURISDICTIONA L HIGH COURT, WE HOLD THAT THE PENALTY IS BARRED BY LIMITATION. HENCE, TH E PENALTY ORDERS ARE CANCELLED. 3. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30-09 -2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 30 /09/2011 *MISHRA COPY FORWARDED TO :- 1. SHRI RAGHUVAR DAYAL PAREEK, JAIPUR 2. THE ACIT, CENTRAL CIRCLE- 1, JAIPUR 3. THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5. THE LD.DR 6. THE GUARD FILE (ITA NO.209/JP /10) A.R, ITAT, JAIPUR 6 7