Cosmo Films Ltd., New Delhi V. ACIT, New Delhi

ITA 2192/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3433 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-01-2017
• Assessment Year: 1998-1999
• Appeal Filed On: 10-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Assessee Lawyers: AMIT SACHDEVA
• Section: 260A; 246; 27; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B DELHI) BEFORE SHRI A.D. JAIN AND SHRI SHAMIM YAHYA ITA NO. 2192(DEL)2010 ASSESSMENT YEAR: 1998-99 COSMO FILMS LTD. ASSTT.COMM ISSIONER OF INCOME TAX, 30, COMMUNITY CENTRE, V. CIRCLE 3(1), DE LHI. SAKET, NEW DELHI-17. (APPELLANT) (RESPONDENT) APPELLANT BY: S/SHRI AJAY VOHRA & AMIT SACHDEVA, ADV. RESPONDENT BY: SHRI SALIL MISHRA, SR. DR ORDER PER A.D. JAIN, J.M. THIS IS ASSESSEES APPEAL FOR ASSESSMENT YEAR 1998- 99, TAKING THE FOLLOWING EFFECTIVE GROUNDS:- 1. THAT THE COMMISSIONER OF INCOME TAX(APPEALS) ER RED ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE AO IN IMP OSING PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT) F OR ALLEGED CONCEALMENT/FURNISHING OF INACCURATE PARTICULARS OF INCOME WHICH IS BEYOND JURISDICTION, BAD IN LAW AND VOID AB INITIO. 2. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN UP HOLDING THE PENALTY LEVIED BY THE AO IN RESPECT OF ADDITION MADE U/S 41 (1) OF THE ACT ON ACCOUNT OF ALLEGED CESSATION/REMISSION OF STATUTORY LIABILITY BY A UNILATERAL ACT OF THE APPELLANT. 2. THE FOLLOWING ADDITIONAL GROUND HAS BEEN FILED:- ITA 2192(DEL)2010 2 THAT IN THE CIRCUMSTANCES OF THE CASE, THE ORDER D ATED 28.07.2009 PASSED BY THE ASSESSING OFFICER LEVYING PENALTY UND ER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 IS BARRED BY LIMITATION. 3. FOR THE ADMISSION OF THE ADDITIONAL GROUND, THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT IT IS BEING RAISED AT T HIS JUNCTURE PURSUANT TO THE ASSESSEE HAVING BEEN ADVISED OF THE CORRECT POSITIO N IN LAW AND IN THE ABSENCE OF IT, THIS GROUND COULD NOT BE TAKEN EARLI ER. 4. THE LD. DR HAS OPPOSED THE ADMISSION OF THE ADDI TIONAL GROUND CONTENDING THAT IT OUGHT TO HAVE BEEN TAKEN BEFORE THE LEARNED CIT(A) AND IT WAS NOT SO DONE, IT CANNOT BE ENTERTAINED AT THIS S TAGE. 5. IN THIS REGARD, IT WAS ONLY ON THE LEGAL ADVICE REGARDING THE CORRECT POSITION OF LAW CONCERNING LIMITATION, THAT THE OTH ER GROUND HAS BEEN RAISED AS AN ADDITIONAL GROUND BEFORE US. IT WAS NOT RAIS ED BEFORE THE LD. CIT(A), NOR ANY PLEA WITH REGARD THERETO WAS TAKEN BEFORE T HE AO. HOWEVER, WE FIND THAT THE MATTER OF LIMITATION OF PASSING OF TH E PENALTY ORDER, WHICH IS THE VERY BASIS OF THE APPEAL BEFORE US, GOES TO THE VER Y ROOT OF THE MATTER. 6. AS SUCH, THE ADDITIONAL GROUND IS ADMITTED. 7. SOFAR AS REGARDS THE MERITS OF THE ADDITIONAL GR OUND, REFERRING TO PROVISO TO SECTION 275(1)(A) OF THE I.T. ACT, THE L EARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE PENALTY ORDER, IN A CCORDANCE WITH THE SAID SECTION, OUGHT TO HAVE BEEN PASSED LATEST BY 31.3.2 005, WHEREAS IT HAS BEEN ITA 2192(DEL)2010 3 PASSED ONLY ON 28.7.09, RENDERING IT BARRED BY LIMI TATION PROVIDED BY THE PROVISO TO SECTION 271(1) OF THE ACT. 8. THE LD. DR, ON THE OTHER HAND, HAS CONTENDED THA T IT IS SECTION 275(1A) OF THE ACT AND NOT THE PROVISO TO SECTION 2 75(1)(A) THEREOF, WHICH COVERS THE CASE OF THE ASSESSEE AND AS SUCH, THE PE NALTY ORDER HAS BEEN PASSED WITHIN LIMITATION. 9. AT THE OUTSET, SECTION 275(1)(A) PROVISO READS A S FOLLOWS:- 275. BAR OF LIMITATION FOR IMPOSING PENALTIES. (1) NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHAL L BE PASSED (A) IN A CASE WHERE THE RELEVANT ASSESSMENT OR OT HER ORDER IS THE SUBJECT MATTER OF AN APPEAL TO THE COMMISSIONER(APPEALS)UNDER SECTION 246 OR SECTION 2 46A OR AN APPEAL TO THE APPELLATE TRIBUNAL UNDER SECTION 2 53, AFTER THE EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDIN GS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALT Y HAS BEEN INITIATED, ARE COMPLETED, OR SIX MONTHS FROM THE EN D OF THE MONTH IN WHICH THE ORDER OF THE COMMISSIONER(APPEAL S)OR, AS THE CASE MAY BE, THE APPELLATE TRIBUNAL IS RECEIVED BY THE CHIEF COMMISSIONER OR COMMISSIONER, WHICHEVER PERIOD EXPI RES LATER: PROVIDED THAT IN A CASE WHERE THE RELEVANT ASSESSM ENT 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 ORDER ON OR AF TER THE 1 ST DAY OF JUNE, 2003 DISPOSING OF SUCH APPEAL, AN ORDE R IMPOSING PENALTY SHALL BE PASSED BEFORE THE EXPIRY OF THE FI NANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTIO N FOR IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPL ETED, OR WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ITA 2192(DEL)2010 4 ORDER OF THE COMMISSIONER(APPEALS) IS RECEIVED BY T HE CHIEF COMMISSIONER OR COMMISSIONER, WHICHEVER IS LATER. 10. THUS, AS PER SECTION 275(1)(A) PROVISO, IN ORDE R TO BE WITHIN LIMITATION, A PENALTY ORDER NEEDS MUST BE PASSED, IN THE FACTS OF THE PRESENT CASE, WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHIC H THE ORDER OF THE COMMISSIONER(A) IS RECEIVED BY THE CHIEF COMMISSION ER OR COMMISSIONER, WHICHEVER IS LATER, IN A CASE WHERE THE ASSESSMENT ORDER IS SUBJECT MATTER OF APPEAL BEFORE THE COMMISSIONER(A) AND THE COMMISSIO NER PASSES THE ORDER ON OR AFTER 1.6.2003 DISPOSING OF SUCH APPEAL. 11. IN THE PRESENT CASE, THE ORDER OF THE LD. CIT(A ) IN QUANTUM APPEAL WAS PASSED AFTER 1.6.2003, I.E., ON 31.7.2003, AS AVAIL ABLE FROM THE RECORD. IT WAS RECEIVED BY THE DEPARTMENT ON 7.8.2003, AS UNREBUTT EDLY CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE. THUS, AS PER TH E PROVISO TO SECTION 275(1)(A) OF THE ACT, THE PENALTY ORDER OUGHT TO HA VE BEEN PASSED ON OR BEFORE 31.3.2005, I.E., WITHIN ONE YEAR FROM THE EN D OF FINANCIAL YEAR IN WHICH THE LD. CIT(A)S ORDER WAS RECEIVED BACK BY T HE DEPARTMENT. THE PENALTY ORDER, HOWEVER, GOT TO BE PASSED ONLY ON 28 .7.2009. THAT BEING SO, THE CONTENTION OF THE ASSESSEE IS CORRECT. THE PE NALTY ORDER IS CLEARLY BARRED BY LIMITATION PROVIDED BY THE PROVISO TO SECTION 27 5(1)(A) OF THE ACT. ITA 2192(DEL)2010 5 12. APROPOS THE DEPARTMENTS CONTENTION THAT THE CA SE IS COVERED BY THE PROVISO TO SECTION 275(1A) RATHER THAN THE PROVISO TO SECTION 275(1)(A) OF THE ACT, IT IS SEEN THAT THIS IS NOT CORRECT. SEC TION 275(1A) READS AS FOLLOWS:- [(1A) IN A CASE WHERE THE RELEVANT ASSESSMENT OR OT HER ORDER IS THE SUBJECT-MATTER OF AN APPEAL TO THE COMMISSIONER (AP PEALS) UNDER SECTION 246 OR SECTION 246A OR AN APPEAL TO THE APPELLATE TRIBUNAL UNDER SECTION 253 OR AN APPEAL TO THE HIGH COURT UNDER SECTION 260A OR AN APPEAL TO THE SUPREME COURT UNDER SECTION 261 OR REVISION UNDER SECTION 263 OR SECTION 264 AND AN ORDER IMPOSING OR ENHANCING OR REDUCING OR CANCELLING PENALTY OR DROPPING THE P ROCEEDINGS FOR THE IMPOSITION OF PENALTY IS PASSED BEFORE THE ORDER OF THE COMMISSIONER (APPEALS) OR THE APPELLATE TRIBUNAL OR THE HIGH COU RT OR THE SUPREME COURT IS RECEIVED BY THE CHIEF COMMISSIONER OR THE COMMISSIONER OR THE ORDER OF REVISION UNDER SECTION 263 OR SECTION 264 IS PASSED, AN ORDER IMPOSING OR ENHANCING OR REDUCING OR CANCELLI NG PENALTY OR DROPPING THE PROCEEDINGS FOR THE IMPOSITION OF PENA LTY MAY BE PASSED ON THE BASIS OF ASSESSMENT AS REVISED BY GIVING EFF ECT TO SUCH ORDER OF THE COMMISSIONER (APPEALS) OR, THE APPELLATE TRIBUN AL OR THE HIGH COURT, OR THE SUPREME COURT OR ORDER OF REVISION UN DER SECTION 263 OR SECTION 264 : 13. AS PER SECTION 275(1A) OF THE ACT, THEREFORE, T HE LIMITATION PROVIDED THERE-UNDER CONCERNS CASES WHERE THE ASSESSMENT ORD ER OR REVISION IS UNDER APPEAL AT THE RELEVANT STAGE AND AN ORDER IMPOSING OR ENHANCING OR REDUCING OR CANCELLING PENALTY OR DROPPING THE PROCEEDINGS F OR THE IMPOSITION OF PENALTY PASSED BEFORE THE APPELLATE ORDER IS RECEIV ED BY THE DEPARTMENT OR ORDER OF REVISION IS PASSED. IN SUCH A SITUATION, AN ORDER IMPOSING OR ENHANCING OR REDUCING OR CANCELLING PENALTY OR DROP PING THE PROCEEDINGS FOR ITA 2192(DEL)2010 6 THE IMPOSITION OF PENALTY MAY BE PASSED ON THE BASI S OF ASSESSMENT AS REVISED BY GIVING EFFECT TO THE APPELLATE ORDER OR THE REVISIONAL ORDER. 14. HOWEVER, NOW THE PRESENT CASE, NO ORDER EITHER IMPOSING OR ENHANCING OR REDUCING OR CANCELLING PENALTY OR DROPPING THE P ROCEEDINGS FOR THE IMPOSITION OF PENALTY STANDS PASSED. THAT BEING S O, THE PROVISIONS OF SECTION 275(1A) ARE NOT APPLICABLE. 15. IN VIEW OF THE ABOVE, THE PENALTY ORDER IS HIT BY THE PROVISO TO SECTION 275(1)(A) OF THE ACT. GOING BY THE PARA-METERS LA ID DOWN THEREIN IN THE SAID SECTION, THE PENALTY ORDER IS CLEARLY BEYOND THE LI MITATION PROVIDED THEREIN. 16. ACCORDINGLY, THE PENALTY ORDER IS CANCELLED, BE ING BARRED BY LIMITATION, AS ABOVE. 17. SINCE THE PENALTY ORDER STANDS CANCELLED AS BAR RED BY LIMITATION, NOTHING ELSE SURVIVES. AS SUCH, THE ORIGINAL GROU NDS RAISED BY THE ASSESSEE, ON MERITS, ARE NOT REQUIRED TO BE GONE INTO AND WE ARE NOT DOING SO. 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.07.2011. SD/- SD/- (SHAMIM YAHYA) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22.07.2011 *RM ITA 2192(DEL)2010 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR