M/s Marshal Timber Merchants, Ludhiana V. ACIT, Ludhiana

ITA 227/CHANDI/2005

• Counselvise Citation: 22721514 RSA 2005
• Duration Of Justice: 10 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-10-2015
• Assessment Year: 1989-1990
• Appeal Filed On: 28-02-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: C L JHANGRA
• Keywords: Condonation of delay
• Section: 27

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 227/CHD/2005 ASSESSMENT YEAR: 1989-90 M/S MARSHAL TIMBER MERCHANTS, VS. THE ACIT, CIRCLE -1(1), LUDHIANA LUDHIANA & M.A. NO. 191/CHD/2006 (IN ITA NO. 227/CHD/2005) ASSESSMENT YEAR: 1989-90 M/S MARSHAL TIMBER MERCHANTS, VS. THE ACIT, CIRCLE -1(1), LUDHIANA LUDHIANA (APPELLANT) (RESPONDENT) APPELLANT BY : SH. C.L.JHANGRA RESPONDENT BY : SH. S.K. MITTAL DATE OF HEARING : 06.10.2015 DATE OF PRONOUNCEMENT : 15 .10.2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-I, LUDHIANA DATED 6.12.2004 IN CONFIRMING THE PENALTY OF RS. 20,160/- IMPOSED U/S 271(1)(C) OF THE ACT FOR THE ASSESSMENT YEAR 1989-9 0. 2. THE HON'BLE JURISDICTIONAL HIGH COURT VIDE ITS O RDER DATED 14.3.2014 PASSED IN ITA NO. 5 OF 2008 HAS DIRECTED THE TRIBUN AL TO DECIDE THE QUESTION OF LIMITATION AFRESH. THE RELEVANT OBSERVATIONS OF TH E HON'BLE JURISDICTIONAL HIGH COURT ARE AS UNDER:- 2 CM NO. 13150-CII OF 2013 IN RA NO. 77-CII OF 2013 IN ITA NO. 5 OF 2008 COMMISSIONER OF INCOME TAX (I), LUDHIANA V/S. M/S. MARSHAL TIMBER MERCHANTS, SAMRALA ROAD, LUDHIA NA PRESENT: MR. RAJESH SETHI, ADVOCATE FOR THE APPLICA NT. **** CM NO. 13150-CII OF 2013 MR. MANISH VERMA, ADVOCATE, APPEARED ON BEHALF OF T HE RESPONDENT AND STATES THAT HE DOES NOT WISH TO FILE ANY REPLY EITHER TO THE APPLICATION FOR CONDONATION OF DELAY OR TO T HE APPLICATION UNDER SECTION 114 (B) READ WITH ORDER 47 AND SECTIO NS 94 (E) AND 151 OF CPC. THE APPLICATION FOR DELAY HAS BEEN FILE D ON THE GROUND THAT DELAY OCCURED BECAUSE OF CONSULTATION WITHIN T HE OFFICE. IN VIEW THEREOF, APPLICATION IS ALLOWED AND DELAY IS CONDONED. RA NO. 77-CII OF 2013 COUNSEL FOR THE APPLICANT URGES THAT THERE IS A TYP OGRAPHICAL ERROR IN-AS-MUCH AS THE TRIBUNAL WAS TO DECIDE ONLY THE ISSUE OF LIMITATION. AS PER ORDER DATED 03.10.2006, INADVERT ENTLY, IT HAD BEEN DIRECTED THAT THE MISCELLANEOUS APPLICATION BE DECIDED AFRESH. LEARNED COUNSEL FOR THE NON-APPLICANT ACCEPTS THAT THIS MISTAKE HAS TAKEN PLACE AND STATES THAT HE HAS NO O BJECTION IF THE APPLICATION IS ALLOWED AND THE ORDER IS REVIEWED TO THE EXTENT THAT INSTEAD OF DECIDING THE MAIN APPLICATION, THE TRIBU NAL IS DIRECTED TO DECIDE THE QUESTION OF LIMITATION AFRESH. ALLOWED IN THE ABOVE TERMS. SD/- (AJAY TEWARI) JUDGE SD/- (JITENDRA CHAUHAN) JUDGE MARCH 14, 2014 3 3. THE LIMITED ISSUE IN THIS APPEAL IS WHETHER THE PENALTY ORDER DATED 20.07.2001 PASSED BY THE ASSESSING OFFICER IS WITHI N LIMITATION? THE FACTS OF THE CASE ARE THAT THE ASSESSEE SUBMITTED ITS RETURN OF INCOME ON 31.10.1989 DECLARING TOTAL INCOME AT RS. 38,310/-. THE ASSESS ING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS CAME ACROSS A PURCHASE BILL OF RS. 80,000/- BY THE ASSESSEE FROM ONE M/S PALIZI SAW MILLS AND THEY IN TURN REPLIED THAT THE BILL HAVE NOT BEEN ISSUED BY THEM AND THE SIGNATURES WER E ALSO DIFFERENT. THE PARTY FURTHER STATED THAT THEIR BOOKING STATION AND THE N UMBER ON THE RR DID NOT TALLY. THE FURTHER RELEVANT FACT IS THAT THE ASSESSING OFF ICER ON ENQUIRY FROM THE PUNJAB NATIONAL BANK, LUDHIANA FOUND THAT 8 CHEQUES OF RS. 10,000/- EACH PURPORTED TO HAVE BEEN ISSUED TO THE SAID PARTY HAD BEEN ENCASHED AT LUDHIANA ITSELF EITHER ON THE DATE OF ISSUE OR WITHIN A PERI OD OF 4-5 DAYS AFTER THE DATE OF THE CHEQUE. ON THE BASIS OF AFORESAID FACT, THE AS SESSING OFFICER TREATED THE SUM OF RS. 80,000/- AS REPRESENTING INFLATED PURCHASES AND ADDED THE SAME BACK TO THE TOTAL INCOME OF THE ASSESSEE. ON FURTHER APPEAL , THE CIT(A) CONFIRMED THE DISALLOWANCE/ADDITION. THE ASSESSEE FILED AN APPEA L BEFORE THE TRIBUNAL AGAINST THE ORDER OF CIT(A) AND THE TRIBUNAL VIDE ITS ORDER DATED 30.8.2000 IN ITA NO. 2242/CHD/1992 UPHELD THE ACTION OF CIT(A) IN CONFIR MING THE ADDITION. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE ASSESSING OFFICER ALLOWED AN OPPORTUNITY TO THE ASS ESSEE TO EXPLAIN AS TO WHY PENALTY U/S 271(1)(C) OF THE ACT SHOULD NOT BE LEVI ED. THE ASSESSING OFFICER ISSUED A SHOW CAUSE NOTICE ON 19.6.2001 WHICH WAS S ERVED ON THE ASSESSEE ON 23.6.2001. IN RESPONSE TO THE SAID NOTICE THE ASSE SSEE SUBMITTED WRITTEN SUBMISSIONS DATED 28.6.2001. THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES SUBMISSIONS AND CONSEQUENTLY LEVIED A PE NALTY OF RS. 20,160/- U/S 271(1)(C) OF THE ACT STATING THAT THE ADDITION SO M ADE REPRESENTS THE CONCEALED INCOME OF THE ASSESSEE AS IT HAD FURNISHED INACCURA TE PARTICULARS OF INCOME. THE 4 ASSESSING OFFICER PASSED THE PENALTY ORDER ON 20.7. 2001 IMPOSING PENALTY OF RS. 20,160/- 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. IN THE INS TANT CASE THE TRIBUNAL PASSED ORDER IN THE QUANTUM APPEAL IN ITA NO. 2242/ CHD/1992 VIDE ITS ORDER DATED 30.8.2000. AS PER THE RECORDS OF THE REGISTRY OF THIS TRIBUNAL, COPIES OF THE TRIBUNALS ORDER PASSED IN QUANTUM APPEAL IN IT A NO. 2242/CHD/1992 DATED 30.8.2000 WERE SENT TO THE ASSESSEE, CIT, CIT(A), ITO AND DR AFTER RETAINING THE ORIGINAL COPY. IT IS WORTHWHILE TO MENTION HER E THAT COPIES OF THE AFORESAID ORDERS WERE SENT TO COMMISSIONER OF INCOME TAX AND COMMISSIONER OF INCOME TAX (APPEALS) ON 10.10.2000 VIDE DISPATCH NO. 2472 BY POST. IT CAN BE SAFELY PRESUMED THAT ORDERS SENT BY POST MIGHT HAVE BEEN R ECEIVED BY THE ADDRESSEE WITHIN A WEEK. IT IS NOT THE CASE OF THE REVENUE TH AT CIT AND CIT(A) HAVE NOT RECEIVED THE COPIES OF THE ORDERS. IT IS ALSO RELE VANT TO STATE HERE THAT THE ORDERS OF THE TRIBUNAL SENT BY POST WERE NOT RECEIVED BACK . THUS, THERE IS A STRONG PRESUMPTION THAT THE ABOVE AUTHORITIES HAVE RECEIVE D THE ORDERS IN THE MONTH OF OCTOBER, 2000. SHRI S.K. MITTAL, LD. DR SUBMITTED THAT AS PER THE REGISTER MAINTAINED IN THE NAME OF PRO, COPY OF ORDER PASSED BY THE TRIBUNAL WAS RECEIVED VIDE ENTRY NO. 2340/CIT DATED 8.1.2001. I T IS NOT THE CASE OF THE REVENUE THAT THE CIT CONCERNED HAD RECEIVED THE ORD ER OF THE TRIBUNAL ON 8.1.2001. HERE, WE ARE NOT CONCERNED AS TO WHEN T HE PRO HAD RECEIVED THE ORDER. HOWEVER, THE ORDER WAS SENT TO THE COMMISSIO NER CONCERNED ON 10.10.2000 AND THE SAME MIGHT HAVE BEEN RECEIVED BY THE ADDRESSEE WITHIN A WEEK FROM THE DATE OF DISPATCH BY THE REGISTRY. DUR ING THE COURSE OF HEARING, SHRI S.K.MITTAL, LD. DR WAS ASKED TO GIVE THE DATE OF RECEIPT OF ORDER BY THE CIT CONCERNED, BUT NO SATISFACTORY REPLY WAS GIVEN . IT IS ALSO RELEVANT TO MENTION HERE THAT A COPY OR ORDER WAS ALSO SENT TO THE ASSESSEE AT ITS LUDHIANA ADDRESS BY POST AND WHICH WAS RECEIVED BY HIM WITHI N A FEW DAYS FROM THE DATE 5 OF DISPATCH. PROVISO TO SECTION 275(1) OF THE INCOM E-TAX ACT, 1961 SAYS THAT NO ORDER OF IMPOSING PENALTY SHALL BE PASSED AFTER EXP IRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE APPELLAT E TRIBUNAL IS RECEIVED BY THE CHIEF COMMISSIONER / COMMISSIONER. ADMITTEDLY, IN THIS CASE THE ASSESSING OFFICER PASSED THE PENALTY ORDER ON 20.7.2001, WHIC H IS CLEARLY BARRED BY LIMITATION. ADMITTEDLY, THE QUANTUM ORDERS WERE SEN T BY THE TRIBUNAL TO CIT AND CIT(A) ON 10.10.2000. AS PER POSTAL MANUAL, THE LE TTERS ARE NO KEPT PENDING FOR MORE THAN SEVEN DAYS. IN THIS CASE, THE ADDRES SES WERE WELL KNOWN AND PROMINENT OFFICIALS OF THE CENTRAL GOVERNMENT LIKE COMMISSIONER OF INCOME TAX AND COMMISSIONER OF INCOME TAX (APPEALS). SECTI ON 27 OF THE GENERAL CLAUSES ACT, 1897 LAYS DOWN THE MEANING OF SERVICE OF POST AS UNDER:- WHERE ANY CENTRAL ACT OR REGULATION MADE AFTER THE COMMENCEMENT OF THIS ACT AUTHORIZE OR REQUIRES ANY DOCUMENT TO BE SERVED BY POST, WHETHER THE EXPRESSION SERVE OR EITHER OF THE EXPRESSIONS GIVE OR SEND OR ANY OTHER EX PRESSION IS USED, THEN, UNLESS A DIFFERENT INTENTION APPEARS, T HE SERVICE SHALL BE DEEMED TO BE EFFECTED BY PROPERLY ADDRESSI NG, PRE- PAYING AND POSITING BY REGISTERED POST, A LETTER CO NTAINING THE DOCUMENT, AND, UNLESS THE CONTRARY IS PROVED, TO HA VE BEEN EFFECTED AT THE TIME AT WHICH THE LETTER WOULD BE D ELIVERED IN THE ORDINARY COURSE OF POST. 5. THERE IS NOTHING ON RECORD TO SUGGEST THAT THE O RDERS SENT BY POST WERE NOT RECEIVED BY THE ABOVE AUTHORITIES IN THE SECOND HAL F OF OCTOBER, 2000. THEREFORE, THE PENALTY ORDER PASSED ON 20.7.2001 IS CLEARLY BARRED BY THE LIMITATION. ACCORDINGLY, WE CANCEL THE IMPUGNED PE NALTY. M.A. NO. 191/CHD/2006 6. SINCE, WE HAVE ALLOWED THE MAIN APPEAL OF THE AS SESSEE, THEREFORE, WE DISMISS THIS MISC. APPLICATION AS HAVING BECOME INFRUCTUOUS. 6 7. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 227/CHD2005 IS ALLOWED AND M.A. NO. 191/CHD/2006 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.10.2015 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 15TH OCTOBER, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 7