Tangi Hari, Visakhapatnam V. THE DCIT, CENTRAL CIRCLE-2, Visakhapatnam

ITA 273/VIZ/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2111 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-12-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 01-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K SETHI; T S N MURTHY DRS
• Keywords: Unexplained investment; Invalid notice; Search and seizure; Period of limitation; Time period of passing order
• Section: 40A(3); 143(3); 153A; 246

Judgement Text

ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , ' BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NOS.273 TO 278/VIZAG/2013 ( / ASSESSMENT YEARS : 2000-01 & 2002-03 TO 2006-07 RESPECTIVELY) TANGI HARI VISAKHAPATNAM VS. DCIT CENTRAL CIRCLE - 2 VISAKHAPATNAM [ PAN: ABJPT 5607J ] ( ) / APPELLANT) ( *+) / RESPONDENT ) - . / APPELLANT BY : SHRI I. KAMA SASTRY, AR 12- . / RESPONDENT BY : SHRI M.K. SETHI & SHRI T.S.N. MURTHY, DRS . 6 / DATE OF HEARING : 03.12.2015 . 6 / DATE OF PRONOUNCEMENT : 28.01.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), VISAKHAPATNAM DATED 27.3.2013 FOR THE ASSES SMENT YEARS 2000-01, 2002-03, 2003-04, 2004-05, 2005-06 & 2006- 07 RESPECTIVELY. ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 2 SINCE, THE FACTS ARE IDENTICAL AND ISSUES ARE COMMO N, THEY ARE CLUBBED, HEARD TOGETHER AND DISPOSED OF BY WAY OF THIS COMMO N ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.274/VIZAG/2013 : 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIV IDUAL, CARRYING ON BUSINESS AS A PROPRIETARY CONCERN IN THE NAME AND S TYLE OF M/S. HNR CONSTRUCTIONS. THE BUSINESS OF THE ASSESSEE INCLUD ES EXECUTION OF CIVIL CONTRACTS, CONSTRUCTION OF BUILDINGS, APARTMENT COM PLEXES. THERE IS A SEARCH & SEIZURE OPERATION CONDUCTED IN THE BUSINES S PREMISES AS WELL AS RESIDENTIAL PREMISES OF THE ASSESSEE AT VISAKHAP ATNAM AND SRIKAKULAM ON 25.8.2005. DURING THE COURSE OF SEAR CH AND SEIZURE OPERATIONS, SOME INCRIMINATING MATERIAL WAS FOUND A ND SEIZED. SIMULTANEOUSLY, SURVEY OPERATION WAS ALSO CONDUCTED IN THE COMPANYS PREMISES OF THE ASSESSEE AT VISAKHAPATNAM AND VIZIA NAGARAM. 3. THE ASSESSEE HAS FILED THE ORIGINAL RETURN OF IN COME FOR THE ASSESSMENT YEAR 2002-03 ON 1.12.2003 ADMITTING INCO ME OF RS.9,52,139/- BESIDES AGRICULTURAL INCOME OF RS.1,2 5,000/-. CONSEQUENT TO THE SEARCH AND SEIZURE OPERATION, THE ASSESSEE F ILED RETURN OF INCOME IN RESPONSE TO NOTICE ISSUED U/S 153A OF THE ACT ON 20.3.2006 ADMITTING THE TOTAL INCOME, AS ADMITTED IN THE ORIGINAL RETUR N OF INCOME. ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 3 SUBSEQUENTLY ASSESSMENTS WERE COMPLETED U/S 143(3) R.W.S. 153A OF THE ACT ON 18.12.2007. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER GIVEN A DETAILED SHOW CAUSE LETTER POINTING OUT DISCREPANCIES NOTICED AS PER THE SEIZED/IMPOUNDED MATERIAL AND AF TER CONSIDERING THE EXPLANATION GIVEN TO THE SHOW CAUSE LETTER, ADDITIO NS WERE MADE AND ASSESSMENT WAS COMPLETED ON 18.12.2007. 5. THE ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE CIT(A), VISAKHAPATNAM. THE LD. CIT(A) UPHELD THE ORDER OF THE A.O. BY ORDER DATED 30.3.2010. 6. SUBSEQUENT TO THE ADDITIONS CONFIRMED BY THE LD. CIT(A) DATED 30.3.2010, THE A.O. HAS ISSUED A SHOW CAUSE NOTICE AND CALLED THE EXPLANATION FROM THE ASSESSEE THAT WHY PENALTY U/S 271(1)(C) OF THE ACT SHOULD NOT BE IMPOSED FOR CONCEALMENT/FURNISHING IN ACCURATE PARTICULARS OF INCOME VIDE HIS LETTER DATED 11.8.2010. THE ASS ESSEE FILED A REPLY ON 15.9.2010 BY STATING THAT APPEAL HAS BEEN PREFERRED BEFORE THE TRIBUNAL AND REQUESTED TO KEEP THE PENALTY PROCEEDINGS IN AB EYANCE TILL THE DISPOSAL OF THE APPEAL BY THE ITAT. THE A.O. HAS A GAIN ISSUED A LETTER DATED 10.3.2011 BY CALLING EXPLANATION FROM THE ASS ESSEE. THE ASSESSEE ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 4 HAS REITERATED WHAT HE STATED EARLIER THAT TO KEEP THE PROCEEDINGS IN ABEYANCE TILL ITAT PASSES AN ORDER. 7. THE A.O. AFTER CONSIDERING THE EXPLANATION GIVEN BY THE ASSESSEE HE HAS OBSERVED THAT THE ASSESSEE SIMPLY SOUGHT TIM E TO DEFER THE PENALTY PROCEEDINGS TILL DISPOSAL OF THE ASSESSEES APPEAL EXCEPT THAT ASSESSEE HAS NOT OFFERED ANY EXPLANATION ON MERITS OF THE CASE. WITH THE ABOVE OBSERVATION, HE HAS INITIATED THE PENALTY PROCEEDINGS BY OBSERVING THAT IT IS CLEAR THAT THE ASSESSEE HAS RE SORTED TO CONCEALMENT OF INCOME OF UNDISCLOSED INTEREST PAYMENT OF RS.80, 000/-, UNEXPLAINED INVESTMENT IN JEWELLERY WORTH RS.2,47,449/- AND DIS ALLOWANCE OF 40A(3) PAYMENT OF RS.60,000/- WHICH WERE ULTIMATELY ASSESS ED TO TAX WHICH ATTRACTS PENALTY PROVISIONS OF SECTION 271(1)(C) OF THE ACT AND ACCORDINGLY PENALTY IS LEVIED. THE ASSESSEE CARRIE D THE MATTER IN APPEAL BEFORE THE CIT(A) BY RAISING THE FOLLOWING GROUNDS: 1. THE PENALTY PROCEEDINGS HAVE NOT BEEN INITIATED AS REQUIRED BY LAW I.E., THEY HAVE NOT BEEN INITIATED BEFORE THE C OMPLETION OF THE ASSESSMENT PROCEEDINGS. HENCE, THE ORDER PASSED IN CONSEQUENCE IS VOID AB INITIO. 2. THE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C ) DATED 18.12.2007 IS VAGUE AND HENCE THE SAME IS INVALID. HENCE, THE ORDER PASSED IN CONSEQUENCE OF SUCH AN INVALID NOTICE IS VOID AB INITIO. 3. THE PENALTY ORDER U/S 271(1)(C) HAS BEEN PASSED TOT ALLY ON THE BASIS OF FINDINGS IN THE ASSESSMENT ORDER AND FINDI NGS IN THE ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 5 CIT(A) ORDER WITHOUT INDEPENDENT FINDINGS FOR THE L EVY OF PENALTY THROUGH THE PENALTY PROCEEDINGS ARE INDEPENDENT OF ASSESSMENT PROCEEDINGS, HENCE, THE ORDER PASSED U/S 271(1)(C) IS INVALID. 4. THE PENALTY ORDER U/S 271(1)(C) HAS BEEN PASSED BY THE LD. AO WITHOUT GIVING REASONABLE OPPORTUNITY TO THE ASSESS EE AS REQUIRED UNDER SECTION 274 THOUGH THE LD. AO HAS AMPLE TIME TO GIVE A FURTHER OPPORTUNITY TO THE ASSESSEE. 5. THE PENALTY LEVIED FOR THE FOLLOWING ADDITIONS MADE BY THE LD. AO AND SUSTAINED BY THE LD. CIT(A) IS NOT CORRECT EVEN ON MERITS. A. ADDITIONAL CONSTRUCTION AGREEMENT 1000000 B. UNDER REPORTING OF GROSS PROFIT MIMS PROJECT 234816 C. UNACCOUNTED CASH RECEIPTS FROM MIMS PROJECT 64 7000 D. UNDISCLOSED LOANS AND INTEREST 140000 0 (THIS SHOULD BE UNDISCLOSED INVESTMENT) E. DISALLOWANCE U/S 40A(3) 269258 6. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT TH E TIME OF HEARING THE APPELLANT PRAYS FOR JUSTICE. 8. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED B EFORE THE CIT(A) THAT THE ORDER U/S 271(1)(C) OF THE ACT PASSED BY D CIT, CENTRAL CIRCLE(2), VISAKHAPATNAM ON 31.3.2010 IS BARRED BY LIMITATION AS PER THE PROVISIONS OF SECTION 275(1)(A) OF THE ACT. SINCE THE ORDER OF THE CIT(A) HAS BEEN RECEIVED BY THE COMMISSIONER ON 20.4.2010, (AS PER THE FORM NO.36 FILED BEFORE THE TRIBUNAL) AND 6 MONTHS FROM THE END OF THE MONTH, EXPIRED ON 30.10.2010. THE PROVISO TO SECTI ON 275(1)(A) OF THE ACT DOES NOT APPLY IN THE INSTANT CASE AS THE MATTE R IS IN FURTHER APPEAL TO THE TRIBUNAL IN VIEW OF THE JUDGEMENT OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. MOHAIR INVESTMENTS & TRADING COMPANY PVT. LTD. ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 6 (2011) 245 CTR (DELHI) 312 AND SUBMITTED THAT THE D ELHI HIGH COURT WHEREIN A PARAGRAPH 10 OF THE ORDER, IT HAS BEEN HE LD THAT THE PROVISO THUS CARVES OUT AN EXCEPTION FROM THE MAIN SECTION IN AS MUCH AS IN CASE WHERE NO APPEAL IS FILED BEFORE THE TRIBUNAL. THE A.O. MUST IMPOSE PENALTY WITHIN A PERIOD OF 6 MONTHS TO BE RE CKONED FROM THE DATE OF THE RECEIPT OF PENALTY ORDER BY THE CIT(A). HE FURTHER SUBMITTED THAT FROM THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT, IT IS IMPLIED THAT IN A CASE WHERE THE ORDER IS SUBJECT M ATTER OF THE FURTHER APPEAL TO THE TRIBUNAL, THE PENALTY ORDER MUST BE P ASSED WITHIN 6 MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE CIT(A) IS RECEIVED BY THE CIT OR CHIEF CIT. SINCE IN THE INS TANT CASE, THE ORDER OF THE IMPOSING PENALTY HAS BEEN PASSED BEYOND 6 MONTH S FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE CIT(A) HAS BEEN RECEIVED BY THE CIT, THE SAME IS BARRED BY LIMITATION. 9. THE LD. CIT(A) HAS CONSIDERED THE ARGUMENTS OF T HE LD. COUNSEL FOR THE ASSESSEE AND ALSO THE JUDGEMENT OF THE HON BLE DELHI HIGH COURT AND OBSERVED THAT THE PROVISO TO SECTION 275(1)(A) OF THE ACT EXTENDS THE PERIOD OF IMPOSING PENALTY FROM 6 MONTHS TO 1 Y EAR WITHIN THE RECEIPT OF THE ORDER BY THE COMMISSIONER IF THE CIT (A) HAS PASSED THE ORDER AFTER 1 ST JUNE, 2003, CONSEQUENTLY THE PROVISO ONLY DEALS ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 7 WITH THE ORDERS PASSED BY THE CIT(A) DOES NOT PROVI DE FOR AN ORDER PASSED BY THE ITAT DECIDING THE APPEAL FROM THE ORD ER OF THE CIT(A) AND THEREFORE, THE ASSESSING OFFICER HAS A CHOICE E ITHER TO IMPLEMENT THE PENALTY ORDER AFTER THE ORDER OF THE CIT(A) OR ITAT AS THE CASE MAY BE RESULTANTLY IN CASE THE ASSESSING OFFICER IMPOSE A PENALTY AFTER THE CIT(A)S ORDER PASSED AFTER 1 ST JUNE, 2003 THAN PERIOD OF ONE YEAR HAS TO BE RECKONED FROM THE DATE OF THE RECEIPT OF THE ORD ER BY THE COMMISSIONER AND IN THE CASE OF A.O. IMPOSE A PENAL TY AFTER ORDER PASSED BY THE ITAT, THE PERIOD OF 6 MONTHS IS PROVI DED FOR BY THE MAIN SECTION AND CONCLUDED THAT THE IMPUGNED PENALTY ORD ER IS NOT BARRED BY LIMITATION AND IS VALIDLY PASSED WITHIN THE TIME LI MIT PRESCRIBED BY THE STATUTE AND DISMISSED THE GROUND RAISED BY THE ASSE SSEE. 10. THE CIT(A) HAS FURTHER CONSIDERED THE GROUND NO .2 RAISED BY THE ASSESSEE IN RESPECT OF VAGUE NOTICE THAT THE ASSESS EE HAS CONTENDED THAT THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 18.12.2007 IS VAGUE AND HENCE INVALID. THEREFORE, CONSEQUENT PENALTY ORDER IS VOID-AB-INITIO. A COPY OF THE NOTICE WAS STATED TO BE ALSO ENCLOSED. HOWEVER, I FIND A COPY OF THE NOTICE ENC LOSED WAS DATED 18.12.2007, POSSIBLY RELATING TO PENALTY NOTICE ISS UED IN RE-ASSESSMENT PROCEEDINGS FOR THIS APPEAL. THE A.R.S CONTENTION WAS THAT THE NOTICE ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 8 DID NOT CLEARLY INDICATE WHETHER IT WAS LEVIED OF P ENALTY FOR NON FURNISHING OF RETURN OR FOR NON COMPLETION OF NOTIC E OR FOR CONCEALMENT OF PARTICULARS. HENCE, IT WAS CONTENDED THAT THE E NTIRE PENALTY PROCEEDINGS IS VITIATED. HE FURTHER OBSERVED THAT I AM UNABLE TO ACCEPT THE A.R.S CONTENTION, AS I FIND FROM THE PENALTY O RDER THE APPELLATE HAS GIVEN RESPONSE TO THE PENALTY NOTICE AND HAS ALSO R EQUESTED TO KEEP THE PENALTY IN ABEYANCE. THUS, IT IS EVIDENT THAT THE APPELLANT IS AWARE OF THE PURPOSE AND HAS RESPONDED TO THE SAME. IF THE APPELLANT HAS NOT UNDERSTOOD, HE HAS TO RAISE THIS PLEA IN RESPONSE T O THE SHOW CAUSE NOTICE. THIS GROUND OF APPEAL RAISED BY THE ASSES SEE IS DISMISSED AND THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 11. ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER BEF ORE THE TRIBUNAL. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE LD. CIT(APPEALS) IS NOT CORRECT IN REJECTING TH E PLEA OF THE ASSESSEE THAT THE ORDER PASSED BY THE AO UNDER SECTION 271(1)(C) IS BARRED BY LIMITATION. 2. THE PENALTY ORDER U/S 271(1)(C) HAS BEEN PASSED TOT ALLY ON THE BASIS OF FINDINGS IN THE ASSESSMENT ORDER AND FINDI NGS IN THE CIT(A) ORDER WITHOUT INDEPENDENT FINDINGS FOR THE L EVY OF PENALTY THOUGH THE PENALTY PROCEEDINGS ARE INDEPEND ENT OF ASSESSMENT PROCEEDINGS, HENCE, THE ORDER PASSED U/S 271(1)(C) IS INVALID. 3. THE PENALTY ORDER U/S 271(1)(C) HAS BEEN PASSED BY THE LD. AO WITHOUT GIVING REASONABLE OPPORTUN ITY TO THE ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 9 ASSESSEE AS REQUIRED UNDER SECTION 274. 4. THE LD. CIT(APPEALS) IS NOT CORRECT IN DIRECTING TH E AO TO LEVY PENALTY WITH RESPECT TO ADDITIONS CONFIRMED BY THE HONOURABLE TRIBUNAL WITHOUT EVEN CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE ON MERITS. 5. THE APPELLANT CRAVES LEAVE TO AMEND, ALTER OR DELET E ANY OF THE ABOVE GROUNDS OF APPEAL. THE ASSESSEE HAS ALSO RAISED THE FOLLOWING ADDITION AL GROUNDS: 1. THE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C ) DATED 18.12.2007 IS VAGUE AND HENCE THE SAME IS INVALID. HENCE, THE ORDER PASSED IN CONSEQUENCE OF SUCH AN INVALID NOTICE IS VOID AB IN ITIO. 2. THE INITIATION OF PROCEEDINGS IS NOT AS PER LAW, TH E SATISFACTION OF THE AO REGARDING CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IS NOT DISCERNIBLE FROM THE A SSESSMENT ORDER. THE MERE NOTING THAT PENALTY PROCEEDINGS ARE INITIA TED SEPARATELY WILL NOT AMOUNT TO DIRECTION AS MANDATED BY THE PROVISIO NS OF SECTION 271(1B). 3. DETAILED SUBMISSIONS WILL BE MADE AT THE TIME OF AC TUAL HEARING. 12. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) PASSED HIS ORDER ON 30.3.2010 RECEIVED BY TH E CIT ON 20.4.2010. AS PER SECTION 275(1)(A) OF THE ACT, THE A.O. OUGHT TO HAVE PASSED AN ORDER ON OR BEFORE 31.10.2010. HOWEVER, HE HAS PAS SED AN ORDER ON 31.3.2011 AFTER 6 MONTHS FROM THE DATE OF RECEIPT O F THE ORDER BY THE CIT(A) AND THEREFORE, SUBMITTED THAT IN A CASE WHER E THE ORDER OF THE CIT(A) SUBJECT MATTER OF FURTHER APPEAL TO THE TRIB UNAL, THE PENALTY ORDER MUST BE PASSED WITHIN 6 MONTHS FROM THE END O F THE MONTH IN WHICH ORDER OF THE CIT(A) IS RECEIVED BY THE CIT OR CHIEF CIT. IN THIS CASE, THE PENALTY ORDER HAS BEEN PASSED BEYOND THE PERIOD OF 6 MONTHS ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 10 FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE CIT(A) HAS BEEN RECEIVED BY LD. CIT, THE SAME IS BARRED BY LIMITATI ON. FURTHER, TO THE ABOVE, TO SUPPORT HIS ARGUMENTS, HE RELIED ON THE J UDGEMENT OF THE CIT VS. MOHAIR INVESTMENTS & TRADING COMPANY PVT. LIMIT ED (2011) 245 CTR (DELHI) 312. 13. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED T HAT THE PROVISO TO SECTION 275(1)(A) OF THE ACT HAS BEEN INSERTED BY T HE FINANCE ACT ON 1 ST DAY OF JUNE, 2003. ONCE THE CIT(A) PASSED AN ORDER ON OR AFTER THE FIRST DAY OF JUNE, 2013, AS PER THE PROVISO, THE TIME LIM IT OF 6 MONTHS PROVIDED BY THE SECTION 275(1)(A) AND SUBMITTED THA T THE ASSESSING OFFICER HAS TO PASS THE PENALTY ORDER WITHIN A ONE YEAR AND THEREFORE THE PENALTY ORDER PASSED BY THE A.O. WITHIN THE PERIOD OF LIMITATION AND SUBMITTED THAT THE ORDER PASSED BY CIT(A) MAY BE UP HELD. SO FAR AS THE CASE LAW RELIED BY THE LD. COUNSEL FOR THE ASSESSEE , HE HAS SUBMITTED THAT THE HONBLE DELHI HIGH COURT HAS CONSIDERED LI MITATION PERIOD FOR THE LEVY OF PENALTY, IN RESPECT OF ORDER OF TRIBUNA L, NOT IN RESPECT OF ORDER OF CIT(A) AND HELD THAT TIME LIMIT IS WITHIN 6 MONTHS. THEREFORE, THAT JUDGEMENT IS NOT DIRECTLY ON THE ISSUE AND NO APPLICATION TO THE FACTS OF THE PRESENT CASE. ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 11 14. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECO RDS, GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE I SSUE INVOLVED IN THIS APPEAL IS WHETHER THE EXTENDED PERIOD OF ONE YEAR B Y THE PROVISO INSERTED TO FINANCE ACT, 2003 IS AVAILABLE TO THE A SSESSING OFFICER IN THE CASE OF ORDER PASSED BY CIT(A) AND FURTHER APPEAL H AS BEEN PREFERRED BEFORE THE TRIBUNAL? IN THIS CASE THE CIT(A) PASSE D AN ORDER ON 30.3.2010. THE CIT RECEIVED THE ORDER OF THE LD. C IT(A) ON 20.4.2010 AND THE PENALTY ORDER IS PASSED BY THE A.O. ON 31.3 .2011. THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE IS TH AT THE A.O. OUGHT TO HAVE PASSED A PENALTY ORDER I.E. ON OR BEFORE 31.10 .2010 FOR THE REASON THAT AS PER SECTION 275(1)(A) OF THE ACT, THE A.O. HAS A POWER TO PASS A PENALTY ORDER WITHIN THE PERIOD OF 6 MONTHS FROM TH E DATE OF RECEIPT OF ORDER FROM CIT(A) BY CIT. THEREFORE, IN THIS CASE, THE A.O. PASSED AN ORDER AFTER 6 MONTHS AS PER THE JUDGEMENT OF THE DE LHI HIGH COURT, IN THE CASE OF CIT VS. MOHAIR INVESTMENTS & TRADING CO MPANY PVT. LTD. (SUPRA), ONCE AN APPEAL IS PREFERRED AGAINST THE OR DER OF THE CIT(A), THE PROVISO HAS NO APPLICATION. THEREFORE, THE ORDER P ASSED BY THE AO BEYOND 6 MONTHS, HOWEVER, WITHIN ONE YEAR BARRED BY LIMITATION. TO DECIDE THE ABOVE ISSUE, IT IS RELEVANT TO EXAMINE T HE SECTION 275(1)(A) OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE ABOVE PR OVISO IS EXTRACTED AS UNDER: ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 12 [ BAR OF LIMITATION FOR IMPOSING PENALTIES. 275. [(1)] NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHAL L BE PASSED [(A) IN A CASE WHERE THE RELEVANT ASSESSMENT OR OTH ER ORDER IS THE SUBJECT MATTER OF AN APPEAL TO THE [***] COMMISSIONER (APPE ALS) UNDER SECTION 246 [OR SECTION 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 PENALT Y HAS BEEN INITIATED, ARE COMPLETED OR SIX MONTHS FROM THE END OF THE MONTH I N WHICH THE ORDER OF THE [***] COMMISSIONER (APPEALS) OR, AS THE CASE MA Y BE, THE APPELLATE TRIBUNAL IS RECEIVED BY THE [PRINCIPAL CHIEF COMMIS SIONER OR] CHIEF COMMISSIONER OR [PRINCIPAL COMMISSIONER OR] COMMISS IONER, WHICHEVER PERIOD EXPIRES LATER: [ PROVIDED THAT 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 SECTION 246A, AND THE COMMISSIONER ( APPEALS) PASSES THE ORDER ON OR AFTER THE 1 ST DAY OF JUNE, 2003 DISPOSING OF SUCH APPEAL, AN ORDER IMPOSING PENALTY SHALL BE PASSED BEFORE THE E XPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHI CH ACTION FOR IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED, OR WI THIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER OF THE COMMISSIONER (APPEALS) IS RECEIVED BY THE [PRINCIPAL CHIEF COMMISSIONER OR ]CHIEF COMMISSIONER OR [PRINCIPAL COMMISSIONER OR] COMMISSIONER, WHICHEVER IS LATER;] 15. FROM THE PLAIN READING OF THE ABOVE SECTION AND PROVISO THERETO, THE FOLLOWING ISSUES ARE EMERGING. THE LEGAL POSITION BEFORE 1.6.2003, THE TIME LIMIT FOR PASSING OF THE PENALTY ORDER WHERE AN APPEAL HAS BEEN FILED AGAINS T THE ASSESSMENT ORDER TO THE COMMISSIONER (A) U/S 275(1)(A) OF THE ACT. I. ON OR BEFORE THE EXPIRY OF THE FINANCIAL YEAR IN WH ICH ASSESSMENT PROCEEDINGS ARE COMPLETED OR (THIS IS NO APPLICATION IN SO FAR AS PRESENT CASE IS CONCERNED) . ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 13 II. ON OR BEFORE EXPIRY OF 6 MONTHS FROM THE E ND OF THE FINANCIAL YEAR IN WHICH THE ORDER OF THE COMMISSION ER (A) IS RECEIVED BY THE PRINCIPAL CHIEF COMMISSIONER OR CHI EF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIO NER OF INCOME-TAX, WHICHEVER PERIOD EXPIRES LATER. THE LEGAL POSITION HAS BEEN CHANGED AFTER 1.6.2003 BY VIRTUE OF INSERTING THE FINANCE ACT, 2003 (AS PER SECTION 275 (1)(A) OF THE ACT, PROVISO THERETO). THE A.O. CAN PASS THE PENALTY OR DER ON OR BEFORE THE EXPIRY OF THE ONE YEAR FROM THE END OF THE FINANCIA L YEAR IN WHICH THE ORDER OF THE CIT(A) IS RECEIVED BY THE PRINCIPAL CH IEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COM MISSIONER OF INCOME TAX, WHICHEVER PERIOD EXPIRES LATER. THE PROVISO INSERTED BY THE FINANCE ACT, 2003 W.E.F . 1.6.2003 THE EXTENDED PERIOD OF LIMITATION TO PASS THE PENALTY O RDER EXTENDED BY THE PROVISO, FROM 6 MONTHS TO ONE YEAR IN THE CASE WHER E THE A.O. DECIDED TO PASS THE PENALTY ORDER WITHOUT WAITING THE ITAT ORDER IF AT ALL APPEAL IS PREFERRED. SO FAR AS LIMITATION PERIOD IN RESPE CT OF APPEAL PREFERRED AGAINST THE ORDER OF THE CIT(A) TO THE TRIBUNAL, TH E MAIN PROVISION ALREADY PRESCRIBED A TIME LIMIT OF 6 MONTHS. THERE FORE, THE PROVISO ONLY DEALS WITH THE EXTENDED PERIOD OF LIMITATION TO PAS S A PENALTY ORDER ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 14 FROM 6 MONTHS TO ONE YEAR, IN THE CASE OF THE ORDER OF CIT(A). THEREFORE, IN OUR OPINION, THE ORDER PASSED BY THE ASSESSING OFFICER IN THE PENALTY ORDER WITHIN THE PERIOD OF ONE YEAR AND THEREFORE IT IS AS PER THE LIMITATION PERIOD PRESCRIBED BY THE ACT. 16. SO FAR AS CASE LAW RELIED BY THE LD. COUNSEL FO R THE ASSESSEE, IN CASE OF MOHAIR INVESTMENTS AND TRADING COMPANY LTD. (SUPRA), THE ISSUE BEFORE THE HONBLE DELHI HIGH COURT IS THAT W HETHER AN ORDER PASSED BY THE A.O. WITHIN 6 MONTHS FROM THE ORDER O F THE TRIBUNAL COULD BE CONSIDERED TIME BARRED FOR THE REASON IT IS BEYO ND THE TIME LIMIT PRESCRIBED BY THE PROVISO. THE HONBLE DELHI HIGH COURT HAS CONSIDERED AND OBSERVED THAT WE ARE OF THE OPINION THAT THE L ATER SECTION I.E. THE PROVISO WHICH WAS INTRODUCED LATER ON DOES NOT DILU TE OR IN ANY MANNER RATHER THAN NUGATORY THE MAIN PROVISION WHICH CAN O NLY BE READ TO MEAN THAT THE LIMITATION PERIOD FOR LEVY OF PENALTY, ONL Y IN THE CASE OF THE ORDER OF THE TRIBUNAL TO BE PROVIDED UNDER THE MAIN SECTION NOT OTHERWISE. IT MEANS, IN CASE ASSESSING OFFICER IMP OSES PENALTY, AFTER 1 ST JUNE, 2003, THE LIMITATION PERIOD OF ONE YEAR HAS T O BE RECKONED FROM THE DATE OF THE RECEIPT OF THE ORDER BY THE COMMISS IONER AND IN CASE ASSESSING OFFICER IMPOSES PENALTY ORDER PASSED BY T HE ITAT, THEN THE PERIOD OF 6 MONTHS IS PROVIDED BY THE MAIN SECTION. THIS JUDGEMENT OF ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 15 THE HONBLE DELHI HIGH COURT HAS NO RELEVANCE TO TH E ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE AND THEREFORE, WE REJE CT THE ARGUMENT OF THE LD. COUNSEL AND WE HOLD THAT THE ORDER PASSED B Y THE CIT(A) AFTER 1 ST JUNE, 2003, THE EXTENDED PERIOD OF LIMITATION FROM 6 MONTHS TO 1 YEAR IS AVAILABLE TO THE ASSESSING OFFICER, TO PASS A PENALTY ORDER WITHIN THE PERIOD OF 1 YEAR. IN THE PRESENT CASE, THE ASS ESSING OFFICER PASSED THE PENALTY ORDER WITHIN THE PERIOD OF 1 YEAR. THE REFORE, THE PENALTY ORDER PASSED BY THE A.O. IS WITHIN THE TIME LIMIT P ROVIDED BY THE PROVISO TO SECTION 275(1)(A) OF THE ACT. IN THE CASE OF RA YALA CORPORATION PVT. LTD. VS. UOI & ORS. 288 ITR 452 (2007), THE HONBLE MADRAS HIGH COURT HAS CONSIDERED PROVISO TO SECTION 275(1)(A) OF THE ACT VIS--VIS APPEAL TO THE TRIBUNAL AND HELD THAT THE PROVISO TO SECTION 2 75(1)(A) OF THE ACT, DOES NOT NULLIFY THE AVAILABILITY TO THE THIRD RESP ONDENT OF THE PERIOD OF LIMITATION OF 6 MONTHS FROM THE END OF THE MONTH WH EN THE ORDER OF THE TRIBUNAL, IS RECEIVED BY THE THIRD RESPONDENT. THE HONBLE MADRAS HIGH COURT ALSO SUPPORTS OUR VIEW EXPRESSED ABOVE. IN V IEW OF THE ABOVE, WE FIND THAT THE LD. CIT(A) HAS RIGHTLY HELD THAT T HE PENALTY ORDER PASSED BY THE A.O. WITHIN THE PERIOD OF LIMITATION I.E. WITHIN 1 YEAR AS PER THE PROVISO TO SECTION 275(1)(A) OF THE ACT. T HUS, WE UPHOLD THE ORDER OF THE CIT(A). THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 16 17. THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE B EFORE US AND SUBMITTED THAT THE SAME MAY BE ADMITTED AND DECIDED , WHICH IS EXTRACTED AS UNDER: 1. THE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271(1)(C ) DATED 18.12.2007 IS VAGUE AND HENCE THE SAME IS INVALID. HENCE, THE ORDER PASSED IN CONSEQUENCE OF SUCH AN INVALID NOTI CE IS VOID AB INITIO. 2. THE INITIATION OF PROCEEDINGS IS NOT AS PER LAW, TH E SATISFACTION OF THE AO REGARDING CONCEALMENT OF INCOME OR FURNISHIN G OF INACCURATE PARTICULARS OF INCOME IS NOT DISCERNIBLE FROM THE ASSESSMENT ORDER. THE MERE NOTING THAT PENALTY PRO CEEDINGS ARE INITIATED SEPARATELY WILL NOT AMOUNT TO DIRECTION A S MANDATED BY THE PROVISIONS OF SECTION 271(1B). 3. DETAILED SUBMISSIONS WILL BE MADE AT THE TIME OF AC TUAL HEARING. 18. IN SO FAR AS ABOVE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS CONCERNED, WE FIND THAT THE ASSESSEE HAS RAISED VER Y SAME GROUND BEFORE THE CIT(A) AS A GROUND NO.2. IN RESPECT OF VAGUE NOTICE, THE LD. CIT(A) ALREADY CONSIDERED THE VALIDITY OF THE NOTIC E AND HE HAS OBSERVED THAT IN RESPONSE TO THE PENALTY NOTICE, THE A.O. RE SPONDED AND REQUESTED TO KEEP THE PENALTY ORDER IN ABEYANCE. T HEREFORE, THE ASSESSEE AFTER KNOWING THE PARTIES FOR WHICH THE PE NALTY NOTICE WAS ISSUED AND RESPONDED TO THE SAME, HE CANNOT BE SAID THAT HE HAS NOT UNDERSTOOD THE CONTENTS OF THE NOTICE. THEREFORE, WITHOUT RAISING THE PLEA BEFORE THE A.O. IN RESPECT OF THE SHOW CAUSE N OTICE, HAVING PARTICIPATED IN THE PENALTY PROCEEDINGS, NOW RAISIN G THE OBJECTION IN RESPECT OF VAGUE NOTICE IS NOT ACCEPTABLE AND REJEC T THE SAME. ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 17 19. WE FIND THAT ONCE THE ASSESSEE ALREADY RAISED AN ISSUE IN RESPECT OF VAGUE NOTICE, THE SAME IS CONSIDERED BY THE LD. CIT(A) AND AGAIN RAISING THE SAME ISSUE AS AN ADDITIONAL GROUND IS N OT PERMISSIBLE. 20. THE ASSESSEE CAN RAISE AN ADDITIONAL GROUND BEF ORE THE TRIBUNAL ONLY WHERE HE HAS NOT RAISED THE GROUND BEFORE THE CIT(A). ONCE HE RAISED THE GROUND BEFORE THE CIT(A) AND CIT(A) ADJU DICATED THE SAME, ONLY OPTION AVAILABLE TO THE ASSESSEE IS TO QUESTIO N THE ORDER OF CIT(A) IN THE COURSE OF APPEAL BEFORE THE ITAT NOT BY RAIS ING ADDITIONAL GROUND. THUS THE ABOVE ADDITIONAL GROUND RAISED BY THE ASSE SSEE IS DISMISSED. HOWEVER, AFTER CAREFUL CONSIDERATION OF THE ORDERS OF THE AUTHORITIES BELOW AND ALSO PARTICULARLY THE PENALTY ORDER PASSE D BY THE A.O., WE FIND THAT THE ASSESSEE HAS NOT FILED THE DETAILS IN RESP ECT OF INTEREST PAYMENT, UNEXPLAINED INVESTMENT IN JEWELLERY, BOGUS SUNDRY C REDITORS. THEREFORE, THE A.O. AFTER CONSIDERING THE NON-FILING OF THE AB OVE DETAILS AND HELD THAT THE ASSESSEE HAS CONCEALED THE INCOME AND CAME TO A CONCLUSION THAT IT IS A FIT CASE TO LEVY THE PENALTY AND ACCOR DINGLY PENALTY HAS BEEN LEVIED. WE FIND THAT THE ASSESSEE HAS NOT FILED DE TAILS IN RESPECT OF THE INTEREST PAYMENT, UNEXPLAINED INVESTMENT IN JEWELLE RY, SUNDRY CREDITORS. THEREFORE, BY FILING INACCURATE PARTICULARS, THE AS SESSEE HAS CONCEALED THE INCOME. IN THE PRESENT CASE, SECTION 271(1)(C) OF THE ACT ATTRACTS ON ITA NOS.273 TO 278/VIZAG/2013 TANGI HARI, VISAKHAPATNAM 18 BOTH THE COUNTS I.E. CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS. THEREFORE, THE PENALTY LEV IED BY THE A.O. IS JUSTIFIED AND THE NOTICE ISSUED BY THE A.O. CANNOT BE SAID THAT A VAGUE NOTICE. IN VIEW OF THE ABOVE, THE ORDER PASSED BY THE CIT(A) IN THIS COUNT IS UPHELD. THUS, THE APPEAL FILED BY THE ASS ESSEE IS DISMISSED. 21. THE ISSUE INVOLVED IN OTHER ASSESSMENT YEARS I. E. 2000-01 & 2003-04 TO 2006-07 ARE SIMILAR TO THE FACTS AND ISS UES WHICH ARE ADJUDICATED IN ABOVE APPEAL FOR THE ASSESSMENT YEAR 2002-03. THEREFORE, THE OTHER APPEALS ARE ALSO DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28 TH JAN16. SD/- SD/- ( . ) (. ) ( G. MANJUNATHA) ( V. DURGA RAO ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER : /VISAKHAPATNAM: > / DATED : 28.01.2016 VG/SPS . 1 @: A:/ COPY OF THE ORDER FORWARDED TO :- 1. - / THE APPELLANT SHRI TANGI HARI, 9-13-93, NEW RESAPUVANIPALEM, CBM COMPOUND, VISAKHAPATNAM-530 003. 2. 12- / THE RESPONDENT THE DCIT CENTRAL CIRCLE-2, VISAKHAPATNAM 3. C / THE CIT, VISAKHAPATNAM 4. C () / THE CIT(A), VISAKHAPATNAM 5. : 1 H, 6 H , : / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER