Hawa Singh, Gurgaon V. ITO, Ward-14), Gurgaon

ITA 2750/DEL/2022

AI Insights

The case involves three appeals by the assessee, Hawa Singh, against the penalty orders confirmed by the Commissioner of Income Tax (Appeals) for the assessment years 2008-09, 2009-10, and 2010-11. The penalties were levied under section 271(1)(b) of the Income Tax Act, 1961 for non-compliance with a notice under section 142(1). The primary legal contention was regarding the timeliness of the penalty orders in the context of extended deadlines due to the COVID-19 pandemic. The Tribunal examined whether the penalties were imposed within the legally permissible time frame, considering various extensions granted by the CBDT during the pandemic.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302632 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-08-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 21-11-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation; Time period of passing order; Set aside
• Section: 144; 142(1)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE DR. BRR KUMAR, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA Nos. 2749, 2750 & 2751/Del/2022 Asstt. Years: 2008-09, 2009-10 & 2010-11 O R D E R PER ASTHA CHANDRA, JM Three appeals filed by the assessee are directed against the three separate orders all dated 22.09.2022 of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (“CIT(A)”) pertaining to Assessment Year (“AY”) 2008- 09, 2009-10 and 2010-11 confirming penalty of Rs. 10,000/- levied by the Assessing Officer (“AO”) in each of the AY under section 271(1)(b) for non compliance of notice under section 142(1) of the Income Tax Act, 1961 (the “Act”). 2. We have heard the Ld. Representative of the parties. The Ld. AR submitted that the limitation to pass penalty under section 275 of the Act is 6 months or end of the financial year whichever is later. However, due to Covid Pandemic, limitation of 31.03.2020 was extended to one year i.e. Hawa Singh, S/o Shri Bharat Singh, Abhaypur, Damdama Road, Sushil Nagar, Damdama, Sohna, Gurgaon, Haryana- 122103. PAN CFGPS5489L Vs. ITO, Ward-1(4), Gurgaon. (Appellant) (Respondent) Assessee by: Shri Arun Kumar Jain, Advocate Department by: Shri Vivek Kumar Upadhyay, Sr. DR Date of Hearing: 31.08.2023 Date of pronouncement: 25.09.2023 ITA Nos. 2749, 2750 & 2751/Del/2022 2 31.03.2021. This limitation was further extended for three months till 30.06.2021. The Ld. AR further pointed out that the CBDT again extended the limitation till 30.09.2021 and placed on record the Notification No. 74/2021/F. No. 370142/35/2020-TPL dated 25.06.2021. According to him, the penalty order ought to have been passed by the Ld. AO on or before 31.03.2022 but he passed the penalty orders for all the AY(s) on 01.04.2022 and not on 31.03.2022 or earlier. Therefore, all the three penalty orders passed by the Ld. AO are barred by limitation and deserve to be cancelled. 3. The Ld. DR submitted that the CBDT granted extension till 31.03.2022 and therefore the penalty orders are not time barred. The Ld. AR submitted that even if for the sake of argument it is accepted as submitted by the Ld. DR that limitation was extended by the CBDT till 31.03.2022, then also the penalty levied on 01.04.2022 is barred by limitation by one day. 4. The Tribunal required the Ld. DR to bring on record CBDT Circular extending the period of limitation till 31.03.2022. However, despite sufficient opportunity given to the Ld. DR, no such circular was brought to our notice. 5. Record shows that assessment in the case of the assessee for AY 2008- 09, 2009-10 and 2010-11 was completed ex-parte under section 144 r.w. section 254 of the Act vide order dated 16.10.2019 on income of Rs. 20,73,814/-, Rs. 21,53,157/- and Rs. 22,48,208/- respectively. Simultaneously, penalty notice under section 271(1)(b) of the Act all dated 16.10.2019 was issued and served upon the assessee. 6. On the facts narrated above, the parties agree that the provisions of section 275(1)(c) of the Act would apply. It reads as under:- “275 (1) No order imposing penalty under this chapter shall be passed- xxx xxx (c) in any other case, after the expiry of the financial year in which the proceeding, in the course of which action for the imposition of penalty ITA Nos. 2749, 2750 & 2751/Del/2022 3 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” 6. In the case of the assessee as per section 275(1)(c) of the Act the limitation to pass penalty order subsisted upto 31.03.2020 or 30.04.2020 whichever expires later. Admittedly, penalty order(s) could not be passed within the said limitation period due to Covid Pandemic. The assessee has placed before us CBDT Circular/Notification dated 25.06.2021 as per which limitation to pass penalty order was extended till 30.09.2021. However, the penalty orders were not passed till 30.09.2021. Ld. DR submitted that CBDT extended the limitation period till 31.03.2022 but failed to produce copy of Board’s Circular / Notification whereby the limitation was extended till 31.03.2022. As a matter of fact, the impugned penalty orders have not been passed on 31.03.2022 also. All the three impugned penalty orders have been passed on 01.04.2022. Obviously, even if the submission of the Ld. DR is taken as correct that the Board extended the limitation to pass penalty order till 31.03.2022, the impugned penalty orders have not been passed within the limitation period. These penalty orders have been passed on 01.04.2022 which are barred by limitation by one day. We, therefore agree with the submission of the Ld. AR and hold that the impugned penalty orders are time-barred. Accordingly, the orders of the Ld. CIT(A) are set aside and all the three penalty orders of the Ld. AO are cancelled. 7. In the result, all the three appeals of the assessee for AY 2008-09, 2009-10 and 2010-11 are allowed. Order pronounced in the open court on 25 th September, 2023. sd/- sd/- (DR. BRR KUMAR) (ASTHA CHANDRA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 25/09/2023 Veena ITA Nos. 2749, 2750 & 2751/Del/2022 4 Copy forwarded to - 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr. PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order