M/s Five Star Offset Printers, Cochin V. DCIT, Ernakulam

ITA 343/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58300 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 07-03-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 28-05-2010
• Court: TRIBUNAL
• Keywords: Period of limitation; Time period of passing order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A NO. 351/COCH/2010 ASSESSMENT YEAR 2003-04 M/S. ERNAKULAM MEDICAL CENTRE P. LTD., N.H. BYE PASS ROAD, PALARIVATTOM, KOCHI-682 028 [PAN:AAACE 7264K] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-2(1), ERNAKULAM. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI A.S.NARAYANAMOORTHY, CA REVENUE BY SMT. VIJAYAPRABHA, JR. DR DATE OF HEARING 01/03/2012 DATE OF PRONOUNCEMENT 9/03/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31-3-2010 PASSED BY LD CIT(A)-II, KOCHI AND IT RELATES TO THE ASSESSMENT Y EAR 2003-04. THE PENALTY OF RS.1.00 LAC LEVIED BY THE AO U/S 271B OF THE ACT, HAVING BE EN CONFIRMED BY LD CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 2. THE FACTS RELATING TO THE SAID ISSUE ARE STA TED IN BRIEF. THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF RUNNING A MULTI-SPECIALITY HOSPITAL. THE ASSESSEE WAS REQUIRED TO FILE TAX AUDIT REPORT AS P ER THE PROVISIONS OF SEC. 44AB OF THE ACT WITH IN THE EXTENDED DATE OF 30-11-2003. HOWEV ER, THE ASSESSEE FILED THE REPORT ONLY ON 29.3.2004 RESULTING IN A DELAY OF ABOUT 4 MONTHS . THE EXPLANATION OFFERED BY THE I.T.A. NO. 351/COCH/2010 2 ASSESSEE WAS NOT CONVINCING TO BOTH THE TAX AUTHORI TIES. SINCE THE LD CIT(A) CONFIRMED THE PENALTY, THE ASSESSEE HAS COME ON APPEAL BEFORE US. 3. BEFORE US, THE LD A.R CONTENDED THAT THE INS TANT PENALTY ORDER IS BARRED BY LIMITATION AND HENCE THE SAME IS LIABLE TO BE QUASHED. SINCE THE SAID ISSUE GOES TO THE ROOT OF THE MATTER, WE PREFER TO ADJUDICATE THE SAME FIRST. IN SUPPORT OF THIS CONTENTION, THE LD A.R PLACED RELIANCE ON THE DECISION OF HONBLE DELHI HI GH COURT IN THE CASE OF SUBODH KUMAR BHARGAVA VS. CIT REPORTED IN (2009)(309 ITR 3 1) AND SUBMITTED THAT THE PENALTY ORDER SHOULD HAVE BEEN PASSED WITHIN 6 MONTHS FROM THE END OF THE MONTH IN WHICH THE ACTION FOR IMPOSITION OF PENALTY WAS INITIATED. TH E SAID DECISION HAS BEEN RENDERED IN THE CONTEXT OF SEC. 275(1)(C) OF THE ACT WHICH READS AS UNDER:- (C) IN ANY OTHER CASE, AFTER THE EXPIRY OF THE FIN ANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED OR SIX MONTHS FROM TH E END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED , WHICHEVER PERIOD EXPIRES LATER. IN THE CASE OF SUBODH KUMAR BHARGAVA, SUPRA, THE HO NBLE DELHI HIGH COURT HAS HELD THAT THE PERIOD OF LIMITATION FOR THE PENALTY PROCE EDING U/S 271B OF THE ACT IS SIX MONTHS FROM THE END OF MONTH IN WHICH THE ACTION FOR IMPOS ITION OF PENALTY WAS INITIATED. 4. IN THE INSTANT CASE, THE SHOW CAUSE NOTICE U /S 274(1) OF THE ACT FOR IMPOSITION OF PENALTY WAS ISSUED ON 29-07-2007. AS PER THE DECI SION OF HONBLE DELHI HIGH COURT, THE PENALTY PROCEEDING BECOMES TIME BARRED BY 31.01.200 8, I.E., ON COMPLETION OF SIX MONTHS FROM 31.7.2007. HOWEVER, THE AO HAS PASSED THE PE NALTY ORDER ONLY ON 28-03-2008, I.E. AFTER THE EXPIRY OF LIMITATION PERIOD OF SIX MONTHS . HENCE, BY RESPECTFULLY FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT, WE HOLD THAT THE IMPUGNED PENALTY ORDER IS BARRED BY LIMITATION. ACCORDINGLY WE SET ASIDE THE ORDERS OF BOTH THE LD CIT(A) AND THE AO. 5. SINCE, WE HAVE SET ASIDE THE ORDERS OF LOWER AUTHORITIES ON THE LEGAL GROUND; WE DO NOT FIND IT NECESSARY TO ADDRESS THE GROUNDS RELATI NG TO THE MERITS OF THE CASE. I.T.A. NO. 351/COCH/2010 3 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED ACCORDINGLY ON 9/3/2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 9 TH MARCH, 2012 GJ COPY TO: 1. M/S. ERNAKULAM MEDICAL CENTRE P. LTD., N.H. BYE PASS ROAD, PALARIVATTOM, KOCHI-682 028 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -2(1), ERNAKULAM.. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, KOC HI. 4. THE COMMISSIONER OF INCOME-TAX, KOCHI 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE . BY ORDER (ASSISTANT REGISTRAR) ITAT, COCHIN