Sh. Ajit Singh Rana, Prop, Jalandhar V. The Asstt. Commissioner of Income-tax, Jalandhar

ITA 455/ASR/2011

• Counselvise Citation: 45520914 RSA 2011
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-12-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 16-08-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S S KALRA
• Keywords: Transfer pricing; International transaction; Period of limitation; Advance ruling; Initiation of penalty proceedings; Reasonable cause; Time period of passing order; Ignorance of law
• Section: 92C; 143(3); 92E; 27; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NOS.454, 455 & 456(ASR)/2011 ASSESSMENT YEARS:2003-04, 2004-05 & 2005-6 PAN :AALPR3656E SH. AJIT SINGH RANA, VS. ASSTT. COMMR. OF INCOME- TAX, M/S. GRIPWELL FORGINGS & TOOLS, RANGE-II, JALANDHA R. E-35, INDUSTRIAL AREA, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. S.S. KALRA, CA RESPONDENT BY:SH. TARSEM LAL, DR DATE OF HEARING: 04/12/2012 DATE OF PRONOUNCEMENT:11/12/2012 ORDER PER BENCH ; THESE THREE APPEALS OF THE ASSESSEE ARISE FROM THR EE DIFFERENT ORDERS OF CIT(A) JALANDHAR, EACH DATED 13.06.2011 FOR THE ASSESSMENT YEARS 2003- 04, 2004-05 & 2005-06 RESPECTIVELY. 2. IN ITA NO.454(ASR)/2011, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LD. CIT(A) IS AGAINST LAW AND FACTS OF THE CASE. 2. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE A.O. IN RESPECT OF LEVY OF PENALTY U/S 271BA OF THE INCOME TAX AMOUNTING TO RS. ONE LAKH. ITA NOS. 454, 455, & 456 2 3. THAT WHILE UPHOLDING THE ORDER OF THE AO THE LD. CIT(A0 HAS LOST SIGHT OF THE FACT THAT THE DEFAULT OF NON ATTA CHING THE REPORT WITH THE RETURN OF INCOME AS CONTEMPLATED IN SECTI ON 92E READ WITH RULE 10E WAS JUST TECHNICAL IN NATURE ALTHOUGH THE REPORT WAS DULY OBTAINED BEFORE TIME AND FILED WHEN REQUI RED. 4. THAT THE CASE LAWS REFERRED WHICH WERE DIRECTLY ON THE SUBJECT HAVE NOT BEEN APPRECIATED. 5. SUCH OTHER GROUNDS OF APPEAL AS MAY BE URGED ON HEARING. 3. IN ITA NO.455(ASR)/2011, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LD. CIT(A) IS AGAINST LAW AND FACTS OF THE CASE. 2. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE A.O. IN RESPECT OF LEVY OF PENALTY U/S 271BA OF THE INCOME TAX AMOUNTING TO RS. ONE LAKH. 3. THAT WHILE UPHOLDING THE ORDER OF THE AO THE LD. CIT(A0 HAS LOST SIGHT OF THE FACT THAT THE DEFAULT OF NON ATTA CHING THE REPORT WITH THE RETURN OF INCOME AS CONTEMPLATED IN SECTI ON 92E READ WITH RULE 10E WAS JUST TECHNICAL IN NATURE ALTHOUGH THE REPORT WAS DULY OBTAINED BEFORE TIME AND FILED WHEN REQUI RED. 4. THAT THE CASE LAWS REFERRED WHICH WERE DIRECTLY ON THE SUBJECT HAVE NOT BEEN APPRECIATED. 5. SUCH OTHER GROUNDS OF APPEAL AS MAY BE URGED ON HEARING. 4. IN ITA NO.456(ASR)/2011, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LD. CIT(A) IS AGAINST LAW AND FACTS OF THE CASE. 2. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE A.O. IN RESPECT OF LEVY OF PENALTY U/S 271BA OF THE INCOME TAX AMOUNTING TO RS. ONE LAKH. ITA NOS. 454, 455, & 456 3 3. THAT WHILE UPHOLDING THE ORDER OF THE AO THE LD. CIT(A0 HAS LOST SIGHT OF THE FACT THAT THE DEFAULT OF NON ATTA CHING THE REPORT WITH THE RETURN OF INCOME AS CONTEMPLATED IN SECTI ON 92E READ WITH RULE 10E WAS JUST TECHNICAL IN NATURE ALTHOUGH THE REPORT WAS DULY OBTAINED BEFORE TIME AND FILED WHEN REQUI RED. 4. THAT THE CASE LAWS REFERRED WHICH WERE DIRECTLY ON THE SUBJECT HAVE NOT BEEN APPRECIATED. 5. SUCH OTHER GROUNDS OF APPEAL AS MAY BE URGED ON HEARING. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS RAISED ADDI TIONAL GROUNDS OF APPEAL IN ITA NOS. 454 & 455(ASR)/2011 FOR THE ASSE SSMENT YEARS 2003-04 & 2004-05, WHICH ARE COMMON ADDITIONAL GROUNDS AND ARE REPRODUCED HEREUNDER: (1) THAT THE PENALTY IMPOSED U/S 271BA OF THE INCOM E TAX ACT IS BARRED BY LIMITATION HAVING BEEN IMPOSED BEYOND A R EASONABLE PERIOD OF FOUR YEARS FROM THE END OF THE FINANCIAL YEAR 31/03/2003 AS PER THE LAW ENUNCIATED BY THE APEX CO URT IN THE CASE OF STATE OF PUNJAB VS. BHATINDA DISTT. CO-O P. MILLS P. UNION LTD. REPORTED AS (2007) 11 SCC 363 AND FOLLOW ED BY THE DELHI HIGH COURT IN (2008) 217 (DEL) 392 AND BY HIM ACHAL HIGH COURT IN (2012) 250 CTR (HP) 113. (2) THAT THE PENALTY IMPOSED U/S 271BA IS ALSO TIME BARRED AS PER SECTION 275 OF THE INCOME TAX ACT WHEN WE SEE THAT THE SAME WAS NOT INITIATED IN ANY PROCEEDINGS AND THEREFORE THE ONLY PERIOD AVAILABLE WITH THE AO FOR IMPOSITION OF PENA LTY WAS INITIATED. 5.1. FOR THE ASSESSMENT YEAR 2005-06, THE ASSESSEE HAS RAISED THE FOLLOWING ADDITIONAL GROUND OF APPEAL: THAT THE PENALTY IMPOSED U/S 271BA IS TIME BARRED AS PER SECTION 275 OF THE INCOME TAX ACT WHEN WE SEE THAT THE SAME WAS NOT INITIATED IN ANY PROCEEDINGS AND THEREFORE THE ONLY PERIOD AVAILABLE ITA NOS. 454, 455, & 456 4 WITH THE A.O. FOR IMPOSITION OF PENALTY WAS SIX MON THS FROM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENA LTY WAS INITIATED. 6. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSESSE E, SH. S.S. KALRA, CA THAT THESE ARE LEGAL GROUNDS AND THE FACTS ARE ALRE ADY ON RECORD WHICH NEED NO FURTHER ENQUIRY OR OTHERWISE. THESE GROUNDS WERE TAKEN BEFORE THE LD. CIT(A), WHO HAD ADJUDICATED THE ISSUES RAISED BEFOR E HIM. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE FOR T HE ASSESSMENT YEARS 2003- 04 & 2004-05 ARE PURELY LEGAL AND WERE AVAILABLE B EFORE THE LD. CIT(A). IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT I N THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT REPORTED IN 229 ITR 383, WE ADMIT THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE. 8. THE BRIEF FACTS IN THE GROUNDS AND ADDITIONAL GR OUNDS RAISED BY THE ASSESSEE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE AY 2006-07 THE AO FOUND THAT THE ASSESSEE HAD NOT FURN ISHED THE AUDITORS REPORT REGARDING ITS INTERNTIONAL TRANSACTION AS RE QUIRED TO BE FURNISHED U/S 92E OF THE I.T. ACT, 1961. THE AO, THEREFORE, INITI ATED PENALTY PROCEEDINGS U/S 271 BA OF THE ACT. IN RESPONSE TO THE SHOW CAUS E NOTICE DATED 14.05.2008, THE ASSESSEE REPLIED THAT: .IN THIS RESPECT YOUR ATTENTION IS INVITED TO THE FACT THAT THIS SECTION IS NEW AND EVEN THE BOARD HAS ACCEPTED THIS IN CI RCULAR NO.12 DATED ITA NOS. 454, 455, & 456 5 23.08.2001 REPORTED AT (2001) 169 CTR (STATUTES) 45 . BUT HOWEVER THE REPORT U/S 92E READ WITH RULE 10E HAS BEEN OBTA INED WITHIN TIME AND IS ENCLOSED HEREWITH. THUS, THIS IS A TECHNICAL DEFAULT ONLY. MOREOVER, NO PROCEEDINGS FOR THE ABOVE YEAR ARE PEN DING. SINCE THE REPORT IS BEING SUBMITTED AND THE DEF AULT BEING TECHNICAL IN NATURE, IT IS REQUESTED THAT PENA LTY PROCEEDINGS MAY PLEASE BE DROPPED. 8.1. THE AO, HOWEVER, DID NOT ACCEPT THE ASSESSEES EXPLANATION AND TAKING SUPPORT FROM THE DECISION OF THE HONBLE HIG H COURT OF RAJASTHAN REPORTED AT 211 CTR 156, HELD THAT THE PENALTY U/S 271BA WAS NOT RELATED TO ASSESSMENT PROCEEDINGS AND WAS INDEPENDENT. THE PLE A OF THE ASSESSEE THAT THERE WAS A REASONABLE CAUSE FOR THE DEFAULT AS HIS CHARTERED ACCOUNTANT WAS NOT AWARE OF THE NEW PROVISIONS OF TRANSFER PRICING , WAS ALSO NOT ACCEPTED BY THE AO. THE AO FURTHER HELD THAT BY NOT FILING THE REQUISITE REPORT WITH THE RETURN OF INCOME, THE ASSESSEE COMPANY WAS MISLEADI NG THE DEPARTMENT REGARDING ITS TRUE BUSINESS OPERATIONS AND WAS ALSO PURPOSEFULLY TRYING TO ESCAPE THE SCRUTINY ON THESE TRANSACTIONS. HE HELD THAT AN OVERSIGHT COULD NOT BE ACCEPTED AS REASONABLE CAUSE FOR NOT FILING THE REPORT U/S 92E, BY PLACING RELIANCE ON THE DECISION OF THE AAR IN THE CASE OF INSTRUMENTATION CORPORATION REPORTED AT 272 ITR 499, IN WHICH IT W AS HELD THAT : .IN THE LIGHT OF THE ABOVE DISCUSSION, THE APPLIC ANT HA NO OPTION BUT TO COMPLY WITH THE PROVISIONS OF THE ACT INCLUDING THE LEGISLATION RELATING TO TRANSFER PRICING, NAMELY SECTION 92 & 9 2F OF THE ACT WITH RESPECT TO THE SAID TRANSACTION OF LOAN. WHETHER OR NOT THE APPLICANT WOULD CHARGE THE INTEREST, AS PER THE PRINCIPLES OF THE ARMS LENGTH PRICE, ON THE SAID LOAN ADVANCED TO DATEX, HAVING R EGARD TO ITS ITA NOS. 454, 455, & 456 6 CONTRACTUAL OBLIGATION IS A MATTER FOR THE APPLICAN T TO CONSIDER BUT FOR THE PURPOSE OF THE ACT THE RATE OF INTEREST WILL HA VE TO BE TAKEN AS PER THE PRINCIPLES OF ARMS LENGTH PRICE. NO ARGUMENTS RE ADDRESSED ON THE ADDITIONAL QUESTIO NS. IN THE RESULT WE RULE ON: (I) QUESTION NO.1 THAT THE QUESTION DOES NOT FALL WITHI N THE MEANING OF THE EXPRESSION ADVANCE RULING INCORPOR ATED IN SUB-CLAUSE (I) OF CLAUSE (A) OF SECTION 245N OF THE ACT. (II) QUESTION NO.2, WE DECLINE TO PRONOUNCE ANY RULING A S IT IS NOT PRESSED. (III) QUESTION NO.3 THAT THE APPLICANT IS REQUIRED TO COM PLY WITH THE PROVISIONS OF THE INCOME-TAX ACT CONTAINING THE LEG ISLATION TO TRANSFER PRICING, NAMELY SECTION 92 TO 92F, WITH RE SPECT TO THE SAID TRANSACTION OF LOAN AND ACCORDINGLY INTEREST F OR PURPOSES OF THOSE PROVISIONS WILL BE CHARGEABLE AS PER THE PRIN CIPLES OF ARMS LENGTH PRICE. 8.2. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSES SEE AND AS NO REASONABLE CAUSE FOR NOT FURNISHING THE REPORT U/S 92E WITHIN THE PRESCRIBED TIME WAS FURNISHED BY THE ASSESSEE-APPELLANT, THE A O IMPOSED THE PENALTY. 9. BEFORE THE LD. CIT(A), THE ASSESSEE MADE SUBMISS IONS THAT THE INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271 BA WAS BEYOND THE TIME PERIOD OF COMPLETING ASSESSMENT. THE CONTENTION OF THE ASSESSEE WAS REJECTED BY THE LD. CIT(A) VIDE PARA 4.1 OF HIS OR DER. THE NEXT CONTENTION OF THE ASSESSEE WAS THAT PENALTY HAS BEEN IMPOSED BEY OND SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE PROCEEDINGS WERE INIT IATED. THE SAME WAS ALSO REJECTED BY THE LD. CIT(A) VIDE PARA 5.2 OF HIS ORD ER. THEN THE CONTENTION OF ITA NOS. 454, 455, & 456 7 THE ASSESSEE BEFORE THE LD. CIT(A) WAS THAT THERE W AS A TECHNICAL OR VENIAL DEFAULT SINCE THE AUDIT REPORT HAD ALREADY BEEN OBT AINED AND RELEVANT RECORD HAD BEEN MAINTAINED BY THE ASSESSEE.. THIS CONTENTI ON OF THE ASSESSEE WAS REJECTED BY THE LD. CIT(A) VIDE PARA 6.1 & 6.2 OF H IS ORDER. THE ASSESSEE ALSO SUBMITTED BEFORE THE LD. CIT(A) THAT THE AUDIT REPO RT WAS NOT SUBMITTED WITH THE RETURN OF INCOME AS IT WAS A NEW PROVISION AND THAT THIS CONSTITUTED A REASONABLE CAUSE FOR NOT LEVYING PENALTY U/S 271BA OF THE ACT. THE SAID CONTENTION WAS REJECTED BY THE LD. CIT(A) VIDE PARA 7 OF HIS ORDER. 10. THE LD. COUNSEL FOR THE ASSESSEE, MR. S.S. KALR A, AT THE OUTSET ARGUED AND INVITED OUR ATTENTION AT PAGE 8 OF THE PAPER BO OK WHICH IS THE COPY OF THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NHK JAPAN BROADCASTING CORPN. REPORTED IN (2008) 305 ITR 137 FOR THE A.Y. 1991-92, WHERE THE LD. COUNSEL READ THE HEAD NOTE, WHICH ARE REPRODUCED FOR THE SAKE OF CLARITY AS UNDER: DS-ASSESSEE IN DEFAULT-LIMITATION FOR INITIATING P ROCEEDINGS UNDER S. 201-ACTION MUST BE INITIATED BY THE COMPETENT AUTHO RITY UNDER THE IT ACT, WHERE NO LIMITATION IS PRESCRIBED AS IN S. 201 WITHIN A REASONABLE PERIOD DATE OF KNOWLEDGE IS NOT RELEVANT FOR PURP OSES OF EXERCISING JURISDICTION INSOFAR AS THE PROVISIONS OF IT ACT AR E CONCERNED- ADMISSION OF LIABILITY BY THE ASSESSEE WOULD NOT EX TEND THE LIMITATION AS THE FACT THAT THE ASSESSEE AGREED TO PAY THE TAX VOLUNTARILY CANNOT PUT THE ASSESSEE IN A SITUATION WORSE THAN IF IT HA D CONTESTED ITS LIABILITY LIABILITY OF THE DEDUCTOR IS VICARIOUS LIABILITY AND CANNOT BE ALLOWED TO REMAIN HANGING ON HIS HEAD FOR ALL TIMES TO COME WHERE THE DEPARTMENT DECIDES NOT TO TAKE ACTION EITHER BY PROCEEDING UNDER S. 201 OR BY MAKING ASSESSMENT ON THE DEDUCTEE IN ITIATION OF ITA NOS. 454, 455, & 456 8 PROCEEDINGS UNDER S. 201 AGAINST THE ASSESSEE IN RE SPECT OF THE ASSTT. YEAR 1990-91 WAS BARRED BY LIMITATION HAVING BEEN I NITIATED BEYOND A REASONABLE PERIOD OF TIME OF FOUR YEARS. 10.1. THE LD. COUNSEL FOR THE ASSESSEE FURTHER INVI TED OUR ATTENTION (AT PAGE 13 OF THE PB) TO THE JUDGMENT OF HONBLE HIGH COURT OF HIMACHAL PRADESH IN THE CASE OF CIT VS. SATLUJ JAL VIDYUT NIGAM LTD. REPORTED IN (2012) 250 CTR 113. THE LD. COUNSEL READ THE HEAD NOTE WHICH I S REPRODUCED FOR THE SAKE OF CLARITY AS UNDER : TDS-ASSESSEE IN DEFAULT- LIMITATION FOR INITIATING PROCEEDINGS UNDER S. 201- EVEN IF NO PERIOD OF LIMITATION IS PRESCRIB ED, THE STATUTORY POWER MUST BE EXERCISED WITHIN A REASONABLE PERIOD- THIS REASONABLE PERIOD TAKING INTO CONSIDERATION THE VARIOUS PROVIS IONS OF THE I.T.ACT HAS BEEN HELD TO BE FOUR YEARS IN A NUMBER OF CASES TRIBUNAL WAS THEREFORE, JUSTIFIED IN HOLDING THAT SINCE NOTICES WERE NOT ISSUED WITHIN THE PERIOD OF LIMITATION I.E. FOUR YEARS, HENCE CLA IM AND ACTION OF THE REVENUE IS TIME-BARRED. 10.2. ON READING OF SAID HEAD NOTES OF THE DECISION S OF HONBLE DELHI HIGH COURT AND HONBLE HIMACHAL PRADESH HIGH COURT, THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT NO LIMITATION IS PRESCRIBED FO R LEVY OF PENALTY U/S 271BA AS IN SECTION 201 OF THE ACT. THEREFORE, SUCH LIABILITY CANNOT BE ALLOWED TO REMAIN HANGING ON THE HEAD OF THE ASSESS EE FOR ALL THE TIMES TO COME WHERE THE DEPARTMENT DECIDES NOT TO TAKE ACTIO N. ACCORDINGLY, FOLLOWING THE SAID JUDGMENTS OF HONBLE DELHI HIGH COURT AND HONBLE HIMACHAL PRADESH HIGH COURT, THE AO WAS NOT JUSTIFI ED IN INITIATING THE PENALTY PROCEEDINGS UNDER SECTION 271BA, WHICH IS B ARRED BY LIMITATION ITA NOS. 454, 455, & 456 9 SINCE THE SAME HAS BEEN INITIATED BEYOND THE PERIOD OF LIMITATION OF FOUR YEARS FROM THE END OF THE IMPUGNED FINANCIAL YEAR. SINCE THE ISSUE IN ALL THE THREE YEARS IS IDENTICAL, ESPECIALLY FOR THE ASSESS MENT YEARS 2003-04 & 2004- 05, THE AO COULD NOT HAVE INITIATED PENALTY PROCEED INGS BEYOND A REASONABLE PERIOD OF FOUR YEARS. 10.3. HE FURTHER ARGUED THAT WITH REGARD TO ALL THE THREE YEARS THAT PENALTY PROCEEDINGS WERE NOT INITIATED IN ANY PROCEEDINGS, THEREFORE, ONLY PERIOD AVAILABLE WITH THE AO FOR IMPOSITION OF PENALTY WAS SIX MONTHS FROM THE END OF THE FOUR YEARS IN WHICH ACTION FOR IMPOSITION OF PENALTY WAS INITIATED. 10.4. MR. S.S. KALRA, THE LD. COUNSEL FOR THE ASSES SEE FURTHER ARGUED THAT NOT FILING OF THE AUDIT REPORT ALONGWITH THE RETURN OF INCOME WAS A TECHNICAL DEFAULT AND THE AUDIT REPORT WAS OBTAINED BY THE AS SESSEE BEFORE THE DUE DATE OF FILING THE RETURN BUT THE SAME COULD NOT BE FILE D SINCE THE PROVISIONS OF SECTION 92E WERE NEW PROVISIONS AND THEREFORE THIS CONSTITUTED A REASONABLE CAUSE AND THE AO WAS NOT JUSTIFIED IN LEVYING PENA LTY UNDER SECTION 271BA OF THE ACT. HE ARGUED THAT PENALTY U/S 271BA IS AKI N TO SECTION 271B OF THE ACT. ACCORDINGLY, THE LD. COUNSEL FOR THE ASSESSEE PRAYED TO ALLOW THE ADDITIONAL GROUNDS AND THE GROUNDS RAISED IN ALL T HE THREE APPEALS. 11. THE LD. DCIT (DR), MR. TARSEM LAL ARGUED AT THE OUTSET THAT THE DECISIONS OF THE HONBLE DELHI HIGH COURT IN THE CA SE OF CIT VS. NHK JAPAN ITA NOS. 454, 455, & 456 10 BROADCASTING CORPORATION (SUPRA) AND HONBLE HIGH COURT OF HIMACHAL PRADESH IN THE CASE OF CIT VS. SATLUJ JAL VIDYUT NI GAM LTD (SUPRA) ARE ON SECTION 201 OF THE ACT, WHERE THE DEFAULT IS IN TH E PUBLIC DOMAIN BECAUSE THE ASSESSEE HAD DEDUCTED THE TAX AT SOURCE OR IN S UCH CASES, WHERE THE ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE. THEREFORE, SUCH CASES ARE QUITE DISTINGUISHABLE AS COMPARED TO THE PRESENT FACTS A ND CIRCUMSTANCES, IN ALL THE THREE YEARS OF THE ASSESSEE. IN THE PRESENT CA SE, THE DEPARTMENT WAS NEVER AWARE THAT THE AUDIT REPORT AS REQUIRED UNDER SECTION 92E OF THE ACT HAS BEEN FILED OR WAS REQUIRED TO BE FILED. IT IS O NLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2006 -07, THE AO FOUND THAT THE ASSESSEE HAD NOT FURNISHED THE AUDIT REPORT OF INTERNATIONAL TRANSACTIONS AS REQUIRED UNDER SECTION 92C OF THE ACT. ACCORDING LY, THE AO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271BA OF THE ACT FOR THE ASSESSMENT YEARS 2003-04 TO 2006-07. HE FURTHER ARGUED THAT N O ONE CAN EXPECT WITH DOING OF IMPOSSIBILITY. THE LD. DR, ON THE OTHER HA ND ARGUED THAT FOR THE ASSESSMENT YEAR 2003-04, THE LAST DATE OF FILING OF THE RETURN WAS 31 ST OCT., 2003 AND ASSESSMENT WAS REQUIRED TO BE COMPLETED BY 31 ST MARCH, 2006. THEREFORE, THERE ARE THREE YEARS GAP FROM THE END O F FINANCIAL YEAR TO FINALIZATION OF THE ASSESSMENT BY WHICH AO COMES TO KNOW THAT THE AUDIT REPORT HAS BEEN FILED OR HAS NOT BEEN FILED. THEREF ORE, THE CONDITION OF FOUR ITA NOS. 454, 455, & 456 11 YEARS AS DECIDED BY THE HONBLE HIGH COURT OF HIMAC HAL PRADESH IN THE CASE OF CIT VS. SATLUJ JAL VIDYUT NIGAM LTD & HONBLE D ELHI HIGH COURT IN THE CASE OF CIT VS. NHK JAPAN BROADCASTING CORPORATION (SUPRA) CANNOT BE MADE APPLICABLE. HE ARGUED THAT THE SAID EXAMPLE F OR THE ASSESSMENT YEAR 2003-04 HAS BEEN GIVEN TO DEMONSTRATE THAT WITHIN T HREE YEARS PERIOD, THE AO COMES TO THE CONCLUSION THAT THE AUDIT REPORT HA S NOT BEEN FILED AND IF THE ARGUMENT OF THE LD. COUNSEL ARE ACCEPTED IN ACCORDA NCE WITH THE DECISION OF HONBLE DELHI HIGH COURT & HONBLE HIMACHAL PRADESH HIGH COURT (SUPRA), ONLY ONE YEAR IS LEFT FOR INITIATION OF PENALTY PRO CEEDINGS. 11.1. IN ANY CASE, THE LD. DR, MR. TARSEM LAL ARGUE D THAT FOR THE ASSESSMENT YEAR 2003-04, THE PROCESSING UNDER SECTI ON 143(1) WAS DONE ON 02.08.2004 AND PENALTY PROCEEDINGS UNDER SECTION 27 1BA WERE INITIATED ON 14.05.2008 WHICH IS A PERIOD LESS THAN FOUR YEARS. FOR THE ASSESSMENT YEAR 2004-05, THE ASSESSMENT UNDER SECTION 143(3) WAS CO MPLETED ON 30.11.2006 AND PENALTY PROCEEDINGS WERE INITIATED U/S 271BA ON 14.05.2008, WHICH IS AGAIN THE PERIOD OF LESS THAN FOUR YEARS. ACCORDIN GLY, IN THE PENALTY PROCEEDINGS INITIATED FOR THE A.Y. 2005-06, THE PER IOD OF INITIATION OF PENALTY PROCEEDINGS IS LESS THAN FOUR YEARS. THE CASES RELI ED UPON BY THE LD. COUNSEL FOR THE ASSESSEE OF THE HONBLE HIGH COURT OF HIMAC HAL PRADESH IN THE CASE OF CIT VS. SATLUJ JAL VIDYUT NIGAM LTD & HONBLE D ELHI HIGH COURT IN THE ITA NOS. 454, 455, & 456 12 CASE OF CIT VS. NHK JAPAN BROADCASTING CORPORATION (SUPRA) FOR THE REASONS MENTIONED HEREINABOVE ARE NOT APPLICABLE IN ASSESSEES CASE. 11.2. HE FURTHER ARGUED THAT THE LD. COUNSEL HAS AR GUED ABOUT LIMITATION PERIOD UNDER SECTION 275(1)(C) OF THE ACT. IN THIS REGARD, HE ARGUED THAT SECTION 275(1)(A) IS NOT APPLICABLE IN THE PRESENT CASE, ONLY SECTION 275(1)(C) IS APPLICABLE. THEREFORE, THE LD. CIT(A) HAS RIGHTL Y CONCLUDED THAT PENALTY LEVIED IS WITHIN TIME AND CONFIRMED THE ACTION OF T HE A.O. THE ORDER OF THE LD. CIT(A) IS WELL REASONED ONE. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AS REGARDS THE CONTENTION OF THE ASSESSEE WITH REGA RD TO THAT PENALTY IMPOSED U/S 271BA IS BARRED BY LIMITATION HAVING IMPOSED BE YOND A REASONABLE PERIOD OF FOUR YEARS, WE ARE CONVINCED WITH THE AR GUMENTS OF THE LD. DR MR. TARSEEM LAL. THAT THE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE, MR. S.S. KALRA, CA ARE APPLICABLE WITH RE SPECT TO THE NON- DEDUCTION OF TAX AT SOURCE, WHICH IS A DEFAULT IN P UBLIC DOMAIN. THEREFORE, SUCH DECISIONS CANNOT BE SAID TO BE AKIN TO THE PRE SENT FACTS AND CIRCUMSTANCES OF THE CASE. ALSO, WE ARE CONVINCED W ITH THE ARGUMENTS OF THE LD. DR, MR. TARSEM LAL THAT ALMOST THREE YEARS GEN ERALLY ARE PASSED FROM THE END OF THE FINANCIAL YEAR FOR FILING OF THE RE TURN AND COMPLETING THE ASSESSMENT UNDER SECTION 143(1)/143(3) OF THE ACT. THE AO ONLY COMES TO ITA NOS. 454, 455, & 456 13 KNOW IN GENERAL WITHIN THESE THREE YEARS ABOUT THE DEFAULT OF THE ASSESSEE. IN THE PRESENT CASE, THE OCCASION WITH THE AO WAS A ASSESSMENT FOR THE A.Y. 2006-07 WHEN HE FOUND THAT THE ASSESSEE HAD NOT FU RNISHED AUDIT REPORT REGARDING INTERNATIONAL TRANSACTIONS AS REQUIRED U NDER SECTION 92-C OF THE ACT. THERE WAS NOTHING ON RECORD IN THE IMPUGNED YE ARS THAT THE ASSESSEE HAD INTERNATIONAL TRANSACTIONS AND AUDIT REPORT UND ER SECTION 92E IS AT ALL REQUIRED OR NOT. 12.1. EVEN IF, YEAR-WISE PRACTICAL ASPECT IS CONSID ERED IN EACH YEAR I.E. IN THE ASSESSMENT YEAR 2003-04, THE PROCESSING U/S 143 (1) WAS DONE ON 02.08.2004 AND PENALTY PROCEEDINGS INITIATED UNDER SECTION 271BA ON 14.05.2008 WHICH IS LESS THAN FOUR YEARS. DURING TH E ASSESSMENT YEAR 2004- 05, ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED O N 30.11.2008 AND PENALTY PROCEEDINGS INITIATED U/S 271BA ON 14.05.2 008 WHICH IS AGAIN LESS THAN FOUR YEARS. ACCORDINGLY, INITIATION OF PENALT Y PROCEEDINGS FOR THE ASSESSMENT YEAR 2005-06 ON 14.05.2008, HAS BEEN INI TIATED WITHIN THE PERIOD OF LESS THAN FOUR YEARS. THEREFORE, IN NO CIRCUMSTA NCES, THE DECISION OF HONBLE HIGH COURT OF HIMACHAL PRADESH IN THE CASE OF CIT VS. SATLUJ JAL VIDYUT NIGAM LTD & HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NHK JAPAN BROADCASTING CORPORATION (SUPRA) ARE APPL ICABLE IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS. 454, 455, & 456 14 12.2. ALSO IF SEEN FROM THE ANGLE OF SECTION 275, T HEN SECTION 275(1)(C) IS APPLICABLE WHERE THE AO HAD INITIATED PENALTY PROCE EDINGS IN TIM E. ON MERIT, THE LD. DR HAD SUBMITTED AND ARGUED THAT THERE IS NO REASONABLE CAUSE EXCEPT THAT THE PROVISIONS WERE NEW TO THE ASSESSEE OR TO THE CHARTERED ACCOUNTANT OF THE ASSESSEE AND THEREFORE, THE AUDIT REPORT COULD NOT BE FILED IN TIME. WE ARE OF THE VIEW THAT IGNORANCE OF LAW I S OF NO EXCUSE, ESPECIALLY THE CA WHO HAS AUDITED THE ACCOUNTS OF THE ASSESSEE AND THE ASSESSEE HAS STATED OF HAVING OBTAINED THE AUDIT REPORT BUT DID NOT FILE THE AUDIT REPORT ALONGWITH RETURN OF INCOME COULD NOT BY ANY STRETCH OF IMAGINATION BE A REASONABLE CAUSE FOR FAILURE TO FILE THE AUDIT REPO RT UNDER SECTION 92E OF THE ACT. AS PER SECTION 92E OF THE ACT, EVERY PERSON WHO HAS ENTERED INTO INTERNATIONAL TRANSACTION DURING A PREVIOUS YEAR SH ALL OBTAIN REPORT FROM AN ACCOUNTANT AND FURNISH SUCH REPORT ON OR BEFORE TH E SPECIFIED DATE IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED IN THE PRE SCRIBED MANNER BY SUCH ACCOUNTANT AND SETTING FORTH SUCH PARTICULARS AS MA Y BE PRESCRIBED. THEREFORE, THESE PROVISIONS CONTAINED IN SECTION 92 E AND PROVISIONS OF SECTION 271BA CANNOT BE EQUATED WITH SECTION 271B O F THE ACT. NO REASONABLE CAUSE HAS BEEN ESTABLISHED BY THE ASSESS EE BEFORE ANY OF THE AUTHORITIES BELOW OR EVEN BEFORE US UNDER SECTION 271B OF THE ACT. ITA NOS. 454, 455, & 456 15 THEREFORE, THE ARGUMENTS MADE BY THE LD. COUNSEL FO R THE ASSESSEE WILL NOT HELP THE ASSESSEE. 13. IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT C ASE AND OUR FINDINGS GIVEN HEREINABOVE AND IN VIEW OF THE SUBMISSIONS OF BOTH THE PARTIES AND MATERIAL AVAILABLE ON RECORD AND DECISIONS RELIED U PON BY BOTH THE PARTIES, THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE IN AL L THE THREE APPEALS AND THE GROUNDS OF THE ASSESSEE IN ALL THE THREE YEARS ARE REJECTED. THUS, ALL THE GROUNDS IN ALL THE THREE APPEALS OF THE ASSESSEE AR E DISMISSED. 14. IN THE RESULT, ALL THE THREE APPEALS OF THE ASS ESSEE IN ITA NOS.454, 455 & 456(ASR)/2011 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11TH DECEMBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 TH DECEMBER,2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. AJIT SINGH RANA, JALANDHAR. 2. THE ACIT, RANGE-II, JALANDHAR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER