JOTUN INDIA P.LTD, MUMBAI V. ADDL DIT (IT) 1(3),

ITA 5184/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2699 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2007-2008
• Appeal Filed On: 12-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K K VEEL
• Keywords: Period of limitation; Time period of passing order
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUM BAI BEFORE SRI G. S. PANNU, ACCOUNTANT MEMBER AND SRI SANJAY GARG, JUDICIAL MEMBER ITA NO.5184/MUM/2014 (A.Y.:2007-08) JOTUN INDIA PVT. LTD., 502, 5 TH FLOOR, BOSTON HOUSE, SUREN ROAD, BEHIND CINEMAX THEATRE, ANDHERI (EAST), MUMBAI 400093 VS. THE ADDL. DIRECTOR INCOME- TAX (IT)-3, ROOM NO.106, SCINDIA HOUSE, N. MORARJI ROAD, BALLARD PIER, MUMBAI 400001 PAN:AABCJ 6665J APPELLANT .. RESPONDENT APPELLANT BY: SHRI K. K. VEEL, AR RESPONDENT BY: SHRI JEEVAN LAL, DR DATE OF HEARING: 28-06-2016 DATE OF PRONOUNCEMENT: 15-07-2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL IS PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-10, MU MBAI [HEREINAFTER REFERRED TO AS THE CIT (A)] DATED 19-02-2014 FOR A SSESSMENT YEAR 2007-08 AGITATING LEVY OF PENALTY U/S 271C OF THE INCOME TA X ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT]. 2. AT THE OUTSET, THE LEARNED AR OF THE ASSESSEE HA S STATED THAT THE PENALTY ORDER PASSED BY THE AO U/S 271C OF THE ACT WAS BARR ED BY LIMITATION AND HENCE, THE SAME IS BAD IN LAW. THE LEARNED AR OF TH E ASSESSEE HAS FURTHER INVITED OUR ATTENTION TO THE FACT THAT THE PENALTY ORDER IN THIS CASE HAS NOT BEEN INITIATED IN THE COURSE OF ANY PROCEEDINGS BUT, THE SAME WAS INITIATED DUE TO NON-DEDUCTION OF TDS AND BECAUSE OF THE SUBSEQUENT PROCEEDINGS U/S 201 (1) AND 201(1A) OF THE ACT. HE HAS FURTHER INVITED OUR ATTENTION TO THE PENALTY ORDER PASSED U/S 271C OF THE ACT WHEREIN IT HAS BEE N SPECIFICALLY ITA NO.5184/MUM/2014 2 MENTIONED THAT THE PENALTY PROCEEDINGS IN THIS CASE WERE INITIATED ON 29-09- 2010 AND CONCLUDED VIDE ORDER DATED 28-03-2012. AS PER THE PROVISIONS OF SECTION 275(1) (C) OF THE ACT, NO ORDER IMPOSING PE NALTY UNDER THE CHAPTER SHALL BE PASSED AFTER EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS IN THE COURSE OF WHICH ACTION OF IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED, OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED, WHICHEVER PERIO D EXPIRES LATER. THE LEARNED AR OF THE ASSESSEE FURTHER STATED THAT IN THE CASE IN HAND THE PENALTY PROCEEDINGS WERE NOT INITIATED IN THE COURSE OF ANY PROCEEDINGS. HENCE, THE LATER PERIOD PRESCRIBED UNDER THE SECTION PROVIDING THE LIMITATION PERIOD OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE PENAL TY PROCEEDINGS WERE INITIATED WILL BE APPLICABLE. ADMITTEDLY, THE PENAL TY PROCEEDINGS AS NOTED HEREINABOVE WERE INITIATED IN THE MONTH OF SEPTEMBE R, 2010, WHEREAS THE PENALTY ORDER IN QUESTION HAS BEEN PASSED ON 28 TH MARCH, 2012 I.E. AFTER TWO YEARS. THE PENALTY ORDER THUS IS BARRED BY LIMITATI ON AS PRESCRIBED U/S 275 (1) (C) OF THE ACT. THE LEARNED AR OF THE ASSESSEE HAS ALSO INVITED OUR ATTENTION TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT (TDS) VS. IKEA TRADING HONG KONG LTD. [333 ITR 565 (DELHI) WH EREIN UNDER SIMILAR CIRCUMSTANCES, THE HONBLE DELHI HIGH COURT HAS OBS ERVED THAT SUB-CLAUSES (A) AND (B) OF SECTION 275 (1) OF THE ACT RELATE TO THE CASES WHERE ASSESSMENTS, TO WHICH THE PROCEEDINGS FOR IMPOSITION OF PENALTY RELATE, WAS THE SUBJECT MATTER OF AN APPEAL BEFORE THE HIGHER AUTHORITIES O R WAS THE SUBJECT MATTER OF A REVISION U/S 263 OF THE ACT RESPECTIVELY. HOWEVER, SUB-CLAUSE (C) OF SECTION 275 (1) OF THE ACT REFERS TO OTHER CASES NOT FALLIN G WITHIN THE SUB-CLAUSES (A) AND (B) OF SECTION 275 (1) OF THE ACT AND IN THAT S ENSE SECTION 275(1) (C) OF THE ACT IS A RESIDUARY PROVISION. FURTHER, THAT THE RE ARE TWO PERIOD OF LIMITATION PRESCRIBED UNDER SUB-CLAUSE (C) OF SECTION 275 (1); THE FIRST PERIOD RELATES TO ITA NO.5184/MUM/2014 3 THOSE CASES WHERE ACTION FOR IMPOSITION OF PENALTY HAS BEEN INITIATED IN THE COURSE OF SOME PROCEEDINGS, THE SECOND PERIOD PRESC RIBED UNDER SUB-CLAUSE (C) OF SECTION 275(1) OF THE ACT PERTAINS TO OTHER CASE S FALLING UNDER CLAUSE (C). THE HONBLE HIGH COURT UNDER SIMILAR CIRCUMSTANCES HELD THAT WHERE INITIATION OF ACTION FOR IMPOSITION OF PENALTY IS N OT IN THE COURSE OF ANY PROCEEDINGS, THE FIRST PERIOD PRESCRIBED U/S 275 (1 ) (C) OF THE ACT WOULD HAVE NO APPLICATION AND ONLY THE PERIOD OF LIMITATION PR ESCRIBED IN THE SECOND PART WOULD APPLY WHICH IS SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE PENALTY PROCEEDING WAS INITIATED BY ISSUANCE OF SHO W-CAUSE NOTICE. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE ABOVE DE CISION OF THE HONBLE DELHI HIGH COURT. THE PENALTY ORDER BEING BARRED BY LIMIT ATION HAS NO LEGAL SANCTITY AND THE SAME IS ACCORDINGLY SET ASIDE. 3. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 15 JULY, 2016 SD/- SD/- (G. S. PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 15 JULY, 2016 LAKSHMIKANTA DEKA/SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//