Shree Jalaram Finance, Anand V. The Addl.CIT, Range-3, Baroda

ITA 570/AHD/2014

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5731 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2000-2001
• Appeal Filed On: 24-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHAMMED USMAN
• Keywords: Period of limitation; Initiation of penalty proceedings; Time period of passing order
• Section: 271E; 22

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL , D BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT AT AHMEDABAD) BEFORE SHRI RAJPAL YADAV , VICE PRESIDENT AND SHRI WASEEM AHMED , ACCOUNTANT MEMBER ./ ITA NO. 570/AHD/2014 / ASSTT. YEAR: 2000 - 2001 SHREE JALARAM FINANCE , C/O. SHRI ALPESHBHAI ARVINDBHAI P A TEL , KESHAVSASNI KHADKI , POST AT SISVA, TA. BORSAD, DIST. ANAND - 388540. PAN : AAJFS2303P VS. A .C.I.T. , RANGE - 3 , VADODARA . (APPLICANT) ( RESPON D ENT ) ASSESSEE BY : SHRI MUKUND BAKSHI , A.R REVENUE BY : SHRI MOHAMMED USMAN, CIT .D. R / DATE OF HEARING : 10 / 12 / 2020 / DATE OF PRONOUNCEMENT: 03 / 02 /2021 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE A GAINST THE ORDER OF THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) - I , VADODARA , DATED 21/02/2012 ( IN SHORT LD. CIT (A) ) ARI SING IN THE MATTER OF PENALTY ORDER DATED ITA NO.570/AHD/2014 ASSTT. YEAR 2000 - 01 2 18/05/2004 PASSED UNDER S. 271E OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') RELEVANT TO THE ASSESSMENT YEAR 2000 - 20 01 . 2. T HE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD.CIT(APPEALS), BARODA HAS ERRED IN LAW IN NOT ADMITTING THE ADDITIONAL GROUND TAKEN WITH RESPECT TO THE IMPUGNED ORDER BEING BARRED BY LIMITATION. 2. THE LD.CIT(APPEALS) HAS FURTHER ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE ADDITIONAL GROUND RAISED BEFORE HIM WAS A LEGAL GROUND AND THE FACTS RELATING THERETO EMANATED AND ARE VERY MUCH AVAILABLE ON RECORDS. 3. THE LD.CIT(APPEALS) HAS FURTHER ERRED IN LAW AND IN FACTS IN HOLDING THAT THERE WAS NO JUSTIFICATION ON PART OF THE APPELLANT IN OMISSION OF THE LEGAL GROUND OF LIMITATION IN THE APPEAL FILED. 4. THE LD.CIT(APPEAL) HAS ERRED IN LAW AND IN FACTS IN UPHOLDING THE FINDINGS OF THE LD.JCIT IN HOLDING THAT M/S.YOGI FINANCE IS A BENAMI OF THE APPELLANT. 5. THE LD.CIT (APPEALS) HAS ERRED IN LAW AND IN FACTS IN HOLDING THAT THE REPAYMENTS MADE BY THE APPELLANT TO THE LENDERS BY CHEQUES DISCOUNTED BY THEM FROM SISTER CON CERN M/S.YOGI FINANCE WAS IN VIOLATION OF THE PROVISIONS OF SECTION 269T. 6. THE LD.CIT(APPEAL) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE PENALTY UNDER SECTION 271E TO THE EXTENT OF RS.107,81,776/ - 7. THE LD.CIT(APPEAL) HAS FURTHER ERRED IN LAW AND IN FA CTS IN ENHANCING THE PENALTY UNDER SECTION 271E BY AN AMOUNT OF RS.13,13,960/ - 8. YOUR APPELLANT CRAVES LIBERTY TO ADD, DELETE, WITHDRAW, SUBSTITUTE, REVISE OR MODIFY ANY OF THE GROUNDS OF APPEAL TAKEN HEREINABOVE. 3. T HE ASSESSEE IN THE 1 ST GROUND OF APPEA L HAS CHALLENGED THE VALIDITY OF THE ORDER PASSED BY THE AO UNDER SECTION 271E OF THE ACT ON THE REASONING THAT IT IS BARRED BY LIMITATION. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHIP FIRM AND ENGAGED IN THE BUSINESS OF FINANCING SERVICE S . THE AO IN THE PRESENT CASE INITIATED THE PENALTY UNDER SECTION 271E OF THE ACT BY ISSUING A NOTICE DATED 22 MAY 2003 ON THE ASSESSEE WHICH CAME TO BE CONFIRMED BY AN ORDER DATED 18 - 05 - 2014. 4.1 THE LEARNED AR BEFORE US SUBMITTED THAT THE ORDER PASSED BY THE AO IMPOSING THE PENALTY UNDER SECTION 271E OF THE ACT WAS BARRED BY LIMITATION AS ITA NO.570/AHD/2014 ASSTT. YEAR 2000 - 01 3 PROVIDED UNDER SECTION 275 OF THE ACT. THE LEARNED AR, TO JUSTIFY HIS STAND, CON TENDING THAT THE ORDER IS BARRED BY LIMITATION , HAS FURNI SHED THE RELEVANT DATES WHICH ARE GIVEN AS UNDER: COMPUTATION OF LIMITATION PERIOD A ASSESSMENT ORDER DATED END OF FINANCIAL YEAR :28.03.2003 :31.03.2003 B END OF THE MONTH IN WHICH INITIATED A) SIX MONTHS FROM 30.05.2003 B) FURTHER PERIOD AS PER SEC.129 - 162 DAYS FROM 29.11.2003 C) DATE OF PENALTY ORDER :30.05.2003 :29.11.2003 11.05.2004 18.05.2004 D) THE DATE OF INITIATION BY A.O WOULD CERTAINLY BE BEFORE THE DATE OF ISSUE OF NOTICE FOR INITIATION OF PENALTY PROCEEDINGS I.E 22.05.2003. IF THE EARLIER DATE IS TAKEN THE LIMITATION PERIOD WOULD EXPIRE EVEN EARLIER. 5. IN VIEW OF THE ABOVE THE LEARNED AR BEFORE US PRAYED TO QUASH THE PENALTY ORDER PASSED BY THE AO UNDER SECTION 271E OF THE ACT VIDE ORDER DATED 18 - 05 - 2014. 6. ON THE OTHER H AND THE LEA RNED DR BEF ORE US REQUESTED FOR SOME TIME ON THE REASONING TO GET COMMENTS FROM THE AO ON THE SUBMISSION MADE BY THE LD. AR FO R THE ASSESSEE , PRECISELY FOR 15 DAYS . 6.1 THE LD. AR OBJECTED FOR GRANT OF TIME TO THE REVENUE ON THE GROUND THAT THE REVENUE HAS TIME AND AGAIN HAS SOUGHT TIME ON THE PRETEXT OF GETTING THE REPORT FROM THE AO BUT FAILED TO OBTAIN SUCH REPORT FROM THE A O. THE MATTER BEING VERY OLD, THE REQUEST OF REVENUE FOR ADJOURNING THE MATTER SHOULD NOT BE ENTERTAINED. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE PROVISIONS AS SPECIFIED UNDER CLAUSE TO SECTION 275 OF THE ACT HAS A DIRECT BEARING ON THE ISSUE ON HAND WHICH IS REPRODUCED AS UNDER: 275. (1) NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHALL BE PASSED ( A ) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX ( B ) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX ( C ) IN ANY OTHER CASE, AFTER THE EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED, ITA NO.570/AHD/2014 ASSTT. YEAR 2000 - 01 4 OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED, WHICHEVER PERIOD EXPIRES LATER. 7.1 IT IS ALSO PERTINENT TO NOTE THAT THE EXPLANATION ATTACHED TO SECTION 275 OF THE ACT PROVIDES TO EXCLUDE CERTAIN PERIOD FOR CA LCULATING THE LIMITATION OF TIME WHICH IS REPRODUCED AS UNDER: EXPLANATION. IN COMPUTING THE PERIOD OF LIMITATION FOR THE PURPOSES OF THIS SECTION, ( I ) THE TIME TAKEN IN GIVING AN OPPORTUNITY TO THE ASSESSEE TO BE REHEARD UNDER THE PROVISO TO SECTION 129 ; ( II ) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXX ( III )XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX , SHALL BE EXCLUDED. 7.2 IN THE CASE ON HAND THERE WAS CHANGE IN THE JURISDICTION OF THE I NCOME T AX O FFICE UNDER THE PROVISIONS OF SECTION 129 OF THE ACT FROM CENTRAL RANGE TO RANGE 3 BARODA. THE ASSESSEE, ON CHANGE OF JURISDICTION, REQUESTED FOR REHEARING THE CAS E AS PROVIDED IN THE PROVISO TO SECTION 129 OF THE ACT VIDE LETTER DATED 27 - 11 - 2003 WHICH CAME TO BE CONCLUDED ON 06 - 05 - 2004. EFFECTIVELY, THE TIME OF 162 DAYS WAS CONSUMED IN THE REHEARING OF THE CASE OF THE ASSESSEE. ACCORDINGLY, SUCH TIME HAS TO BE EXCL UDED AS PER THE EXPLANATION ATTACHED TO SECTION 275 OF THE ACT WHICH HAS BEEN DISCUSSED HERE IN ABOVE. 7.3 IN THE LIGHT OF THE ABOVE STATED DISCUSSION THE TIME LIMIT FOR PASSING THE ORDER WAS EXPIRING ON 30 SEPTEMBER 2003 UNDER THE PROVISIONS OF CLAUSE (C) TO SECTION 275 OF THE ACT BUT THE SAME NEEDS TO BE EXTENDED FOR ANOTHER 162 DAYS AS PER THE EXPLANATION PROVIDED IN SECTION 275 OF THE ACT. THUS, AFTER CONSIDERING SUCH TIME, THE TIME LIMIT EXPIRED FOR PASSING THE ORDER A S ON 11 - 05 - 2004 BUT THE AO HAS PASSED THE PENALTY ORDER DATED 18 - 05 - 2004 WHICH IS DELAYED BY 7 DAYS. ACCORDINGLY WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE AO UNDER SECTION 271E IMPOSING THE PENALTY ITA NO.570/AHD/2014 ASSTT. YEAR 2000 - 01 5 UPON THE ASSESSEE IS NOT SUSTAINABLE AS IT IS B ARRED BY TIME. CONSEQUENTLY, WE QUASH THE SAME. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 7.4 BEFORE PARTING, IT IS ALSO IMPORTANT TO NOTE THAT A TIME OF 25 DAYS WAS GRANTED TO THE REVENUE ON THE REQUEST OF THE LD. DR TO REBUT ON THE CONTENTION O F THE LD. AR FILED BY HIM WHICH HAVE BEEN REPRODUCED ABOVE. FOR GRANTING THE TIME AN INTERIM ORDER DATED 10 - 12 - 2020 WAS PASSED BY THE BENCH BY OBSERVING AS UNDER: 10.12.2020 PRESENT : ASSESSEE BY : SHRI MUKUND BAKSHI, AR REVENUE BY : SHRI MOHAMME D USMAN, CIT - DR THIS APPEAL IS DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST ORDER OF THE LD.CIT(A) DATED 21.2.2012 PASSED FOR ASSTT.YEAR 2000 - 01. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE PENALTY IMPOSED UNDER SE CTION 271E OF THE INCOME TAX ACT, 1961. 2. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT PENALTY ORDER IS TIME BARRED BY 7 DAYS. HE SUBMITTED THE FOLLOWING CALCULATIONS: COMPUTATION OF LIMITATION PERIOD: (A) ASSESSMENT ORDER DATED : 28.03.2003 END OF FINANCIAL YEAR : 31.03.2003 (B) END OF THE MONTH IN WHICH INITIATED : 30.05.2003 A) SIX MONTHS FROM 30.05.2003 : 29.11.2003 B) FURT HER PERIOD AS PER SEC. 129 - 162 DAYS FROM 29.11.2003 : 11.05.2004 C) DATE OF PENALTY ORDER : 18.05.2004 D) THE DATE OF INITIATION BY A.O. WOULD CERTAINLY BE BEFORE THE DATE OF ISSUE OF NOTICE FOR INITIATION OF PENALTY PROCEEDINGS I.E. 22. 05.2003. IF THE EARLIER DATE IS TAKEN THE LIMITATION PERIOD WOULD EXPIRE EVEN EARLIER. 3. THE LD.DR WAS UNABLE TO CONTROVERT THE ABOVE CALCULATION IN THE ABSENCE OF EXACT DETAILS AVAILABLE WITH HIM. HE SUBMITTED THAT HE HAS TRIED HIS BEST TO LAY HIS HAN D ON THE DETAILS FROM THE RECORD SO THAT THE SUBMISSIONS OF THE ASSESSEE COULD BE CROSS - VERIFIED; BUT BECAUSE OF COVID 19 PANDEMIC AND OTHER ISSUES, SUCH DETAILS COULD NOT BE COLLECTED, AND SOUGHT TIME. ITA NO.570/AHD/2014 ASSTT. YEAR 2000 - 01 6 4. WE HAVE CONSIDERED THE REQUEST OF THE LD.DR AND D EEM IT APPROPRIATE TO OBSERVE THAT EARLIER THE DELAY WAS NOT CONDONED, AND THE APPEAL OF THE ASSESSEE WAS DISMISSED. THE ASSESSEE WENT IN FURTHER APPEAL BEFORE THE HON BLE GUJARAT HIGH COURT IN TAX APPEAL NO.920 OF 2018. HON BLE HIGH COURT HAS CONDONED T HE DELAY OF 657 DAYS AND REMANDED THE APPEAL BACK TO THE FILE OF THE TRIBUNAL. ORIGINAL PENALTY WAS IMPOSED VIDE ORDER DATED 18.5.2004; ALREADY 16 YEARS HAVE EXPIRED, AND THE DEPARTMENT HAS ALSO SOUGHT ADJOURNMENT ON NUMBER OF OCCASION FOR THIS VERIFICATI ON IN THE PAST. THEREFORE, FOR THE TIME BEING, WE HEARD THE PARTIES, AND TREAT THIS APPEAL AS HEARD. THE LD.DR HAS GIVEN OPPORTUNITY TO OBTAIN A REPORT FROM THE AO ON THE FACTUAL CALCULATION SUBMITTED BY THE ASSESSEE WITHIN A PERIOD OF 25 DAYS FROM TODAY . IN CASE NO REBUTTAL IS BEING FILED, WE WILL PROCEED TO DECIDE THE APPEAL ON THE BASIS OF RELEVANT RECORD AVAILABLE BEFORE US. COPY OF THIS ORDER BE SUPPLIED TO BOTH THE PARTIES. 7.5 HOWEVER, THERE WAS NO RESPONSE FILED BY THE REVENUE TILL THE DATE OF PASSING THE ORDER . IN SUCH A SITUATION, WE HAD NO ALTERNATE EXCEPT FOR PASSING THE ORDER ON THE FACTS AVAILABLE ON RECORD. 7.6 AS WE HAVE DECIDED THE ISSUE ON HAND ON TECHNICAL GROUND BY HOLDING THE PENALTY ORDER AS UNSUSTAINABLE BEING BARRED BY TIME. W E DO NOT FIND ANY REASON TO ADJUDICATE THE ISSUE RAISED BY THE ASSESSEE ON MERIT. AS SUCH THE ISSUE RAISED BY THE ASSESSEE ON MERIT BECOMES INFRUCTUOUS AND THEREFORE NO SEPARATE ADJUDICATION IS REQUIRED. THUS WE DISMISS THE SAME. 8. IN THE RESULT, THE AP PEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. O RDER PRONOUNCED IN THE COURT ON 03 /02 / 2021 AT AHMEDABAD. SD/ - SD/ - (RAJPAL YADAV ) (WASEEM AHMED) VICE PRESIDENT ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 03 / 02 /2021 MANISH