Joint Commissioner of Income Tax, GONDA V. M/s. Ashok Kumar Pathak Contractor, Bahraich

ITA 602/LKW/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9120 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 14-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K R RASTOGI
• Keywords: Initiation of penalty proceedings

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.602/LKW/2012 ASSESSMENT YEAR:2008 - 09 M/S ASHOK KUMAR PATHAK CONTRACTOR NEAR DIESEL PUMP HOUSE, BAHRAICH. PAN:AAKFA3646C VS JT. C.I.T., RANGE - GONDA. (RESPONDENT) (APPELLANT) C.O.NO. 39 /LKW/201 4 (IN ITA NO.602/LKW/2012 ASSESSMENT YEAR:2008 - 09 JT. C.I.T., RANGE - GONDA. VS M/S ASHOK KUMAR PATHAK CONTRACTOR NEAR DIESEL PUMP HOUSE, BAHRAICH. PAN:AAKFA3646C (RESPONDENT) (APPELLANT) SHRI R. K. RAM, D. R. REVENUE BY SHRI K. R. RASTOGI, C. A. ASSESSEE BY 03/12/2014 DATE OF HEARING 23 /01/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THE APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT(A) - II, LUCKNOW DATED 08/10/2012 FOR ASSESSMENT YEAR 2008 - 09. 2. IN ITS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CIT(A) - II, LUCKNOW IS BAD IN LAW AND ERRONEOUS ON THE FACTS OF THE CASE. 2 2. THE LEARNED CIT(A) - II, LUCKNOW HAS WRONGLY ADJUDICATED THAT THE TRANSACTION IS BEYOND THE AMBIT OF SECTION 269T OF THE ACT. 3. IN ITS CROSS OBJECTION, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT PRESENT PENALTY ORDER IS BARRED BY LIMITATION AS IT IS PASSED BEYOND THE PERIOD OF SIX MONTHS FROM THE ORDER OF ASSESSMENT AS PRESCRIBED U/S 275(1)(C) OF I.T. ACT. 4 . FIRST WE TAKE UP THE CROSS OBJECTION OF THE AS SESSEE. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT IN THE PRESENT CASE, THE PENALTY ORDER IS TIME BARRED AS PER THE PROVISIONS OF SECTION 275 (1) (C) OF THE ACT. 5 . AS AGAINST THIS, IT WAS SUBMITTED BY LEARNED D.R. OF THE REVENUE THAT THE PER IOD OF SIX MONTHS SHOULD BE COUNTED FROM THE DATE ON WHICH ACTION FOR THE IMPOSITION OF THE PENALTY HAS BEEN INITIATED AND NOT FROM THE DATE OF THE ASSESSMENT ORDER. AT THIS JUNCTURE, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT AS PER THE COPY O F THE ORDER SHEET BROUGHT ON RECORD BY THE REVENUE, THE MATTER WAS REFERRED BY THE ASSESSING OFFICER TO ADDL. CIT FOR IMPOSITION OF PENALTY ON 21.10.2010 AND THEREFORE, AT LEAST THIS DATE SHOULD BE CONSIDERED AS A DATE OF INITIATION OF PENALTY PROCEEDINGS IF NOT THE DATE OF ASSESSMENT ORDER. HE SUBMITTED THAT EVEN AS PER THIS DATE, THE MONTH HAS EXPIRED ON 31.10.2010 AND PERIOD OF SIX MONTHS HAS EXPIRED ON 30.06.2011 AND THEREFORE, IMPUGNED PENALTY ORDER IS TIME BARRED. 6 . WE HAVE CONSIDERED THE RIVAL SUB MISSIONS. WE FIND THAT THE RELEVANT PROVISIONS ARE CONTAINED IN CLAUSE (C) OF SUB SECTION (1) OF SECTION 275, WHICH ARE REPRODUCED BELOW: (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, OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH ACTION FOR 3 IMPOSITION OF PENALTY IS INITIATED, WHICHEVER PERIOD EXPIRES LATER. 6 .1 FROM THE ABOVE PROVISIONS, IT IS SEEN THAT PENALTY ORDER IS TIME BARRED IN THE PRESENT CASE ON THE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ACTION FOR PENALTY IS INITIATED. IN THE FACTS OF THE PRESENT CASE, THE DATE OF REFERENCE BY THE ASSESSING OFFICER TO ADDL. C.I.T. FOR IMPOSITION OF PENALTY IS 21/10/201 0 AND IF THE PERIOD OF SIX MONTH S IS COUNTED FROM 31.10.2010 , THE SAME EXPIR ES ON 30/06/201 1 AND THE PENALTY ORDER HAS BEEN PASSED ON 28 TH JULY, 2011 AND HENCE, THE PENALTY ORDER IS TIME BARRED AS PER THE PROVISIONS OF SECTION 275 OF THE ACT. WE HOLD ACCORDINGLY AND PENALTY ORDER IS QUASHED BEING TIME BARRED. 7 . IN THE RESULT, TH E CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. 8 . NOW WE TAKE UP THE APPEAL OF THE REVENUE I.E. I.T.A. NO.602/LKW/2012. 9 . LEARNED D. R. OF THE REVENUE SUPPORTED THE PENALTY ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE PENALTY WAS IMPOSED IN RESPECT OF TRANSACTIONS OF THE ASSESSEE FIRM WITH ITS PARTNER SHRI DHANANJAY SINGH IN RESPECT OF REPAYMENT TO SHRI DHANANJAY SINGH. THIS ISSUE WAS DECIDED BY CIT(A) BY FOLLOWING THE JUDGMENT OF HON'BLE RAJASTHAN HIGH COURT RENDERED IN THE CASE OF CIT VS. LOKHPAT FILM EXCHANGE (CINEMA) [2008] 304 ITR 172 (RAJ) IN WHICH IT WAS HELD THAT IF A PARTNER INTRODUCES CAPITAL IN CASH IN THE FIRM OR WITHDRAWS THE SAME TO THE TUNE OF RS.20,000/ - OR IN EXCESS, THEN PROVISIONS OF SECTION 269SS OR 269T OF THE ACT SHALL NOT BE ATTRACTED BECAUSE THE INTRODUCTION OF CAPITAL OR WITHDRAWAL FROM THE FIRM CANNOT BE CALLED AS LOANS OR DEPOSITS. THE COPY OF ACCOUNT OF SHRI DHANANJAY SINGH IS AVAILABLE ON PAGE NO. 13 OF THE PAPER BOOK AS PER WHICH IT IS A CURRENT ACCOUNT OF THE PARTNER SHRI DHANANJAY SINGH IN THE BOOKS OF THE ASSESSEE FIRM. THE COPY OF BANK ACCOUNT OF SHRI DHANANJAY 4 SINGH AND SHRI ASHOK KUMAR PATHAK IS AVAILABLE ON PAGES 14 TO 17 OF THE PAPER BOOK. AS PER PAGE NO. 14 OF THE PAPER BOOK, THE AMOUNT WAS BROUGHT IN BY SHRI DHANANJAY SINGH BY WAY OF CHEQUE ON 09/04/2007. THE AMOUNT WAS REFUNDED ON 30/04/2007 AND ON 1 ST MAY 2007 BY WAY OF TWO CHEQUES EACH OF RS.3,00,000/ - IN THE NAME OF SHRI ASHOK KUMAR PATHAK CONTRACTOR AND THE SAME WAS CREDITED IN HIS BANK ACCOUNT. ALTHOUGH THE AMOUNT WAS NOT REPAID BY WAY OF CHEQUE IN FAVOUR OF THE PAYEE SHRI DHANANJAY SINGH BUT IN ANY CASE, THE AMOUNT WAS PAID BY WAY OF ACCOUNT PAYEE CHEQUE ONLY BUT THIS FACT IS NOT RELEVANT IN THE PRESENT CASE BECAUSE IN THE PRESENT CASE, THE AMOUNT IN DISPUTE IS NOT REPAYMENT OF LOAN BUT REPAYMENT OF PARTNERS CAPITAL ACCOUNT AND THEREFORE, PENALTY U/S 271E IS NOT APPLICABLE AS PER THE JUDGMENT OF HON'BLE RAJASTHAN HIGH COURT. HENCE, ON THIS ISSUE, WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A). 1 1 . IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 1 2 . IN THE COMBINED RESULT, THE APPEAL OF THE REVENUE IS DISMISSED AND CROSS OB JECTION OF THE ASSESSEE IS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23 /01/201 5 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR