Mohd. Asgar Imam, New Delhi V. ITO, New Delhi

ITA 6375/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91318 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 13-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 02-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R SANBHAD RA
• Assessee Lawyers: PIYUSH JAIN CAS
• Keywords: Period of limitation; Time period of passing order
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI INTURI RAMA RAO ITA NO. 6375/DEL/2013 ASSESSMENT YEAR: 2007-08 MOHD. ASGAR IMAM, VS. INCOME-TAX OFFICER, C-183/10, CHINOT BASTI, WARD 39(4), MULTANI DHANDA, PAHAR GANJ, NEW DELHI. NEW DELHI (PAN: AAPPM0054M) (APPELLANT) (RESPONDENT) APPELLANT BY: MS. SANGEETA SINGH & SHRI PIYUSH JAIN, CAS RESPONDENT BY: SHRI V.R. SANBHAD RA, SR. DR DATE OF HEARING : 13.07.2015 DATE OF PRONOUNCEMENT: 17 :07.2015 ORDER PER I.C. SUDHIR: JUDICIAL MEMBER THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS: 1. THAT WITHIN THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW ON THE POINT, THE PENALTY ORDER DATED 29 TH MARCH, 2012 FOR THE ASSESSMENT YEAR 2007-08 PASSED BY THE LEARNED A.O., WARD 39(4) IMPOSING A PENALTY OF RS.58,842 IS WRONG, PERVERSE, ILLEGAL AN D AGAINST THE PROVISIONS OF LAW. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW ON THE POINT, THE LEARNED ASSESSING OFFICER HAS ERRED IN P ASSING PENALTY ORDER U/S. 271(1)(C) OF THE INCOME-TAX ACT, 1961 AFTER EX PIRY OF LIMITATION 2 PERIOD AS LAID DOWN IN SEC. 275 OF THE INCOME-TAX A CT, 1961 AND HONBLE CIT(A) HAS ERRED IN CONFIRMING SUCH PENALTY ON THE WRONG PURPOSE. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW AS ON THE POINT, HONBLE CIT(A) HAS ERRED IN UNDERSTANDIN G THE PROVISIONS OF SEC. 275 AS APPLICATION OF PROVISO TO SEC. 275(1 )(A) OF THE INCOME- TAX ACT, 1961 IN THE CASE WHERE ASSESSMENT ORDER IS THE SUBJECT MATTER OF APPEAL BEFORE ITAT IS AGAINST THE PROVISIONS OF LAW AS PROVISO TO SEC. 275(1)(A) IS APPLICABLE ONLY IN CASES WHERE AS SESSMENT ORDER IS THE SUBJECT MATTER OF APPEAL BEFORE CIT(A). 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY T HE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILA BLE ON RECORD AND THE DECISIONS RELIED UPON. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE, AN IND IVIDUAL, DERIVED INCOME FROM HIS PROPRIETORSHIP BUSINESS OF MANUFACTURING A ND TRADING OF COVERS USED IN SUITS DURING THE ASSESSMENT YEAR UNDER CONS IDERATION. AGAINST THE DECLARED INCOME OF RS.1,52,502, THE ASSESSMENT UNDE R SEC. 143(3) OF THE INCOME-TAX ACT, 1961 WAS FRAMED ON THE ADDITION OF RS.15,79,790 VIDE ORDER DATED 29.12.2009. THE ASSESSEE QUESTIONED THE ADDIT ION BEFORE THE FIRST APPELLATE AUTHORITY BUT COULD NOT SUCCEED. THE FIRS T APPEAL WAS DISMISSED 3 VIDE ORDER DATED 28.7.2010. THE ASSESSEE WENT IN SE COND APPEAL BEFORE THE ITAT AND THE ITAT VIDE ITS ORDER DATED 11.3.2011 PA RTLY ALLOWED THE APPEAL. OUT OF THE TOTAL ADDITIONS OF RS.15,79,790, ADDITIO N OF RS.13,55,000 WAS DELETED BY THE ITAT. THE ITAT SUSTAINED THE ADDITIO N OF RS.2,74,790 MADE ON ACCOUNT OF LOW DRAWINGS. 4. TAKING INTO CONSIDERATION THE ORDER OF THE ITAT, THE ASSESSING OFFICER HAS LEVIED PENALTY UNDER SEC. 271(1)(C) OF THE INCOME-TAX ACT, 1961 ON THE ADDITION OF RS.2,24,790 SUSTAINED BY THE ITA T. HE, VIDE ORDER DATED 29.3.2012, LEVIED PENALTY OF RS.58,842 BEING 100% O F TAX SOUGHT TO BE EVADED. 5. BEFORE THE LEARNED CIT(APPEALS), THE ASSESSEE CO NTENDED THAT THE PENALTY ORDER DATED 29.3.2012 IS BARRED BY LIMITATI ON. THE LEARNED CIT(APPEALS) DID NOT AGREE AND DISMISSED THE APPEAL . 5. BEFORE THE ITAT, THE LEARNED AR SUBMITTED THAT A S PER THE PRESCRIBED LIMITATION UNDER SEC. 275(1)(A) OF THE ACT, THE PEN ALTY ORDER SHOULD HAVE BEEN PASSED ON 31.12.2011 WHICH HAS BEEN PASSED ON 29.3.2012, HENCE, IT IS TIME BARRED. HE POINTED OUT THAT ORDER DATED 11.3.2 011 OF THE ITAT IN ITA NO. 4155/DEL/2010 HAS BEEN RECEIVED BY THE LEARNED CIT ON 10.6.2011. 4 THUS, DATE OF EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH ORDER OF THE ITAT WAS RECEIVED BY THE LEARNED CIT WOULD B E 31.12.2011 AND THE ASSESSING OFFICER WAS SUPPOSED TO PASS PENALTY ORDE R ON OR BEFORE 31.12.2011. 6. THE LEARNED AR SUBMITTED FURTHER THAT THE LEARNE D CIT(APPEALS) WHILE CALCULATING LIMITATION PERIOD AS PER SEC. 275 , HAS APPLIED PROVISO TO SEC. 275(1)(A) OF THE INCOME-TAX ACT, 1961, WHICH I S APPLICABLE ONLY IN CASES WHERE ASSESSMENT ORDER IS THE SUBJECT MATTER OF APP EAL BEFORE THE LEARNED CIT(APPEALS). IN THE CASE OF ASSESSEE, ASSESSMENT O RDER WAS THE SUBJECT MATTER OF AN APPEAL BEFORE THE ITAT. THE ASSESSING OFFICER HAS PASSED THE PENALTY ORDER AFTER CONSIDERING THE ORDER OF THE IT AT, THEREFORE, CLAUSE (A) OF SUB-SECTION (1) OF SEC. 275 OF THE ACT IS TO BE APP LIED FOR CALCULATING PERIOD OF LIMITATION FOR PASSING PENALTY ORDER. THE LEARN ED AR REFERRED PAGE NO. 45 OF THE PAPER BOOK I.E. COPY OF LETTER DATED 04.0 9.2013 OBTAINED FROM ITAT, DELHI SHOWING THE RECEIPT OF THE TRIBUNALS O RDER IN THE OFFICE OF THE CIT(JUDICIAL) ON 06.06.2011. HE ALSO PLACED RELIANC E ON THE FOLLOWING DECISIONS: I) CIT VS. MOHAIR INVESTMENT & TRAINING CO. (P) LT D. (2012) 345 ITR 51 (DEL.); II) (A) RAYALA CORPORATION (P) LTD. VS. UNION OF I NDIA (2007) 288 ITR 452 (MAD.); III) VLCC HEALTHCARE LTD. VS. ACIT (2010) 3 ITR (TRI) 51 (DEL.); 5 IV) CIT VS. JITENDER SINGH RATHOR (2013) 31 TAXM AN.COM 52 (RAJ.); V ) BILL METAL WORKS VS. ACIT (2012) 20 TAXMAN.C OM 329 (AHD.); 7. THE LEARNED SENIOR DR ON THE OTHER HAND TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW WITH THIS SUBMISSION THAT THE PENALTY ORDER DATED 29.3.2012 WAS WELL IN THE PRESCRIBED TIME LIMIT. 8. HAVING GONE THROUGH THE PROVISIONS OF LAW LAID D OWN UNDER SEC. 275 OF THE INCOME-TAX ACT, 1961, AND THE DECISIONS RELI ED UPON, WE FIND THAT THE HON'BLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF CIT VS. MOHAIR INVESTMENT & TRADING CO. (P) LTD. (SUPRA) HAS BEEN PLEASED TO HOLD THAT PERIOD OF SIX MONTHS PROVIDED FOR IMPOSITION OF PEN ALTY UNDER SEC. 275(1)(A) STARTS RUNNING AFTER THE SUCCESSIVE APPEAL FROM THE ASSESSMENT ORDER ARE FINALLY DECIDED BY THE LEARNED CIT(APPEALS) OR THE ITAT, AS THE CASE MAY BE, WHICHEVER PERIOD EXPIRES LATER. IT HAS BEEN HEL D THAT PROVISO TO SECTION 275(1)(A) OF THE ACT HAS ONLY THE EFFECT OF EXTENDI NG THE PERIOD OF IMPOSING PENALTY FROM SIX MONTHS TO WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER OF THE LEARNED CIT(APPEALS) IS RECEIVED AFTER 01.06.2003. THUS, THE PROVISO CARVES OUT AN EXCEPTI ON FROM THE MAIN SECTION IN AS MUCH AS IN CASES WHERE NO APPEAL IS FILED BEF ORE THE ITAT, THE 6 ASSESSING OFFICER MUST IMPOSE PENALTY WITHIN A PERI OD OF ONE YEAR TO BE RECKONED FROM THE END OF THE FINANCIAL YEAR IN WHIC H THE ORDER OF THE LEARNED CIT(APPEALS) IS RECEIVED BY THE LEARNED CIT (APPEALS). THE HONBLE COURT HAS HELD FURTHER THAT IF THE PROVISO IS READ OTHERWISE, IT WOULD OBLITERATE THE MAIN PROVISION ITSELF. SECTION 275(1 A) OF THE ACT DOES NOT DILUTE OR IN ANY MANNER RENDERED NUGATORY THE MAIN PROVISION WHICH SPELLS OUT THE LIMITATION PERIOD FOR LEVY OF PENALTY IN TH E CASE OF ORDER OF THE ITAT. THUS, PROVISO TO SEC. 275(1)(A) DOES NOT NULLIFY TH E PERIOD OF LIMITATION OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE ITAT IS RECEIVED BY THE ASSESSING OFFICER. IN THAT CASE BEFORE THE H ON'BLE HIGH COURT, THE ORDER OF THE ITAT IN THE QUANTUM APPEAL WAS RENDERE D ON 11.8.2008 AND THE ORDER LEVYING PENALTY WAS PASSED ON 26.2.2009 I.E. WITHIN THE PERIOD OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER WAS PASSED BY THE ITAT. THEREFORE, THE HON'BLE HIGH COURT WAS PLEASE D TO HOLD THAT PENALTY UNDER SEC. 271(1)(C) WAS LEVIED WITHIN THE PERIOD O F LIMITATION LAID DOWN IN SEC. 275(1)(A) OF THE ACT. 9. IN THE PRESENT CASE BEFORE US, AS PER COPY OF LE TTER DATED 04.09.2013 (PAGE NO. 45 OF THE PAPER BOOK) WHICH IS WRITTEN BY THE ASSISTANT REGISTRAR OF THE ITAT TO THE ASSESSEE INTIMATING THAT ORDER D ATED 11.3.2011 OF THE 7 ITAT IN THE QUANTUM APPEAL WAS SENT TO THE COMMISSI ONER OF INCOME-TAX (JUDICIAL) ON 11.5.2011 (BY HAND) AND THE SAME WERE RECEIVED IN THE OFFICE OF THE CIT(JUDICIAL) ON 06.06.2011 VIDE SR. NO. 34 OF THE DISPATCH REGISTER OF THE ITAT. THUS, AS PER THE RATIO OF THE CITED DEC ISIONS, THE LIMITATION PERIOD FOR LEVY OF PENALTY CAN ONLY BE AS PROVIDED FOR UND ER SEC. 275(1)(A) OF THE ACT, I.E. , SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE ITAT IS RECEIVED BY THE CIT. THUS, THE DATE OF EXPI RY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH ORDER OF THE ITAT WAS REC EIVED BY CIT WOULD BE 31.12.2011. THE PENALTY ORDER IN THE PRESENT CASE H AS BEEN PASSED ON 29.3.2012 WHICH AS PER THE PRESCRIBED TIME LIMIT SH OULD HAVE BEEN PASSED ON OR BEFORE 31.12.2011. THUS, WE HOLD THAT THE PENALT Y ORDER DATED 29.3.2012 IN THE PRESENT CASE IS BARRED BY LIMITATION. WE THU S WHILE SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW IN THIS REGARD DIRE CT THE ASSESSING OFFICER TO DELETE THE PENALTY OF RS.58,842 AS TIME BARRED. THE GROUNDS INVOLVING THE ISSUE ARE ACCORDINGLY ALLOWED. 10. IN RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 .07.2015 SD/- SD/- ( INTURI RAMA RAO ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17 /07/2015 MOHAN LAL 8 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR DATE DRAFT DICTATED ON COMPUTER 15.07.2015 DRAFT PLACED BEFORE AUTHOR 15.07.2015 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 17. 07.2015 APPROVED DRAFT COMES TO THE SR.PS/PS 23.07.201 5 KEPT FOR PRONOUNCEMENT ON 17.07.2015 FILE SENT TO THE BENCH CLERK 23.07.2015 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.