DCIT, New Delhi V. M/s. Thapar Homer Ltd., New Delhi

ITA 6422/DEL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3454 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 16-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Period of limitation; Initiation of penalty proceedings; Competent authority
• Section: 271(1)(c); 271E

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.6422/DEL/2016 ASSESSMENT YEAR: 2008-09 DY.COMMR. OF INCOME-TAX CENTRAL CIRCLE-15 ,NEW DELHI. VS M/S THAPAR HOMES LTD. B-10, SHIVALIK, MALVIYA NAGAR,NEW DELHI. PAN: AAECM0840R APPELLANT RESPONDENT ASSESSEE BY NONE REVENUE BY SHRI S.S. RANA, CIT( DR) ORDER PER K. NARASIMHA CHARY, JM CHALLENGING THE ORDER DATED 9.9.2016 IN APPEAL NO.237/11-12 FOR THE ASSESSMENT YEAR 2008-09 BY THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS)-XXVI, NEW DELHI, {HEREINAFTER REFERRED TO AS THE CIT(A)}, REVENUE PREFERRED THIS APPEAL. 2. THE SHORT QUESTION THAT ARISES FOR OUR CONSIDERATION IN THIS APPEAL IS WHETHER THE PROCEEDINGS FOR LEVY OF PENALTY ARE INITIATED WITH THE PASSING OF THE ORDER OF ASSESSMENT BY THE LEARNED AO OR WHETHER SUCH PROCEEDINGS HAVE COMMENCED WITH THE ISSUANCE OF THE NOTICE BY THE DATE OF HEARING 19.2.2019 DATE OF PRONOUNCEMENT 25.02.2019 2 LEARNED ADDL. COMMISSIONER. FACTS GIVING RISE TO THIS QUESTION ARE THAT, IN THIS MATTER, LEARNED AO BY ORDER DATED 31.12.2010 MADE THE ADDITION OF RS.3,00,65,000/- ON ACCOUNT OF CERTAIN ENTRIES IN THE DOCUMENTS AND INITIATED PENALTY PROCEEDINGS U/S 271E FOR REPAYING THE INTEREST ON LOANS OTHERWISE THAN BY CROSSED CHEQUES/DRAFTS. NOTICE U/S 274 READ WITH SECTION 271E WAS ISSUED ON 31.12.2010. THE MATTER WAS INTIMATED TO THE ADDL. CIT BY THE LEARNED AO BY LETTER DATED 7.6.2011 FOR FINALIZATION OF THE PENALTY PROCEEDINGS AS THE COMPETENT AUTHORITY TO IMPOSE THE PENALTY WAS THE ADDL. CIT/JCIT AND NOT THE AO. SHOW CAUSE NOTICE WAS ISSUED BY THE ADDL. CIT VIDE NOTICE DATED 13.6.2011 AND WAS REPLIED BY THE ASSESSEE ON 20.6.2011. ORDER U/S 271E OF THE INCOME-TAX ACT, 1961 (THE ACT) WAS PASSED ON 30.12.2011 LEVYING THE PENALTY OF RS.3,00,65,000/-. 3. ASSESSEE CHALLENGED THE SAME BEFORE THE LEARNED CIT(A) AND CONTENDED THAT SINCE THE PENALTY PROCEEDING WERE INITIATED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS IN THE FY 2010-11, NO PENALTY ORDERS CAN BE PASSED AFTER EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS IN THE COURSE OF WHICH ACTION FOR IMPOSITION OF PENALTY WAS INITIATED OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY WAS INITIATED. IT WAS, THEREFORE, CONTENDED THAT SINCE FY 2010-11 WAS EXPIRED BY 31.3.2011 AND SIX MONTHS FROM THE INITIATION OF THE PENALTY PROCEEDINGS EXPIRED ON 30.6.2011, NO PENALTY COULD HAVE BEEN PASSED AT THE LATEST SUBSEQUENT TO 30.6.2011. ON THIS PREMISE, IT WAS SUBMITTED THAT THE PENALTY ORDER DATED 30.12.2011 WHICH WAS CERTAINLY AFTER THE PERIOD OF LIMITATION PRESCRIBED U/S 271(1)(C) OF THE ACT WAS BARRED BY LIMITATION. 4. LEARNED CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE IN THE LIGHT OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF 3 PCIT VS. IKD CAPITAL AND FINLEASE LTD., ITA NO.780/2015 AND DELETED THE PENALTY. REVENUE IS, THEREFORE, BEFORE US IN THIS APPEAL STATING THAT THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE ORDER WAS PASSED WITHIN SIX MONTHS OF INITIATION OF PROCEEDINGS BY THE LD. ADDL. CIT WHICH WAS COMPETENT TO LEVY THE PENALTY AND, THEREFORE, THE PENALTY OF RS.3,00,65,000/- SHOULD NOT HAVE BEEN DELETED ON THE GROUND OF LIMITATION. 5. LEARNED DR PLACED RELIANCE ON THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF GRIHLAKSHMI VISION, ITA NO.8386 OF 2014 REPORTED IN AIT-2015-133-HC FOR THE PRINCIPLE THAT THE ASSESSMENT ORDER SHOULD BE TAKEN AS THE INITIATION OF THE PENALTY PROCEEDINGS INASMUCH AS THE LEARNED AO IS NOT COMPETENT TO INITIATE SUCH PROCEEDINGS AND SINCE SUCH INITIATION OF PROCEEDINGS COULD HAVE BEEN DONE BY THE JT. COMMISSIONER, LIMITATION SHALL BE RECKONED FROM THE DATE OF THE ORDER PASSED BY THE JT. COMMISSIONER. 6. NONE APPEARED FOR THE ASSESSEE. SINCE THE ASSESSEE FAILED TO APPEAR AND THERE IS NEITHER REPRESENTATION NOR ANY REQUEST FOR ADJOURNMENT, WE PROCEED TO DEAL WITH THE MATTER AS PER RECORD. 7. WE HAVE GONE THROUGH THE ORDER OF THE HONBLE KERALA HIGH COURT IN THE CASE OF GRIHLAKSHMIVISION (SUPRA). HOWEVER, LEARNED CIT(A) IN HIS ORDERNOTICED THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF IKD CAPITAL &FINLEASE LTD. (SUPRA), BUT ALSOTHE CIRCULAR NO.9 DATED 26.4.2016 ISSUED BY CBDT WHEREIN IT WAS OBSERVED THAT WHERE ANY HIGH COURT DECIDES THIS ISSUE ON THE ASPECT OF LIMITATION CONTRARY TO THE DEPARTMENT VIEW THEREON, SHALL NOT BE OPERATIVE IN THE AREA FALLING UNDER THE JURISDICTION OF THE RELEVANT HIGH COURT. LEARNED CIT(A) AFTER NOTICING THIS PARA 6 OF THE CIRCULAR, WHILE RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH 4 COURT, HOLD THAT THE PERIOD OF LIMITATION TO BE STARTING FROM THE DATE OF ISSUANCE OF NOTICE BY THE LD. AO AND NOT FROM THE INITIATION OF PENALTY PROCEEDINGS ISSUED BY THE JCIT/ACIT AND ON THAT SCORE HELD THAT THE PENALTY ORDER DATED 30.12.2011 IS UNSUSTAINABLE ON THE GROUND THAT IN VIEW OF THE PERIOD OF LIMITATION PROVIDED U/S 275(1)(C), LIMITATION EXPIRES AT THE LATEST BY 30.6.2011 ITSELF. 8. IN SO FAR AS THE FACTS AND DATES ARE CONCERNED, THERE IS NO DISPUTE. WE, THEREFORE, DO NOT FIND ANY ILLEGALITY OR IRREGULARITY IN THE ORDER OF THE LEARNED CIT(A) AND CONSEQUENTLY, FIND THE GROUNDS OF APPEAL AS DEVOID OF MERITS. THERE IS NO NEED TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THE SAME IS ACCORDINGLY UPHELD AND THE APPEAL OF THE REVENUE STANDS DISMISSED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH FEBRUARY, 2019. SD/- SD/- (PRASHANT MAHARISHI) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25 TH FEBRUARY, 2019. VJ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 DRAFT DICTATED ON 19.02.2019 DRAFT PLACED BEFORE AUTHOR 20.02.2019 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON DATE OF UPLOADING ORDER ON THE WEBSITE FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.