ITO, CHENNAI V. Shri S.K.Krishnakanth, CHENNAI

ITA 654/CHNY/2012

• Counselvise Citation: 65421714 RSA 2012
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 31-12-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 29-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Period of limitation; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO.654(MDS)/2012 ASSESSMENT YEAR : 2003-04 THE INCOME-TAX OFFICER, MEDIA WARD I, CHENNAI. VS. SHRI S.K.KRISHNAKANTH, 10-SHREE APARTMENTS, BHARATHIYAR ST., SALIGRAMAM CHENNAI-600 093. PAN ALLPK0803H. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GURUBASHYA M, JCIT RESPONDENT BY : NONE DATE OF HEARING : 31 ST DECEMBER, 2012 DATE OF PRONOUNCEMENT : 31 ST DECEMBER, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THIS APPEAL IS FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2003-04. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-VI AT CHENNAI, DATED 23-12-2011. THE APPEAL ARISES OUT O F THE - - ITA 654 OF 2012 2 PENALTY ORDER PASSED BY THE ASSESSING AUTHORITY UND ER SECTION 271D OF THE INCOME-TAX ACT, 1961. 2. THE ASSESSEE IS A FILM PRODUCER. IN THE IMPUGN ED ASSESSMENT YEAR, THE ASSESSEE HAD AVAILED CASH LOAN S TOTALING TO ` 32,90,000/-. THE ASSESSING OFFICER FOUND THAT THI S IS IN CONTRAVENTION OF THE LAW STATED IN SECTION 269SS OF THE INCOME- TAX ACT, 1961. THE CONSEQUENCE OF CONTRAVENTION OF SECTION 269SS IS LEVY OF PENALTY UNDER SECTION 271D OF THE ACT. ACCORDINGLY, THE ADDITIONAL COMMISSIONER OF INCOME- TAX, MEDIA RANGE, CHENNAI-34, LEVIED A PENALTY OF ` 32,90,000/- UNDER SECTION 271D OF THE ACT. 3. THIS ORDER OF PENALTY WAS TAKEN IN FIRST APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS), WHO DELETED THE PENALTY. THE REVENUE FILED SECOND APPEAL BEFOR E THE TRIBUNAL AGAINST THE SAID ORDER OF THE COMMISSIONER OF INCOME- TAX(APPEALS). THE TRIBUNAL REMITTED BACK THE ISSUE TO THE ASSESSING OFFICER THROUGH THEIR ORDER DATED 20-6-20 08 IN ITA NO.2292(MDS)/2007. THE TRIBUNAL REMITTED BACK THE ISSUE WITH THE FOLLOWING DIRECTION:- - - ITA 654 OF 2012 3 WE REMIT THIS ISSUE TO THE FILE OF ASSESSING OFFICER TO GIVE A FINDING ON THE CLAIM OF THE ASSESSEE THAT THE CASH AMOUNTS WERE OBTAINED FOR URGENT BUSINESS NECESSITIES. 4. IN THE REMAND ASSESSMENT PROCEEDINGS ALSO, THE ASSESSING OFFICER LEVIED THE PENALTY ON THE GROUND THAT THERE WAS NO URGENT BUSINESS NECESSITY AS PROVED BY THE A SSESSEE AND THERE WAS NO REASONABLE CAUSE FOR CONTRAVENING THE PROVISIONS OF LAW STATED IN SECTION 269SS OF THE AC T. AS THE PENALTY WAS LEVIED IN THE SECOND ROUND ALSO, THE AS SESSEE AGITATED THE ISSUE BEFORE THE COMMISSIONER OF INCOM E- TAX(APPEALS) FOR THE SECOND TIME. THE COMMISSIONER OF INCOME- TAX(APPEALS) THROUGH HIS ORDER DATED 23-12-2011ALLO WED THE APPEAL FILED BY THE ASSESSEE AND DELETED THE PENALT Y. THE REASON STATED BY THE COMMISSIONER OF INCOME-TAX(APP EALS) IS THAT THE ASSESSING OFFICER HAS PASSED THE ORDER BEY OND THE TIME LIMIT. HE FOUND THAT THE ASSESSING OFFICER HAS REC EIVED THE ORDER OF THE TRIBUNAL ON 22-7-2008 AND AS SUCH HE WAS REQ UIRED TO PASS THE ORDER OF PENALTY UNDER SECTION 271D WITHIN SIX MONTHS - - ITA 654 OF 2012 4 AS PER SECTION 275 OF THE INCOME-TAX ACT, 1961. AC CORDINGLY, THE PENALTY ORDER SHOULD HAVE BEEN PASSED ON OR BEFORE 22-1-2009. BUT THE PENALTY ORDER HAS BEEN PASSED ON 30-12-2009 . THE COMMISSIONER OF INCOME-TAX(APPEALS) HELD THAT THE O RDER IS BARRED BY LIMITATION. IT IS ON THIS GROUND THAT TH E PENALTY HAS BEEN DELETED. 5. THE REVENUE AGAIN CAME IN APPEAL BEFORE THE TRIBUNAL. THE GROUNDS RAISED BY THE REVENUE IN THE PRESENT APPEAL READ ASUNDER:- 1. THE LEARNED CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED U/S 271D OF ` 32,90,000/ ` 32,90,000/ ` 32,90,000/ ` 32,90,000/- -- -. .. . 2. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSEE HAD NOT RAISED ANY OBJECTION DURING THE REMANDED PENALTY PROCEEDINGS U/S 271D OF THE INCOME-TAX ACT. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT ACCORDING TO SECTION 292BB WHERE AN ASSESSEE HAD APPEARED IN ANY PROCEEDING AND CO-OPERATED IN THE PROCEEDINGS UNDER THE - - ITA 654 OF 2012 5 ACT, SUCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDING OR INQUIRY UNDER THIS ACT THAT THE NOTICE WAS (A) NOT SERVED UPON HIM IN TIME, OR (B) NOT SERVED UPON HIM OR (C) SERVED UPON HIM IN AN IMPROPER MANNER. 4. IT IS SUBMITTED THAT THE ASSESSEE HAD CO- OPERATED WITH THE DEPARTMENT AT THE TIME OF PENALTY PROCEEDINGS AND FOR THE FIRST TIME BEFORE THE CIT(A) HE HAD RAISED THAT OBJECTION THAT PENALTY PROCEEDINGS WERE TIME BARRED. 5. IT IS FURTHER SUBMITTED THAT THE ASSESSEE BY APPEARING AND CO-OPERATING WITH THE DEPARTMENT IN THE PENALTY PROCEEDINGS INDIRECTLY ACKNOWLEDGED THAT THE ENTIRE PROCEEDINGS WAS NOT BARRED BY LIMITATION. 6. WHEN THE MATTER WAS CALLED ON FOR HEARING, NOBO DY WAS PRESENT FOR THE RESPONDENT-ASSESSEE. WHEN THIS CASE WAS TAKEN UP FOR HEARING ON AN EARLIER OCCASION, NOBODY WAS PRESENT - - ITA 654 OF 2012 6 FOR THE RESPONDENT-ASSESSEE. THE HEARING WAS ADJOU RNED WITH A DIRECTION TO ISSUE FRESH NOTICE AT THE NEW ADDRESS AVAILABLE IN THE LETTER FILED BY THE ASSESSEE. AGAIN THE MATTER WAS POSTED FOR HEARING AFTER ISSUING SUCH A NOTICE, BUT NOBODY WAS PRESENT. THEREFORE, IT WAS DIRECTED THAT THE NOTICE MAY BE S ERVED ON THE ASSESSEE THROUGH THE INCOME-TAX DEPARTMENT. THE NO TICE HAS BEEN DULY SERVED BY THE INCOME-TAX DEPARTMENT. INS PITE OF SERVICE OF NOTICE, NOBODY APPEARED FOR THE RESPONDE NT-ASSESSEE. THEREFORE, WE PROCEED TO DISPOSE OF THE MATTER EX P ARTE, QUA THE ASSESSEE. 7. WE HEARD SHRI GURUBASHYAM, THE LEARNED JOINT COMMISSIONER OF INCOME-TAX APPEARING FOR THE REVENU E. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS RELIED ON S ECTION 275 OF THE INCOME-TAX ACT, 1961 TO COMPUTE THE LIMITATI ON PERIOD IN PASSING THE IMPUGNED PENALTY ORDER. IT IS TO BE SE EN THAT SECTION 275 PROVIDES FOR IMPOSITION OF PENALTY. IN THE PRE SENT CASE PENALTY WAS ALREADY IMPOSED BY THE ASSESSING AUTHOR ITY WITHIN THE TIME IN HIS FIRST ROUND OF PROCEEDINGS. THE SE COND ROUND OF IMPOSING OF PENALTY WAS NECESSITATED BECAUSE OF THE ORDER OF THE TRIBUNAL REMITTING BACK THE ISSUE TO THE ASSESSING OFFICER FOR - - ITA 654 OF 2012 7 FRESH CONSIDERATION. THE IMPUGNED ORDER NOW AGITAT ED BEFORE THE TRIBUNAL IS NOT THE CASE OF INITIATING PENALTY BY THE ASSESSING AUTHORITY. PENALTY WAS INITIATED AND IMPOSED IN TH E FIRST ROUND ITSELF WITHIN THE PERIOD OF LIMITATION. THEREFORE, WE FIND THAT SECTION 275 HAS NO APPLICATION IN THE PRESENT CASE. IN FACT THE PROVISION OF LAW STATED IN SECTION 153(2A) IS APPLI CABLE IN THE PRESENT CASE. WHEN SECTION 153(2A) IS APPLIED, THE IMPUGNED PENALTY ORDER WAS PASSED WITHIN THE TIME LIMIT. TH EREFORE, WE ARE NOT ABLE TO AGREE WITH THE FINDING ARRIVED AT B Y THE COMMISSIONER OF INCOME-TAX(APPEALS). ON THIS GROUN D ALONE HIS ORDER IS LIABLE TO BE SET ASIDE. 8. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ALLOWED THE APPEAL OF THE ASSESSEE ON THE GROUND OF LIMITATION, BUT HE HAS NOT CONSIDERED THE APPEAL ON ITS MERITS. THEREFORE, WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOM E- TAX(APPEALS) AND REMIT BACK THE FILE TO HIM TO DISP OSE OF THE APPEAL ON ITS MERITS. 9. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. - - ITA 654 OF 2012 8 ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON MONDAY, THE 31 ST OF DECEMBER, 2012 AT CHENNAI. SD/- SD/- (S.S.GODARA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 31 ST DECEMBER, 2012. V.A.P. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.