ITO, Jaipur V. PRASHANT SHARMA, Jaipur

ITA 960/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1916 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VRINDERA MEHTA
• Assessee Lawyers: V K JAIN
• Keywords: Period of limitation; Question of law
• Section: 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK L NL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 960/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 INCOME TAX OFFICER, WARD-4(4), JAIPUR. CUKE VS. SHRI PRASHANT SHARMA, A-34, NEHRU NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AFEPS4515D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 961/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 INCOME TAX OFFICER, WARD-4(4), JAIPUR. CUKE VS. SHRI PRASHANT SHARMA, A-34, NEHRU NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AFEPS4515D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESP ONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI V.K. JAIN (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VRINDERA MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/10/2017 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 15/11/2017 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THESE TWO APPEALS BY THE REVENUE AGAINST TWO SEPAR ATE ORDERS BY THE CIT(A) BOTH DATED 16.08.2016 ARISING FROM T HE PENALTY ORDERS ITA NO. 960&961/JP/2016 ITO VS. SH. PRASHANT SHARMA 2 PASSED U/S 271D AND 271E FOR THE A.Y. 2009-10. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS AS UNDER:- IN ITA NO. 960/JP/2016 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, LD. CIT(APPEALS) HAS ERRED IN DELETING THE PENALTY OF RS. 1,48,22,585/- IMPOSED U/S 271D AS THE LOAN/DEPO SITS WERE ACCEPTED/RECEIVED IN CASH BY THE ASSESSEE? 2. THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. IN ITA NO. 961/JP/2016 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, LD. CIT(APPEALS) HAS ERRED IN DELETING THE PENALTY OF RS. 1,17,04,411/- IMPOSED U/S 271E AS THE LOAN/DEPO SITS WERE REPAID IN CASH BY THE ASSESSEE? 2. THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 2. DURING THE COURSE OF SCRUTINY ASSESSMENT U/S 1 43(3) THE AO NOTICED THAT THE ASSESSEE HAS RECEIVED CASH ON VARI OUS DATES IN PERSON AS WELL AS IN BANK ACCOUNT AND SUBSEQUENTLY PAID TH E AMOUNT IN CASH TO M/S MPPL WHICH IS IN CONTRAVENTION OF THE PROVISION S OF SECTION 269SS AND 269T OF THE ACT. THE AO CALLED CERTAIN INFORMAT ION FROM M/S MPPL, IN RESPONSE TO WHICH, THE COMPANY HAD SUBMITTED THA T THE ASSESSEE IS HAVING IMPREST ACCOUNT IN THE BOOKS OF THE COMPANY. THE AO FOUND THAT THERE WAS OPENING CASH BALANCE OF RS. 19,85,49 5/- ON 01.04.2008 IN THE HANDS OF THE ASSESSEE AND DURING THE PERIOD THE ASSESSEE HAS ITA NO. 960&961/JP/2016 ITO VS. SH. PRASHANT SHARMA 3 ALSO RECEIVED CASH AMOUNTING TO RS. 1,48,22,585/- O N VARIOUS DATES, THE CLOSING BALANCE AS ON 31. 03.2009 WAS AT RS. 51,03, 669/-. SINCE THE ASSESSE HAS RECEIVED SUBSTANTIAL AMOUNT IN CASH AND ALSO PAID A SUBSTANTIAL AMOUNT IN CASH, THEREFORE, THE AO INITI ATED THE PENALTY U/S 271D AS WELL AS 271E OF THE ACT. THE ASSESSEE RAISE D OBJECTIONS BEFORE THE AO INCLUDING THE ISSUE OF LIMITATION THAT THE L IMITATION FOR PASSING THE PENALTY ORDER U/S 271D AND 271E WOULD RECKON FR OM THE DATE WHEN THE SHOW CAUSE NOTICE WAS ISSUED BY THE AO AND NOT FROM THE DATE WHEN THE SHOW CAUSE NOTICE WAS ISSUED BY THE JOINT COMMISSIONER WHO IS COMPETENT TO PASS THE PENALTY ORDERS. THE AO AFT ER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE REJECTED THE CO NTENTION OF THE ASSESSEE AND PASSED THE ORDERS OF LEVY OF PENALTY U /S 271D AS WELL AS 271E OF THE ACT. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE CIT(A) AND RAISED THE ISSUE OF VALIDITY OF THE IMPUGNED ORDERS PASSED BY THE JOINT COMMISSIONER U/S 271D AND 271E BEING BARRED BY LIMITATION AS PROVIDED U/S 275 OF THE ACT. THE LD. CIT(A) HELD THAT THE ORDERS PASSED BY THE JOINT COMMISSIONER U/S 271D AN D 271E ARE BEYOND 6 MONTHS FROM THE DATE OF INITIATION OF THE PENALTY PROCEEDINGS VIDE FIRST SHOW CAUSE NOTICE ISSUED BY THE AO AND A CCORDINGLY THE LD. CIT(A) SET ASIDE THE PENALTY ORDERS PASSED U/S 271 D AND 271E. ITA NO. 960&961/JP/2016 ITO VS. SH. PRASHANT SHARMA 4 3. BEFORE US, THE LD. DR HAS SUBMITTED THAT INITIAT ION OF PENALTY PROCEEDINGS U/S 271D AND 271E WOULD BE RECKONED BY THE NOTICE ISSUED BY JOINT CIT WHO IS COMPETENT TO LEVY OF PENALTY TH EREFORE, ANY NOTICE ISSUED BY THE ASSESSING OFFICER WHO IS NOT COMPETEN T TO PROCEED WITH THE PENALTY PROCEEDINGS U/S 271D AND 271E OF THE AC T WILL BE INCONSEQUENTIAL FOR THE PURPOSE OF DECIDING THE LIM ITATION. THUS THE LD. DR HAS CONTENDED THAT THE LD. CIT(A) COMMITTED AN E RROR BY COMPUTING THE LIMITATION FOR THE PURPOSE OF PASSING THE ORDER U/S 271D AND 271E OF THE ACT FROM THE DATE OF THE NOTICE ISSUED BY TH E AO INSTEAD OF THE DATE OF THE NOTICE ISSUED BY THE JCIT. HE HAS RELIE D UPON THE DECISION OF HONBLE KERALA HIGH COURT IN CASE OF GRIHLAXMI VISI ON VS. CIT 379 ITR 100 AND SUBMITTED THAT THE HONBLE HIGH COURT HAS H ELD THAT THE PENALTY PROCEEDINGS UNDER THE PROVISIONS OF SECTION 271D AND 271E ARE INITIATED BY THE JOINT COMMISSIONER. 4. ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE H AS SUBMITTED THAT THE ITO ISSUED A NOTICE DATED 30.12.2011 U/S 274 FO R LEVY OF PENALTY U/S 271D AND 271E AND THEREAFTER WHEN THE MATTER WA S TRANSFERRED TO THE J.CIT AN ANOTHER SHOW CAUSE NOTICE WAS ISSUED B Y THE ACIT ON 10.09.2012. FINALLY THE IMPUGNED ORDERS U/S 271D AN D 271E WERE PASSED ON 25.03.2013 WHICH ARE BEYOND THE LIMITATIO N PROVIDED U/S ITA NO. 960&961/JP/2016 ITO VS. SH. PRASHANT SHARMA 5 275(1)(C) OF THE ACT. HE HAS RELIED UPON THE DECISI ON OF HONBLE JURISDICTION HIGH COURT IN CASE OF CIT VS. JITENDR A SINGH RATHORE 352 ITR 327. THUS THE LD. AR HAS CONTENDED THAT THE LD. CIT(A) HAS FOLLOWED THE DECISION OF THE HONBLE JURISDICTION HIGH COURT AND THEREFORE NO FAULT CANNOT BE FOUND IN THE IMPUGNED ORDERS OF THE CIT(A ). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THERE ARE TWO SHOW CAUSE NOTICES ISSUED U/S 274 OF THE ACT FOR INITIATION OF PENALTY U/S 271D AND 271E OF THE ACT. THE FIRST SHOW CAUSE NOTICE WAS IS SUED BY THE ITO ON 30.12.2011 AT THE TIME OF COMPLETION OF THE ASSESSM ENT AND THE SECOND SHOW CAUSE NOTICE WAS ISSUED THEREAFTER BY THE ADDI TIONAL/JOINT COMMISSIONER ON 10.09.2012. THE ASSESSEE HAS RAISED THE QUESTION OF VALIDITY OF THE ORDERS PASSED U/S 271D AND 271E BEI NG BARRED BY LIMITATION AS THESE ORDERS DATED 25.03.2013 AS PER THE ASSESSEES WERE BEYOND THE PERIOD OF 6 MONTHS FROM THE DATE OF THE FIRST SHOW CAUSE NOTICE DATED 30.11.2011 THE LIMITATION AS PROVIDED U/S 275(1)(C) OF THE ACT. SO FAR AS THE FACT OF ISSUING TWO SHOW CAUSE N OTICES ONE BY THE ITO ON 30.12.2011 AND ANOTHER BY THE ADDITIONAL/JOINT C OMMISSIONER ON 10.09.2012, THE SAME IS NOT DISPUTED BY THE REVENUE . THEREFORE QUESTION ARISES WHETHER THE LIMITATION FOR THE PURP OSE OF LEVY OF PENALTY ITA NO. 960&961/JP/2016 ITO VS. SH. PRASHANT SHARMA 6 U/S 271D AND 271E WOULD RECKON FROM THE DATE OF SH OW CAUSE NOTICE ISSUED BY THE ITO. THOUGH HE WAS NOT COMPETENT THE PASSED THE ORDER U/S 271D AND 271E OR FROM THE DATE ON WHICH THE SHO W CAUSE NOTICE ISSUED BY THE ADDITIONAL/JOINT COMMISSIONER ON 10.0 9.2012. THE LD. AR HAS PLACED RELIANCE ON THE DECISION OF THE HONBLE JURISDICTION HIGH COURT IN CASE OF CIT VS. JITENDRA SINGH RATHORE (S UPRA) WHERE AS THE LD. DR HAS RELIED UPON THE DECISION OF HONBLE KERA LA HIGH COURT IN CASE OF GIRHLAXMI VS. AIT (SUPRA). WE FIND THAT THERE AR E DIVERGENT VIEW ON THIS POINT OF RECKONING OF LIMITATION FROM THE DATE OF ISSUING THE NOTICE BY THE ITO OR BY THE JCIT. THE HONBLE JURISDICTION HIGH COURT HAS TAKEN A VIEW THAT EVEN THOUGH THE AO WAS NOT COMPETENT TO PASS ORDER U/S 271D AND 271E THE LIMITATION WOULD RECKON FROM THE DATE OF SHOW CAUSE NOTICE WAS ISSUED BY THE AO WHEREAS, THE HON BLE KERALA HIGH COURT HELD THAT THE PROCEEDINGS FOR LEVY OF PENALTY U/S 271D AND 271E ARE INITIATED WITH ISSUANCE OF NOTICE BY JOINT COMM ISSIONER AND NOT BY THE ASSESSING OFFICER. THEREFORE THE HONBLE KERALA HIGH COURT HELD THAT THE LIMITATION WOULD RECKON FROM THE DATE OF THE SH OW CAUSE NOTICE ISSUES BY THE JOINT COMMISSIONER. THUS IT IS CLEAR THAT TWO DIFFERENT HIGH COURTS HAVE TAKEN THE VIEWS CONTRARY TO EACH O THER HOWEVER, FOR THE JAIPUR BENCHES OF THIS TRIBUNAL THE DECISION OF THE JURISDICTION HIGH ITA NO. 960&961/JP/2016 ITO VS. SH. PRASHANT SHARMA 7 COURT IS BINDING PRECEDENT. THE HONBLE HIGH COURT IN CASE OF CIT VS. JITENDRA SINGH RATHORE (SUPRA) HAS HELD IN PARA 8 T O 10 AS UNDER:- 8. IN THE PRESENT CASE, THE NOTICE FOR ISSUANCE OF TH E PENALTY PROCEEDINGS UNDER SECTION 271D OF THE ACT FOR THE ALLEGED CONTRAVENTION OF PR OVISIONS OF SECTION 269SS WAS ISSUED TO THE ASSESSEE, OF COURSE BY THE AO, ON 25. 03.2003. EVEN IF THE MATTER HAD OTHERWISE BEEN IN APPEAL BEFORE THE CIT(A) AGAINST THE ORIGINAL ASSESSMENT ORDER AND THE APPEAL WAS DECIDED ON 13.02.2004, THE SAME WAS HARDLY OF RELEVANCE SO FAR THE PENALTY PROCEEDINGS UNDER SECTION 271D WERE CONCERN ED. AS HELD BY THIS COURT IN HISSARIA BROS. ( SUPRA ), COMPLETION OF APPELLATE PROCEEDINGS ARISING OUT OF ASSESSMENT PROCEEDINGS HAS NO RELEVANCE OVER SUSTAI NING SUCH PENALTY PROCEEDINGS. AS HELD CLEARLY BY THIS COURT, IN SUCH A MATTER, CL AUSE (C) OF SECTION 275 (1) WOULD BE APPLICABLE. SECTION 275(1)(C) COULD BE NOTICED AS U NDER:- '275. BAR OF LIMITATION FOR IMPOSING PENALTIES. (1) NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHALL BE PASSED- ..... ( C ) IN ANY OTHER CASE, AFTER THE EXPIRY OF THE FINANC IAL 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 EN D OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED, WHICHEVER P ERIOD EXPIRES LATER.' 9. IN THE PRESENT CASE, THE FIRST SHOW CAUSE NOTICE F OR INITIATION OF PROCEEDINGS WAS ISSUED BY THE AO ON 25.03.2003 AND WAS SERVED ON TH E ASSESSEE ON 27.03.2003. OBVIOUSLY, THE LATER PERIOD ALSO EXPIRED ON 30.09.2 003 WHEN SIX MONTHS EXPIRED FROM THE END OF THE MONTH IN WHICH THE ACTION FOR IMPOSI NG THE PENALTY WAS INITIATED. THE ORDER AS PASSED BY THE JOINT COMMISSIONER OF INCOME TAX FOR THE PENALTY UNDER SECTION 271D ON 28.05.2004 WAS CLEARLY HIT BY THE B AR OF LIMITATION AND HAS RIGHTLY BEEN SET ASIDE IN THE ORDERS IMPUGNED. 10. IN VIEW OF THE ABOVE, OUR ANSWER TO THE FORMULATED QUESTION OF LAW IS THAT EVEN WHEN THE AUTHORITY COMPETENT TO IMPOSE PENALTY UNDE R SECTION 271D WAS THE JOINT COMMISSIONER, THE PERIOD OF LIMITATION FOR THE PURP OSE OF SUCH PENALTY PROCEEDINGS WAS NOT TO BE RECKONED FORM THE ISSUE OF FIRST SHOW CAUSE BY THE JOINT COMMISSIONER; BUT THE PERIOD OF LIMITATION WAS TO BE RECKONED FRO M THE DATE OF ISSUE OF FIRST SHOW CAUSE FOR INITIATION OF SUCH PENALTY PROCEEDINGS. F OR THE PURPOSE OF PRESENT CASE, AS OBSERVED HEREINABOVE, FOR THE PROCEEDINGS HAVING BE EN INITIATED ON 25.03.2003, THE ORDER PASSED BY THE JOINT COMMISSIONER UNDER SECTIO N 271D ON 28.05.2004 WAS HIT BY THE BAR OF LIMITATION. THE CIT(A) AND THE TRIBUNAL HAVE, THUS, NOT COMMITTED ANY ERROR IN SETTING ASIDE THE ORDER OF PENALTY. ITA NO. 960&961/JP/2016 ITO VS. SH. PRASHANT SHARMA 8 WE FURTHER NOTE THAT THE HONBLE JURISDICTION HIGH COURT HAS REITERATED THIS VIEW IN CASE OF CIT VS. BANSHI LAL RATHI VIDE ORDER DATED 17.05.2013 ITA NO. 119 OF 2011 FOLLOWING THE DECIS ION IN CASE OF CIT VS JITENDRA SINGH RATHORE RESPECTIVELY FOLLOWING TH E DECISION OF HONBLE JURISDICTION HIGH COURT. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE IMPUGNED ORDERS BY THE LD. CIT(A). IN THE RESULT, THE APPEALS OF THE REVENUES ARE DIS MISSED ORDER PRONOUNCED IN THE OPEN COURT ON 15/11/2017 SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 15/11/2017. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO), WARD-4(4), JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- SHRI PRASHANT SHARMA, A-34, NEHRU NAGAR, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 960&961/JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR