Smt. U.V.Zuhara, Kanhandad V. The DCIT, Kannur

ITSSA 1/COCH/2014

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0301 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-08-2014
• Assessment Year: misc
• Appeal Filed On: 05-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Assessee Lawyers: V P MOHANAN
• Keywords: Period of limitation; Initiation of penalty proceedings
• Section: 15

Judgement Text

1 IT(SS)A NO.01/COCH/2014 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T(SS).A NO. 01/COCH/2014 (BLOCK PERIOD 1997-98 TO 2003-04) U.V. ZUHARA VS DY.CIT, CIR.1 PALAKKI MEDICAL, MANIKKOTH KOCHI KANHANGAD PAN : AACPZ2884K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.P. MOHANAN RESPONDENT BY : SMT. LATHA V KUMAR DATE OF HEARING : 08-08-2014 DATE OF PRONOUNCEMENT : 28-08-2014 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A), KOZHIKODE CONFIRMING THE PENALTY LEVIED U/S 158BFA( 2) OF THE ACT. 2. SHRI V.P. MOHANAN, THE LD.COUNSEL FOR THE ASSESS EE SUBMITTED THAT HE IS NOT CHALLENGING THE ORDER OF PENALTY ON MERIT . ACCORDING TO THE LD.COUNSEL, HE CHALLENGES THE ORDER ONLY ON LIMITAT ION. THE LD.COUNSEL SUBMITTED THAT THE ASSESSMENT ORDER WAS PASSED BY T HE ASSESSING OFFICER ON 30-08-2004 AND THE CIT(A) PASSED THE ORDER ON 09 -02-2009. ITAT 2 IT(SS)A NO.01/COCH/2014 PASSED ITS ORDER ON 22-08-2008. THE HIGH COURT PAS SED THE ORDER ON 30- 03-2010. THE PENALTY WAS INITIATED U/S 158BFA(2) B Y ISSUING A NOTICE ON 08-10-2010 AND PENALTY WAS IN FACT IMPOSED BY AN OR DER DATED 18-11- 2010. REFERRING TO SECTION 158BFA(3)(C), THE LD.CO UNSEL SUBMITTED THAT WHENEVER THERE IS AN APPEAL TO THE APPELLATE TRIBUN AL, THE PENALTY ORDER HAS TO BE PASSED WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE TRIBUNAL WAS RECEIVED BY THE COMMISSIO NER OR CHIEF COMMISSIONER, AS THE CASE MAY BE. IN THIS CASE, TH E TRIBUNAL ORDER IS DATED 22-08-2008, THEREFORE, INITIATION OF PENALTY PROCEEDINGS ON 08-10- 2010 I.E. AFTER TWO YEARS IS BEYOND THE PERIOD PRES CRIBED U/S 158BFA(3)(C). ACCORDING TO THE LD.COUNSEL, NO ORDER LEVYING PENAL TY COULD BE PASSED AFTER EXPIRY OF SIX MONTHS. 3. ON THE CONTRARY, THE LD.DR SUBMITTED THAT U/S 15 8BFA(2), THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) MAY INITIATE PROCEEDINGS IN THE COURSE OF ANY PROCEEDINGS. THE WORDINGS A NY PROCEEDINGS WOULD HAVE LARGER MEANING. THEREFORE, EVERY ACTION OF TH E DEPARTMENT IS PROCEEDINGS. WHEN THE APPEAL WAS PENDING BEFORE TH E HIGH COURT, ACCORDING TO THE LD.COUNSEL, THE PROCEEDINGS WERE S AID TO BE CONTINUING AND THE HIGH COURT DISMISSED THE APPEAL ONLY ON 19- 07-2010, THEREFORE, WITHIN A PERIOD OF SIX MONTHS, THE ASSESSING OFFICE R HAS PASSED THE PENALTY ORDER. ON A QUERY FROM THE BENCH, WHEN THERE IS NO REFERENCE ABOUT THE 3 IT(SS)A NO.01/COCH/2014 APPEAL TO HIGH COURT IN SECTION 158BFA(3)(C) CAN TH E DEPARTMENT WAIT FOR THE DECISION OF THE HIGH COURT FOR INITIATING THE P ENALTY PROCEEDINGS, THE LD.DR SUBMITTED THAT PENALTY WAS LEVIED ON THE UNDI SCLOSED INCOME. THOUGH SECTION 158BFA(3)(C) SPEAKS ABOUT THE RECEIP T OF THE ORDER FROM THE COMMISSIONER (APPEALS) OR TRIBUNAL, ONE CAN PRE SUME THAT THE SAME PRINCIPLE WOULD BE APPLICABLE WHEN THE APPEAL IS FI LED BEFORE THE HIGH COURT ALSO. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LANG UAGE OF SECTION 158BFA(3)(C) IS VERY CLEAR THAT NO ORDER IMPOSING P ENALTY UNDER SUB SECTION (2) SHALL BE PASSED AFTER SIX MONTHS FROM T HE DATE OF RECEIPT OF ORDER FROM THE TRIBUNAL, WHENEVER, AN APPEAL IS FIL ED BEFORE THE TRIBUNAL. THERE IS NO REFERENCE ABOUT THE APPEAL BEFORE THE H IGH COURT. THE INCOME-TAX ACT HAS TO BE INTERPRETED AS IT IS LEGIS LATED BY THE PARLIAMENT. NO SENTENCE OR WORD CAN BE INSERTED. WHEN THE LANG UAGE OF SECTION IS VERY CLEAR AND UNAMBIGUOUS, THIS TRIBUNAL FIND NO J USTIFICATION FOR EXTENDING THE PERIOD OF LIMITATION TILL THE HIGH COURT DISPOS ES OF THE APPEAL. THE PARLIAMENT INTENDED TO LIMIT PERIOD OF LIMITATION O NLY FOR SIX MONTHS FROM THE DATE OF RECEIPT OF THE ORDER FROM THE TRIBUNAL. TH EREFORE, WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS OF THE LD.DR THAT THE SAME PRINCIPLE WOULD BE APPLICABLE WHEN THE APPEAL IS PENDING BEFORE THE HI GH COURT. TAXATION 4 IT(SS)A NO.01/COCH/2014 STATUTE HAS TO BE INTERPRETED AS IT IS IN THE STATU TE AND THERE IS NO SCOPE FOR EXTENDING THE PRINCIPLE LAID DOWN UNLESS OTHERWISE IT IS SPECIFICALLY PROVIDED FOR IN THE ACT ITSELF. THEREFORE, THIS TR IBUNAL IS OF THE CONSIDERED OPINION THAT THE ORDER PASSED BY THE ASSESSING OFFI CER IMPOSING PENALTY ON 18-11-2010 IS BARRED BY IMITATION. ACCORDINGLY, TH E ORDERS OF BOTH THE AUTHORITIES BELOW ARE QUASHED AND PENALTY IS DELETE D. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 04 TH AUGUST, 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 04 TH AUGUST, 2014 PK/- COPY TO: 1. U.V. ZUHARA, PALAKKI MEDICALS, MANIKKOTH, KANHAN GAD 2. THE DY.CIT, CIR.1, KANNUR 3. THE COMMISSIONER OF INCOME-TAX, KOZHIKODE 4. THE COMMISSIONER OF INCOME-TAX(A), KOZHIKODE 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH