Appeal details
Counselvise Citation
[2016] 122 COUNSELVISE.COM (IT) 2211 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 3 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
01-07-2016
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
C
Next Hearing Date
02-05-2016
Assessment Year
misc
Appeal Filed On
14-03-2013
Judgement Text
DCIT V INTELL INFOVIN INDIA PRIVATE LIMITED ITA NO IT (SS) A 4/DEL/2013 BLOCK PERIOD 1 - 4 - 1989 TO 31/1/2000 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI I.C.SUDHIR , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER I T (SS) A NO . 4/DEL/2013 (ASSESSMENT YEAR: 01/04/1989 TO 13/01/2000 ) DCIT, CENTRAL CIRCLE - 2, ROOM NO.323, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI VS. INTELL INVOFIN INDIA PVT. LTD., A - 60, NARIANA INDUSTRIAL AREA - I, NEW DELHI, PAN:AAACI2366J (APPELLANT) (RESPONDENT) ASSESSEE BY : SMT. PARAMITA N. BISWAS, CIT DR REVENUE BY: SH. ROHIT JAIN, ADV SH. DEEPASHREE RAO, CA DATE OF HEARING 02/05/2016 DATE OF PRONOUNCEMENT 01 / 0 7 /2016 O R D E R PER PRASHANT MAHARISHI , A . M . 1. THIS IS APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT ( A) - III, NEW DELHI DATED 29.01.2013. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN CANCELLING THE PENALTY OF RS.12,94,682 / - IM POSED BY THE AO U/S 158BFA(2) OF THE INCOME TAX ACT, 1961 IN RESPECT OF THE ADDITION CONFIRMED BY THE HONBLE DELHI HIGH COURT VIDE ORDER DATED 29.11.2010. 2. THE ORDER OF THE CIT ( A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS IN LAW. 3. BRIEF FACTS OF THE CASE ARE THAT SEARCH U/S 132 OF THE ACT WAS CARRIED OUT IN S H YAM TELECOM GROUP CASES ON 13.01.2000. AS IN THE CASE OF THE ASSESSEE THERE WAS NO SEARCH WARRANT, NOTICE U/S 158BC WAS ISSUED ON 06.03.2002 IN RESPONSE TO THAT COMPANY FILED NIL RETURN ON 26.03. 2002. DURING THE COURSE OF SEARCH IT WAS FOUND THAT ASSESSEE HAS EARNED CERTAIN LONG TERM CAPITAL GAIN OF RS. 1990704/ - WHICH WAS NOT SHOWN IN THE RETURN OF INCOME. THIS WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UNDISCLOSED INCOME IN BLOCK ASSESSMEN T. AS THE INCOME WAS NOT DISCLOSED IN THE REGULAR INCOME TAX RETURN, SHOW CAUSE NOTICE WAS ISSUED FOR PENALTY ON THE BASIS OF ASSESSMENT COMPLETED ON 10.06.2002 U/S 158BD. PENALTY PROCEEDINGS U/S [TYPE TEXT] [TYPE TEXT] [TYPE TEXT] 2 158BFA(2) WAS INITIATED. ON QUANTUM LD CIT ( A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. ON SECOND APPEAL PREFERRED BEFORE THE ITAT IN ITA NO. 17/DEL/2003 WHEREIN VIDE ORDER DATED 24.10.2006 APPEAL OF THE ASSESSEE WAS ALLOWED. SUBSEQUENTLY, REVENUE APPROACHED HONBLE HIGH COURT AND HONBLE HIGH COURT VI DE ORDER DATED 29.11.2010 SET ASIDE THE ORDER OF THE TRIBUNAL BY DECIDING THE ISSUE IN FAVOUR OF THE REVENUE. SUBSEQUENTLY, SHOW CAUSE NOTICE DATED 04.04.2011 WAS ISSUED TO ASSESSEE FOR LEVY OF PENALTY AGAINST WHICH THE ASSESSEE SUBMITTED ITS REPLY STATING THAT THERE WAS NEITHER CONCEALMENT OF INCOME NOR FURNISHING INACCURATE PARTICULARS THEREOF. IT WAS FURTHER CONTENDED THAT PENALTY U/S 158BFA IS ALSO NOT AUTOMATIC. HOWEVER, LD ASSESSING OFFICER VIDE ORDER DATED 19.05.2011 LEVIED IT U/S 158BFA(2) OF RS. 1294682/ - . THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A) - III, NEW DELHI WHO VIDE ORDER DATED 29.01.2013 DELETED THE PENALTY. THEREFORE THE REVENUE IS IN APPEAL BEFORE US. 4. THE LD DR BEFORE US SUBMITTED THAT AS ASSESSEE HAS NOT DISCLOSED THIS SU M IN THE ORIGINAL RETURN OF INCOME AND WHERE LD CIT(A) AND HONBLE DELHI HIGH COURT HAS DECIDED THIS ISSUE IN FAVOUR OF THE REVENUE ON QUANTUM THE PENALTY IS LEVIABLE AS ASSESSEE HAS NOT DISCLOSED CAPITAL GAIN ON SALE OF SHARE WHICH CAME TO THE NOTICE OF T HE REVENUE ONLY BECAUSE OF SEARCH. IN VIEW OF THIS HE VEHEMENTLY SUPPORTED THE PENALTY ORDER OF THE LD ASSESSING OFFICER. 5. AGAINST TH IS LD AR INVOKING THE PROVISION OF RULE 27 SUBMITTED THAT THE DATE OF THE ORDER OF THE TRIBUNAL IS 12.10.2006 AND THE DATE OF THE HIGH COURT ORDER IS 29.11.2010 AND PENALTY ORDER IS PASSED ON 19.05.2011 THEREFORE PROVISIONS OF SECTION 158BFA(3)(C) EXTENDS THE PERIOD OF LIMITATION IN THE MATTER OF APPEAL BEFORE THE TRIBUNAL ONLY AND NOT ON APPEAL BEFORE THE HONBLE HIGH COURT . THEREFORE HE SUPPORTED THAT THE PENALTY ORDER IS PASSED BEYOND THE PERIOD OF LIMITATION AS PROVIDED U/S 158BFA(3)(C) OF THE INCOME TAX ACT. HE STATED THAT AS THE DATE OF THE TRIBUNAL ORDER IS 12.10.2006, THE PENALTY SHOULD HAVE BEEN LEVIED WITHIN 6 MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE TRIBUNAL IS RECEIVED WHICH IN ANY CASE IS VIOLATED AS THE PENALTY ORDER IS PASSED ON 19.05.2011. H E RELIED ON THE DECISION OF AGRA BENCH IN CASE OF AR V IND KUMAR JAIN VS. ACIT REPORTED IN 145 ITD 271 F OR THIS PROPOSITION . [TYPE TEXT] [TYPE TEXT] [TYPE TEXT] 3 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. IN THE PRESENT CASE THE ORDER OF THE ITAT IS DATED 24.10.2006 AND THE APPEAL BEFORE THE HONBLE DELHI HIGH COURT WAS FILED IN 2007 IN THE CASE OF THE ASSESSEE VIDE ITA NO. 742/2007, WHICH WAS DECIDED BY THE HONBLE HIGH COURT ON 29.11.2010. P ROVISIONS OF SECTION 158BFA(3)(C) PROVIDES THAT NO ORDER IMPOSING A PENALTY U/S 158BFA(2) SHALL BE LEVIED IN CASE WHERE THE ASSESSMENT IS SUBJECT MATTER OF THE APPEAL BEFORE THE TRIBUNAL THEN A. AFT ER THE EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS IN THE COURSE OF WHICH ACTION FOR IMPOSITION OF PENALTY HAS BEEN INITIATED ARE COMPLETED OR B. SIX MONTH FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE TRIBUNAL IS RECEIVED BY THE COMMISSIONER , WHICH EVER PERIOD EXPIRES LATER. IN THIS CASE THE ORDER OF THE TRIBUNAL IS DATED 12.10.2006 AND PENALTY ORDER IS PASSED ON 19.05.2011, THEREFORE, APPARENTLY THE ORDER IS BARRED BY LIMITATION. THE DECISION RELIED UPON BY THE LD AR OF COORDINATE BENCH OF ARVIND KR. JAIN VS. ACIT (SUPRA) HAS DECIDED THE ISSUE ON IDENTICAL FACTS AND CIRCUMSTANCES , WHEREIN SUCH ORDER OF PENALTY WAS BARRED BY LIMITATION , AS UNDER: - 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE TRIBUNAL DISPOSED OF THE APPEAL OF THE ASSESSEE AND THE DEPARTMENT VIDE ORDER DATED 03.11.2004.AS PER INFORMATION RECEIVED FROM THE OFFICE OF THE TRIBUNAL, THE ORDER WAS POSTED TO THE RESPONDENT ON 18.03.2005 AND COPY OF ORDE R WAS SENT TO THE AO BY HAND. THUS, THE LD. COUNSEL FOR THE ASSESSEE RIGHTLY CONTENDED THAT THE IMPUGNED ORDER MUST HAVE BEEN RECEIVED IN THE OFFICE OF THE COMMISSIONER AT LEAST BY MARCH, 2005. SECTION 158BFA(3)(C) PROVIDES AS UNDER : '158BFA (3). NO ORDER IMPOSING A PENALTY UNDER SUB - SECTION (2) SHALL BE MADE, ( A ) TO ( B )** ** ** ( C ) IN A CASE WHERE THE ASSESSMENT IS THE SUBJECT - MATTER OF AN APPEAL TO THE COMMISSIONER (APPEALS) UNDER SECTION 246 OR SECTION 246A OR AN APPEAL TO THE APPELLATE TRIBUNAL UNDER SECTION 253, AFTER THE EXPIRY OF THE FINANCIAL 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 END OF THE MONTH IN WHICH THE ORDER OF THE COMMISSIONE R (APPEALS) OR, AS THE CASE MAY BE, THE APPELLATE TRIBUNAL IS RECEIVED BY THE CHIEF COMMISSIONER OR THE COMMISSIONER, WHICHEVER PERIOD EXPIRES LATER' ACCORDING TO THE ABOVE PROVISION, NO ORDER IMPOSING PENALTY SHALL BE MADE WHERE ASSESSMENT IS SUBJECT MATT ER OF AN APPEAL TO THE APPELLATE TRIBUNAL U/S. 253 AFTER EXPIRY OF FINANCIAL YEAR IN WHICH THE PROCEEDINGS IN THE COURSE OF WHICH ACTION FOR IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE COMMISSIONER (APPEALS) OR THE APPELLATE TRIBUNAL IS RECEIVED BY THE CCIT OR THE CIT, WHICHEVER PERIOD EXPIRES LATER. IN THIS CASE, PENALTY WAS INITIATED BY [TYPE TEXT] [TYPE TEXT] [TYPE TEXT] 4 THE AO INITIALLY ON 29.11.2002 AND THEREAFTER ON 08.12.2005 AS PER THE FACTS MENTIONED IN THE PENALTY ORDER. HOWEVER, PROCEEDINGS WERE KEPT IN ABEYANCE BECAUSE THE ASSESSEE FILED M.A. U/S. 254(2) OF THE IT ACT BEFORE THE TRIBUNAL. THEREFORE, WHEN THE PENALTY PROCEEDINGS WERE INITIATED IN NOVEMBER, 2002, PENALTY SHOULD NOT BE IMPOSED AFTER EXPIRY O F THE FINANCIAL YEAR, IN WHICH ACTION FOR IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED. I.E., BY MARCH, 2003 AND THE SECOND PROVISO FURTHER PROVIDES OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE TRIBUNAL IS RECEIVED BY CCIT O R THE CIT WHICHEVER IS LATER. THE ORDER OF THE TRIBUNAL IS RECEIVED BY THE COMMISSIONER BY MARCH, 2005, THEREFORE, PENALTY COULD HAVE BEEN LEVIED WITHIN FURTHER SIX MONTHS, I.E., UPTO THE MONTH OF SEPTEMBER, 2005. HOWEVER, THE PENALTY ORDER IS PASSED ON 28 .08.2007 AND AS SUCH, IT WAS PASSED BEYOND THE PERIOD OF LIMITATION AS PROVIDED U/S. 158BFA(3)(C) OF THE IT ACT. THE AO AND THE LD. CIT(A) HAVE, HOWEVER, NOTED IN THE IMPUGNED ORDERS THAT WHEN PENALTY PROCEEDINGS WERE INITIATED, THE ASSESSEE HIMSELF REQUES TED IN RESPONSE TO THE SHOW CAUSE NOTICE TO KEEP THE PENALTY PROCEEDINGS IN ABEYANCE BECAUSE THE M.A. WAS PENDING BEFORE THE TRIBUNAL. IT IS ALSO NOTED IN THE IMPUGNED ORDER THAT THE FINAL ORDER OF THE TRIBUNAL IN M.A. WAS RECEIVED BY THE CONCERNED CIT ON 02.07.2007. THEREFORE, PENALTY ORDER PASSED ON 28.08.2007 IS PASSED WITHIN THE PERIOD OF LIMITATION PROVIDED UNDER THE ABOVE PROVISIONS. WE DO NOT AGREE WITH THE FINDINGS OF THE AUTHORITIES BELOW IN THIS REGARD. SECTION 158BFA(3)(C) WITH REGARD TO THE PERI OD OF LIMITATION FOR PASSING THE PENALTY ORDER REFERS TO THE ASSESSMENT WHICH REMAINED SUBJECT MATTER OF APPEAL BEFORE THE TRIBUNAL U/S. 253 OF THE IT ACT, I.E., THE MAIN APPEAL FILED BY THE ASSESSEE CHALLENGING THE QUANTUM ADDITION. THE SAID ORDER ON QUAN TUM, WHICH WAS SUBJECT MATTER OF APPEAL WAS PASSED ON 03.11.2004. THERE IS NO REFERENCE OF SECTION 254(2) OF THE IT ACT IN THE ABOVE PROVISION FOR EXTENDING PERIOD OF LIMITATION FOR PASSING THE PENALTY ORDER. THE M.A. FILED BY THE ASSESSEE AND DECIDED ON 2 9.12.2006 FALLS IN THE PROVISIONS OF SECTION 254(2) OF THE IT ACT AND HAS NO CONCERN WITH THE MAIN APPEAL FILED U/S. 253 OF THE IT ACT. SINCE, THERE IS NO REFERENCE OF ANY ORDER PASSED U/S. 254 (2) IN THE PROVISIONS OF SECTION 158BFA (3)(C), THEREFORE, THE AUTHORITIES BELOW HAVE WRONGLY CONSIDERED THE ISSUE FOR THE PURPOSE OF CALCULATING THE PERIOD OF LIMITATION. FURTHER, IT IS NOTED IN THE IMPUGNED ORDERS THAT SINCE THE ASSESSEE REQUESTED IN RESPONSE TO THE SHOW CAUSE NOTICE THAT PENALTY PROCEEDINGS MAY BE KEPT IN ABEYANCE, AS THE ASSESSEE IS FILING M.A. U/S. 254(2) OF THE IT ACT, THEREFORE, THE LIMITATION PERIOD WOULD BE EXTENDED. THE EXPLANATION TO SECTION 158BFA(3) IS INSERTED, WHICH PROVIDES THAT IN COMPUTING THE PERIOD OF LIMITATION FOR THE PURPOSE OF THIS SECTION, (I) THE TIME TAKEN IN GIVING AN OPPORTUNITY TO THE ASSESSEE TO BE REHEARD UNDER THE PROVISO TO SECTION 129, (II) THE PERIOD DURING WHICH THE IMMUNITY GRANTED UNDER SECTION 245H REMAINED IN FORCE AND (III) THE PERIOD DURING WHICH THE PROCEEDIN GS UNDER SUB - SECTION (2) ARE STAYED BY AN ORDER OR INJUNCTION OF ANY COURT, SHALL BE EXCLUDED. NONE OF THE ABOVE CLAUSES ARE APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE. MERELY BECAUSE THE ASSESSEE HIMSELF STATED THAT PROCEEDINGS MAY BE KEPT IN ABE YANCE ON FILING THE M.A., THE AO SHOULD NOT HAVE WAITED FOR THE RESULT OF M.A. AND SHOULD HAVE PROCEEDED WITH THE LEVY OF PENALTY IN THE MATTER. IF THE AO IS MISGUIDED BY THE ASSESSEE, THE PERIOD OF LIMITATION CANNOT BE EXTENDED UNDER SUCH CIRCUMSTANCES BE CAUSE THERE IS NO PROVISION IN LAW TO TAKE CARE OF SUCH SITUATION. THE AUTHORITIES BELOW, THEREFORE, WRONGLY COMPUTED THE PERIOD OF LIMITATION FROM THE DATE OF THE ORDER RECEIVED ON PASSING THE ORDER ON MISCELLANEOUS APPLICATION. CONSIDERING THE ABOVE DISC USSION, WE ARE OF THE VIEW THAT THE PENALTY ORDER DATED 28.08.2007 IS CLEARLY PASSED AFTER THE PERIOD OF LIMITATION AS AGAINST THE PROVISIONS OF SECTION 158BFA(3)(C) OF THE IT ACT. WE ACCORDINGLY HOLD THE PENALTY ORDER SO PASSED IS TIME BARRED. RESULTANTLY , NO PENALTY COULD BE LEVIED AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE, THERE IS NO NEED TO CONSIDER THE LEVY OF PENALTY ON MERITS. WE, THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW LEVYING AND CONFIRMING THE PENALTY, AND ALLOW THE APPEAL OF TH E ASSESSEE. [TYPE TEXT] [TYPE TEXT] [TYPE TEXT] 5 7. LD DR DID NOT CONTROVERT THE ABOVE POSITION OF THE LAW AS WELL AS COULD NOT POINT OUT ANY OTHER JUDICIAL PRECEDENT TAKING CONTRARY VIEW. IN VIEW OF THIS WE RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH CITED ABOVE DISMISS THE APPEAL OF THE RE VENUE HOLDING THAT PENALTY ORDER DATED 19.05.2011 PASSED BY THE ASSESSING OFFICER IS BARRED BY LIMITATION ACCORDING TO PROVISION OF SECTION 158BFA(3)(C) OF THE INCOME TAX ACT. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01 / 0 7 /2016 . - SD/ - - SD/ - (I.C.SUDHIR ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 01 / 07 / 2016 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI
