Cellphone Credit and Securities India P. Ltd., New Delhi V. ACIT, New Delhi

ITSSA 7/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4700 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 28-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Period of limitation; Time period of passing order; Set aside
• Section: 246

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER IT(SS)A NO. 7/DEL/2016 BLOCK PERIOD: 01.04.1989 TO 13.01.2000 CELLPHONE CREDIT & SECURITIES INDIA P. LTD. A-60, NARAINA INDI. AREA, NEW DELHI. PAN NO. AAACC4101D VS ACIT CENTRAL CIRCLE 2, NEW DELHI. APPELLANT RESPONDENT ASSESSEE BY SHRI ROHIT JAIN, ADV. MS. DEEPASHREE RAO, CA SHRI VIBHU GUPTA, CA REVENUE BY MS. ASHIMA NEB, SR. DR ORDER PER SHRI N.K. BILLAIYA, A.M. WITH THIS APPEAL THE ASSESSEE HAS CHALLENGED THE CO RRECTNESS OF THE ORDER OF THE CIT(A)-29, NEW DELHI DATED 23.0 3.2016 PERTAINING THE BLOCK PERIOD 01.04.1989 TO 13.01.200 0. THE SUBSTANTIVE GRIEVANCE OF THE ASSESSEE READS AS UNDE R: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, PENALTY ORDER DATED 19.05.2011 LEVYING PENALTY DATE OF HEARING 23.05.2019 DATE OF PRONOUNCEMENT 23.05.2019 2 IT(SS) A NO. 7/DEL/2016 UNDER SECTION 158BFA(2) OF THE INCOME TAX ACT, 1961 IS WITHOUT JURISDICTION, BAD IN LAW AND VOID-AB-INITIO . 1.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, PENALTY ORDER DATED 19.05.2011 HAVING BEEN PASSED BEYOND THE PERIOD OF LIMITATION PRESCRIBED I N TERMS OF CLAUSE (C) OF SUB-SECTION (3) OF SECTION 1 58BFA OF THE ACT, IS ILLEGAL AND BAD IN LAW. 2. THE APPEAL IS BARRED BY LIMITATION BY 30 DAYS. THE ASSESSEE HAS FILED A LETTER REQUESTING THE CONDONATION OF TH E DELAY SUPPORTED BY THE AFFIDAVITS OF THE DIRECTOR AND ALS O THE COUNSEL OF THE ASSESSEE. THE DR STRONGLY OBJECTED TO THE COND ONATION OF THE DELAY BY PLACING RELIANCE ON THE DECISION OF THE CO ORDINATE BENCH IN ITA NO. 5887/DEL/2017. 3. WE HAVE CAREFULLY GONE THROUGH THE CONTENTS OF T HE AFFIDAVITS QUA THE DELAY AND HAVE ALSO CONSIDERED THE DECISION OF THE COORDINATE BENCH RELIED UPON BY THE DR. WE ARE OF THE CONSIDERED VIEW THAT THE FACTS OF THE DECISION RELI ED UPON BY THE DR ARE CLEARLY DISTINGUISHABLE FROM THE FACTS OF TH E APPEAL IN HAND. CONSIDERING THE REASONABLENESS OF THE CAUSE OF THE DELAY, THE DELAY IS CONDONED. 4. COMING TO THE FACTS OF THE CASE, THE QUARREL IS IN RESPECT OF THE IMPOSITION OF THE PENALTY U/S 158BFA(2) OF THE ACT. THE CLAIM OF THE APPELLANT IS THAT THE ORDER IMPOSING PENALTY IS BARRED BY LIMITATION. 5. PER CONTRA, THE DR STRONGLY STATED THAT THE LIMI TATION PERIOD WOULD START FROM THE DATE OF THE ORDER OF THE HONB LE DELHI HIGH COURT AND, THEREFORE, THE PENALTY ORDER IS NOT BARR ED BY LIMITATION. 3 IT(SS) A NO. 7/DEL/2016 6. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW QUA THE ISSUE. 7. FACTS ON RECORD SHOW THAT THE ASSESSMENT ORDER W AS PASSED BY THE AO U/S 158BC READ WITH SECTION 158BD OF THE ACT ON 10.06.2002. THE ASSESSMENT WAS ASSAILED BEFORE THE CIT(A) AND THE CIT(A) CONFIRMED THE ADDITION MADE BY THE AO, V IDE ORDER DATED 14.11.2002. THE ASSESSEE CARRIED THE MATTER BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 03.08.20 07 REVERSED THE ORDER OF THE CIT(A) AND THE ADDITIONS MADE BY T HE AO WERE DELETED. THE REVENUE PREFERRED APPEAL BEFORE THE H ONBLE DELHI HIGH COURT AND THE HONBLE DELHI HIGH COURT VIDE OR DER DATED 29.11.2010 REVERSED THE ORDER OF THE TRIBUNAL AND T HE ORDER OF THE ASSESSING OFFICER WAS RESTORED. 8. THE IMPUGNED PENALTY ORDER FRAMED U/S 158BFA OF THE ACT IS DATED 19.05.2011 AND IN OUR CONSIDERED VIEW, THE SA ME IS BARRED BY LIMITATION IN TERMS OF CLAUSE (C) OF SUB-SECTION (3) OF SECTION 158BFA OF THE ACT. 9. SECTION 158BFA(3)(C) OF THE ACT STIPULATES THAT NO ORDER IMPOSING PENALTY UNDER SECTION 158BFA OF THE ACT SH ALL BE PASSED: (A) 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; OR (B) SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE CIT(A) OR ITAT IS RECEIVED BY THE PR. CCIT/CCIT/CIT; WHICHEVER PERIOD EXPIRES LATER. 4 IT(SS) A NO. 7/DEL/2016 10. A PERUSAL OF THE AFOREMENTIONED PROVISION SHOW S THAT THE PENALTY ORDER U/S 158BFA SHOULD HAVE BEEN PASSED WI THIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH ORDER OF THE TRIBUNAL DATED 03.08.2007 WAS RECEIVED BY THE CONCERNED AUTH ORITY. HOWEVER, IN THE INSTANT CASE, THE PENALTY ORDER IS DATED 19.05.2011, WHICH IN OUR CONSIDERED VIEW IS BEYOND THE LIMITATION PERIOD AS PRESCRIBED IN SECTION 158BFA(3)(C) OF THE ACT. 11. OUR VIEW IS SUPPORTED BY THE DECISION OF THE CO ORDINATE BENCH IN IT(SS)A NO. 4/DEL/2013 ORDER DATED 01.07.2 016 THE RELEVANT FINDINGS OF THE COORDINATE BENCH READ AS U NDER: 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTI ONS. 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. PROVISIONS OF SECTION 158BFA(3)(C) SHALL BE LEVIED IN CASE WHERE THE ASSE SSMENT IS SUBJECT MATTER OF THE APPEAL BEFORE THE TRIBUNAL THEN A) AFTER 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, WHICHEVER 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, THEREFOR E, APPARENTLY THE ORDER IS BARRED BY LIMITATION. THE DECISION RELIED UPON BY THE LD. AR OF COORDINATE BENCH OF AR VIND KR. JAIN VS. ACIT (SUPRA) HAS DECIDED THE ISSUE ON IDEN TICAL 5 IT(SS) A NO. 7/DEL/2016 FACTS AND CIRCUMSTANCES, WHEREIN SUCH ORDER OF PENA LTY 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 TRIBUNA L, THE ORDER WAS POSTED TO THE RESPONDENT ON 18.03.2005 AND COPY OF ORDER 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 COMMISSIONE R AT LEAST BY MARCH, 2005. SECTION 158BFA(3)(C) PROVIDES AS UNDER: 158BFA(3). NO ORDER IS 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) U/S 246 OR SECTION 246A OR AN APPEAL TO THE APPELLATE TRIBUNAL U/S 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 COMMISSIONER (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 MATTER 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 6 IT(SS) A NO. 7/DEL/2016 TRIBUNAL IS RECEIVED BY THE CCIT OR THE CIT, WHICHEVER PERIOD EXPIRES LATER. IN THIS CASE, PENALTY WAS INITIATED BY 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 MA U/S 254(2) OF THE I.T. ACT BEFORE THE TRIBUNAL. THEREFORE, WHEN THE PENALTY PROCEEDINGS WERE INITIATED IN NOVEMBER, 2002, PENALTY SHOULD NOT BE IMPOSED AFTER EXPIRY OF 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 OR THE CIT WHICHEVER IS LATER. THE ORDER OF THE TRIBUNAL IS RECEIVED BY THE COMMISSIONER 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 REQUESTED IN RESPONSE TO THE SHOW CAUSE NOTICE TO KEEP THE PENALTY PROCEEDINGS IN ABEYANCE BECAUSE THE MA WAS PENDING BEFORE THE TRIBUNAL. IT IS ALSO NOTED IN THE IMPUGNED ORDER THAT THE FINAL ORDER OF THE TRIBUNAL IN MA 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 PERIOD OF LIMITATION FOR PASSING THE PENALTY ORDER REFERS TO THE ASSESSMENT WHICH REMAINED SUBJECT MATTER 7 IT(SS) A NO. 7/DEL/2016 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 QUANTUM, 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 MA FILED BY THE ASSESSEE AND DECIDED ON 29.12.2006 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 MA 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 U/S 245H REMAINED IN FORCE AND (III) THE PERIOD DURING WHICH THE PROCEEDINGS 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 ABEYANCE ON FILING THE MA, THE AO SHOULD NOT HAVE WAITED FOR THE RESULT OF MA AND SHOULD HAVE PROCEEDED WITH THE LEVY OF PENALTY IN THE 8 IT(SS) A NO. 7/DEL/2016 MATTER. IF THE AO IS MISGUIDED BY THE ASSESSEE, THE PERIOD OF LIMITATION CANNOT BE EXTENDED UNDER SUCH CIRCUMSTANCES BECAUSE 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 DISCUSSION, 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 THE ASSESSEE. 7. LD. DR DID NOT CONTROVERT THE ABOVE POSITION OF THE LAW AS WELL AS COULD NOT POINT OUT ANY JUDICIAL PRECEDE NT TAKING CONTRARY VIEW. IN VIEW OF THIS WE RESPECTFULLY FOL LOWING THE DECISION OF THE COORDINATE BENCH CITED ABOVE DISMIS S THE APPEAL OF THE REVENUE HOLDING THAT PENALTY ORDER DA TED 19.05.2011 PASSED BY THE ASSESSING OFFICER IS BARRE D 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 DISM ISSED. 12. RESPECTFULLY FOLLOWING THE DECISION OF THE COOR DINATE BENCH THE PENALTY ORDER IS HELD TO BE BARRED BY LIMITATIO N AND, THEREFORE, QUASHED. SINCE, THE PENALTY ORDER HAS BEEN QUASHED BY US. WE DO NOT FIND IT NECESSARY TO DWELL INTO THE MERITS OF T HE CASE. 9 IT(SS) A NO. 7/DEL/2016 13. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23/05/2019 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 23.05.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23.05.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS 23.05.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 23.05.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 23.05.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 23.05.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 23.0 5.2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER 10 IT(SS) A NO. 7/DEL/2016