The Asstt. Commissioner of Income Tax, Circle-1(1)(2), Baroda V. Esskay Pharmaceuticals Ltd., Ahmedabad

MA 78/AHD/2017

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 5544 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 1995-1996
• Appeal Filed On: 01-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation; Tax effect; Revised return
• Section: 271(1)(c)

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH C BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER MISC. APPLICATION NO.78/AHD/2017 IN ITA NO.2787/AHD/2011 / ASSTT.YEAR : 1995-96 DCIT, CIR.1(1)( 2 ) VADODARA. VS. M/S.ESSKAY PHARMACEUTICALS LTD. OFFICIAL LIQUIDATOR JIVABHAI CHAMBERS ASHRAM ROAD AHMEDABAD. PAN : AACCE 0899 C ( APPLICANT ) ( RESPONENT ) REVENUE BY : SHRI JAMES KURIAN, SR.DR ASSESSEE BY : NONE / DATE OF HEARING : 04/10/2019 / DATE OF PRONOUNCEMENT: 10/10/2019 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: PRESENT MA IS DIRECTED AT THE INSTANCE OF THE REVEN UE POINTING OUT APPARENT ERROR IN THE ORDER OF THE TRIBUNAL DAT ED 8.2.2016 PASSED IN ITA NO.2787/AHD/2011 FOR THE ASSTT.YEAR 1995-96 2. ACCORDING TO THE REVENUE, THE CIT(A) HAS CONFIR MED PENALTY AMOUNTING TO RS.40,56,375/- IMPOSED UNDER SECTION 2 71(1)(C) OF THE INCOME TAX ACT. THE TRIBUNAL HAS DELETED THIS PENA LTY BY RECORDING THE FOLLOWING FINDING: 5. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE, AT THE VERY OUTSET SUBMITTED THAT THE PENALTY ORDER WAS TIME BA RRED. THOUGH THE ASSESSEE FAILED TO TAKE THIS PLEA BEFORE THE CI T(A), BUT BEING MA NO.78/AHD/2017 2 A LEGAL PLEA, IT CAN BE RAISED AT ANY STAGE. IN OR DER TO BUTTRESS HIS ARGUMENT THAT THE PENALTY ORDER IS TIME BARRED, THE LD.COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD, THE DETAILS IN T ABULAR FORM. IT READS AS UNDER: PARTICULARS DATE ORIGINAL RETURN FILED ON 30.11.1995 FIRST REVISED RETURN FILED BY THE ASSESSEE ON 24.01 .1996 SURVEY U/S.133A CARRIED OUT ON 3.01.1997 SECOND REVISED RETURN WAS FILED ON 29.01.1997 ASSESSMENT ORDER U/S.143(3) WAS PASSED ON 31.3.1997 CIT(A) ORDER WAS PASSED ON 15.07.1997 ORDER GIVING EFFECT TO CIT(A) ORDER PASSED BY THE AO ON 29.09.1999 PENALTY ORDER U/S.271(1)(C) WAS REQUIRED TO BE PASSED BY SECTION 275(1)(A) 31.03.2000 PENALTY U/S.271(1)(C) WAS PASSED ON 30.07.2002 6. THE LD.COUNSEL FOR THE ASSESSEE TOOK US THROUGH SECTION 275 OF THE INCOME TAX ACT, WHICH PROVIDES THE PERIOD OF LIMITATION FOR PASSING A PENALTY UNDER ORDER SECTION 271(1)(C) OF THE ACT. ACCORDING THE LD.COUNSEL FOR THE ASSESSEE, SUB-SECT ION (1) OF SECTION 275 OF THE ACT CONTEMPLATES THAT THE ORDER OF THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT CAN BE PASSED IN A SITUATION WHERE THE RELEVANT ASSESSMENT ORDER OR OTHER ORDER IS THE SUBJECT MATTER OF APPEAL TO THE CIT(A) OR ITAT, WITHIN A PE RIOD BEFORE EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDIN GS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS B EEN INITIATED, ARE COMPLETED, OR SIX MONTHS FROM THE END OF THE MO NTH IN WHICH THE ORDER OF THE CIT(A) OR THE TRIBUNAL IS RECEIVED BY THE CHIEF COMMISSIONER OF THE COMMISSIONER WHICHEVER PERIOD I S LATER. HE POINTED OUT THAT PROCEEDINGS IN THIS CASE WERE FINA LIZED ON 15.7.1997 WHEN THE CIT(A) HAS PASSED THE ORDER. TH IS ORDER WAS NOT CHALLENGED IN FURTHER APPEAL. THE AO HAS GIVEN EFFECT TO THE ORDER OF THE CIT(A) ON 29.9.1999. THE PENALTY PROC EEDINGS WERE INITIATED ON 31.3.1997. THE PENALTY ORDER HAS BEEN PASSED ON 30.7.2002. ACCORDING TO THE LD.COUNSEL FOR THE ASS ESSEE, THE PENALTY ORDER OUGHT TO HAVE BEEN PASSED BEFORE THE END OF THE FINANCIAL YEAR 31.3.2000 I.E. DATE OF 29.9.1999 FAL LS IN THIS FINANCIAL YEAR OR THIS ORDER SHOULD HAVE BEEN PASSE D WITHIN SIX MONTHS FROM THE RECEIPT OF THE ORDER OF THE CIT(A) BY THE COMMISSIONER OR THE CHIEF COMMISSIONER. THIS ORDER , ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE, MUST HAVE BEEN RECEIVED BEFORE 29.9.1999, BECAUSE ON THIS DATE, EFFECT HAS BEEN GIVEN TO THE ORDER OF THE CIT(A) BY THE AO. IN ORDER TO BUT TRESS THE AUTHENTICITY OF THESE DATES, HE MADE REFERENCE TO T HE PENALTY ORDER, WHERE THE AO HAS RECORDED THESE DATES. MA NO.78/AHD/2017 3 7. ON THE OTHER HAND, THE LD.DR CONTENDED THAT AT T HIS STAGE HE IS NOT IN A POSITION TO MAKE CATEGORICAL STATEME NT ABOUT THESE DATES. THE ORDER OF THE CIT(A) MIGHT HAVE BEEN REC EIVED IN THE OFFICE OF THE CHIEF COMMISSIONER OR THE COMMISSIONE R SUBSEQUENT TO THESE DATES. THEREFORE, SUBJECT TO THE VERIFICA TION OF THE DATES, THE APPEAL OUGHT TO BE DISPOSED OF. 8. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. ON PERUSAL OF SECTION 275 OF THE INCOME TAX ACT, IT REVEALS THAT THE PENALTY ORDER UNDER SECTIO N 271(1)(C) OF THE ACT OUGHT TO BE PASSED BEFORE THE EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH, A CTION FOR IMPOSITION OF PENALTY HAS BEEN INITIATED ARE COMPLE TED, OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH ORDER OF THE CIT(A) OR THE TRIBUNAL IS RECEIVED BY THE CHIEF COMMISSIONER OR THE CIT. IN OTHER WORDS, IN THE PRESENT CASE, THE PROCEEDINGS G IVEN RISE TO THE PENALTY WERE COMPLETED ON 15.7.1997 WHEN THE CI T(A) HAS PASSED THE ORDER. THIS ORDER HAS BEEN GIVEN EFFECT ON 29.9.1999. MEANING THEREBY, THE ORDER MUST HAVE BEEN RECEIVED BY THE AUTHORITIES. THE TIME LIMIT TO PASS THE PENALTY OR DER IN THIS CASE WAS BEFORE 31.3.2000, BECAUSE THE DATE OF 29.9.1999 FALLS WITHIN THE FINANCIAL YEAR STARTED FROM 1.4.1999 AND ENDS O N 31.3.2000. OTHER TIME LIMIT COULD BE SIX MONTHS FROM THE DATE OF RECEIPT OF THE ORDER, THAT HAS ALSO EXPIRED. EVEN FOR ABUNDAN T PRECAUTION, WE OBSERVE THAT IN CASE ON RE-VERIFICATION AT THE E ND OF THE A|O IT EMERGES OUT THAT THE PENALTY IS WITHIN THE LIMITATI ON AND THERE IS SOME COMMUNICATION GAP BETWEEN MENTIONING OF THESE DATES, THEN, THE REVENUE WILL BE AT LIBERTY TO APPROACH TH E TRIBUNAL TO RECALL THIS ORDER. SUCH AN APPLICATION SHOULD BE F ILED WITHIN THE TIME LIMIT AVAILABLE UNDER THE INCOME TAX ACT. WIT H THE ABOVE REMARKS, THE APPEAL OF THE ASSESSEE IS ALLOWED AND PENALTY IS DELETED. 3. IN THE MA REVENUE HAS PLEADED AS UNDER: IT IS SUBMITTED THAT IN THE ORDER ITA NO. 2787/AHD /2011 DTD 07.12.2016 OF THE ITAT, AHMEDABAD 'C BENCH' HAS DIS MISSED THE REVENUE APPEAL. 2. THE AFORESAID DECISION OF THE HONBLE ITAT MAY K INDLY BE RECONSIDERED SINCE THE HONBLE ITAT, AHMADABAD ERRE D IN DISMISSING THE APPEAL OF THE REVENUE WITHOUT CONSID ERING THE FACT THAT THE TAX EFFECT IS OF RS. 40,56,375/- WHICH IS ABOVE THE PRESCRIBED MONETARY LIMIT FOR FILING APPEAL, AS PER BOARD'S CI RCULAR NO.21/2015 DATED 10.12.2015. MA NO.78/AHD/2017 4 3. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE ITAT DECISION MAY KINDLY BE RECONSIDERED AND ACCORDINGLY , MISCELLANEOUS APPLICATION TO THE ITAT, AHMEDABAD IS FILED. 4. A PERUSAL OF THE ABOVE WOULD INDICATE THAT THE T RIBUNAL HAS NOT DISMISSED THE APPEAL OF THE REVENUE, RATHER IT HAS ALLOWED THE APPEAL OF THE ASSESSEE ON MERIT. NO ISSUE REGARDING LOW TAX EFFE CT WAS INVOLVED. THEREFORE, THE APPLICATION FILED BY THE REVENUE IS MISCONCEIVED. ACCORDINGLY, IT IS DISMISSED. 5. IN THE RESULT, MA OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE COURT ON 10 TH OCTOBER, 2019 AT AHMEDABAD. S D / - (AMARJIT SINGH) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) JUDICIAL MEMBER