SAMASTIPUR KSHETRIYA GRAMIN BANK,PATNA V. DCIT, CIRCLE-3, DARBHANGA

ITA 32/PAT/2019

AI Insights

The case involves Samastipur Kshetriya Gramin Bank, which appealed against a penalty imposed by the Deputy Commissioner of Income Tax, Circle-3, Darbhanga, under section 271(1)(c) of the Income-tax Act, 1961. The penalty was initially imposed following an assessment order that disallowed the bank's claims for brought forward losses and deductions under section 80P, which had been withdrawn from the statute effective from the assessment year 2007-08. The bank did not appeal the quantum of the assessment order but contested the penalty on the grounds of it being barred by limitation. The Tribunal agreed with the bank's contention, noting that the penalty was not imposed within the legally required timeframe, leading to the setting aside of the penalty order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775048 (ITAT-PATNA)
• Duration Of Justice: 6 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 28-01-2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: IMPOSING PENALTY OF
• Keywords: Set aside
• Section: 143(3); 271(1)(c)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “PATNA BENCH, PATNA VIRTUAL HEARING AT KOLKATA Before Shri Sonjoy Sarma, Judicial Member and Shri Rakesh Mishra, Accountant Member I.T.A. No.32/Pat/2019 Assessment Year: 2010-11 Samastipur Kshetriya Gramin Bank (merged with Dakshin Bihar Gramin Bank)……………....Appellant C/o Nirmal & Associates, CA, Nepali Kothi, Opp Gasoline Petrol Pump, Boring Road, Patna-800001. [PAN: AAFAS8891R] vs. DCIT, Circle-3, Darbhanga..…..……………..………………….…..... Respondent Appearances by: Shri Nishant Maitin, CA appeared on behalf of the appellant. Smt. Rinku Singh, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : August 21, 2025 Date of pronouncing the order : September 1st, 2025 आदेश / ORDER Per Sonjoy Sarma, Judicial Member: This appeal by the assessee is directed against the order dated 16.10.2018 passed by the Commissioner of Income Tax (Appeals), Jamshedpur under section 250 of the Income-tax Act, 1961. 2. Brief facts of the case are that the assessee is regional rural bank and had filed its return of income declaring Nil income after claiming deduction on account of brought forward losses and deductions u/s 80P of the Act. The deduction u/s 80P was withdrawn from the statute w.e.f Asst Year 2007-08. Accordingly, in the present case of the assessee, assessment was framed by disallowing the claim of brought forward losses and deduction u/s 80P of the Act. Printed from counselvise.com I.T.A. No.32/Pat/2019 Samastipur Kshetriya Gramin Bank 2 3. Against the order passed the Assessing Officer, the assessee did not file any appeal against the quantum order passed by the Assessing Officer. Subsequently, the Assessing Officer initiated penalty u/s 271(1) of the Act and against the order passed u/s 143(3) dated 29.12.2011 and the penalty notice was issued on 05.02.2013 and penalty order was passed on 27.09.2013 against the assessee by imposing penalty of Rs.3,61,64,826/- u/s 271(1)(c) of the Act. 4. Aggrieved by the above order, the assessee preferred an appeal before the Ld. CIT(A). However, CIT(A) dismissed the appeal of the assessee by upholding order of the Assessing Officer. 5. Dissatisfied with the above order assessee is in appeal before this tribunal raising various ground. However, the primary contention of the learned AR is that the penalty was bad in law and is barred by limitation due to the fact that due date for imposing penalty u/s 271(1)(c) of the Act 1st limb states that 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. In the case of the assessee, proceedings completed on 05.02.2013 expiry of F.Y was 31.03.2013 and due date for imposition of penalty 2nd limb 6 months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later. Accordingly, assessment order was passed on 05.02.2013, expiry date of financial year on 31.03.2013 and 31.08.2013 and penalty order was issued on 27.09.2013. Therefore, the imposition of the penalty was bad in law as it exceeded 6 months period for initiation as for the mandates of the law. He therefore prayed that the penalty is barred by limitation as such is liable to be quashed since the assessee did not prefer any appeal against the Printed from counselvise.com I.T.A. No.32/Pat/2019 Samastipur Kshetriya Gramin Bank 3 quantum of appeal order passed u/s 143(3) of the Act dated 29.12.2011. 6. On the other hand, the learned DR supported the order of the authorities below. 7. We have heard both sides and perused the material on record. We find that in the present case, the penalty order was passed on 27.09.2013 however as such the mandates of law of imposition of penalty u/s 271(1)(c) of the Act, it should be passed on or before 31.08.2013. Therefore, the penalty order is barred by limitation. Accordingly, we set aside the penalty order and direct the Assessing Officer to delete the same. 8. In the result, the appeal of the assessee is allowed. Kolkata, the 1st September, 2025. Sd/- Sd/- [Rakesh Mishra] [Sonjoy Sarma] लेखा सदस्य/Accountant Member न्याययक सदस्य/Judicial Member Dated: 01.09.2025. Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3.CIT (A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "