NEELAM PREMCHAND RAKA,,SOLAPUR vs. INCOME-TAX OFFICER, WARD - 1 (1),, SOLAPUR

आदेश / ORDER

PER R.S.SYAL, VP :

These seven appeals by different but connected assessees

relating to assessment year 1992-93, involve a common issue. We

are, therefore, proceeding to dispose them off by this consolidated

order for the sake of convenience.

by the Tribunal was subsequently recalled vide its order dated 08-

07-2008 in M.A.No.39/PN/2008 for disposal of the following

ground:

“The ld. CIT(A)-III, Pune has erred in coming to the conclusion that penalty order of the AO passed u/s.271(1)(c) of the Act is legal, not bad in law and thus time limit prescribed u/s.275 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’).”

Padamchand Raka are that the Tribunal passed the quantum order

in respect of these seven assesses on 13-11-2002 in ITA

No.1084/PN/2001 etc. The AO passed penalty order on

30-09-2003 upholding penalty of Rs.49,831/-. The assessee

contended before the AO that the order dated 13-11-2002 passed

by the Tribunal in quantum proceedings was received by the

4 ITA Nos.737 to 743/PUN/2004 Ekata P. Raka and others

Commissioner on 13-12-2002. Relying on the provisions of

section 275(1)(a) of the Income-tax Act, 1961 (hereinafter also

called `the Act’), the assessee contended that penalty order could

not be passed as having become time-barred. The AO vide Para 6

of his penalty order observed that the order of the ITAT was

received by CIT-IV, Pune on 13-05-2003, which was, in turn,

received by him on 14-05-2003 and hence, the penalty order was

not time-barred. No relief was allowed in the first appeal. The

assessee has approached the Tribunal contending that the penalty

order passed by the AO was time-barred.

material on record. Relevant part of section 275 containing bar of

limitation for imposing penalties, reads as under: -

5 ITA Nos.737 to 743/PUN/2004 Ekata P. Raka and others

imposing penalty under this Chapter shall be passed in a case

where the relevant assessment year is subject matter of appeal

before the Tribunal, after the expiry of the financial year in which

the proceedings in the course of which action for imposing penalty

has been initiated, are completed, or six months from the end of the

month in which the order of the Tribunal is received by the

Principal Commissioner, whichever period expires later. It is a case

where the penalty order was passed after the expiry of the financial

year in which the assessment order was passed, which aspect is not

under dispute. The entire controversy rotates around the second

limb of section 275(1)(a) which gives a period of six months from

the end of the month in which the order of Tribunal is received by

the competent Commissioner. The Tribunal passed quantum order

on 13-11-2002. The case of the assessee is that the order of

Tribunal was received by the Commissioner, Kolhapur, under

whose jurisdiction the AO imposing penalty falls, on 13-12-2002.

Since the penalty order was passed on 30-09-2003, which is

beyond a period of six months from the end of December, 2002,

the proceedings became time-barred. On the other hand, the AO

has made out a case that the Tribunal order was received by the

6 ITA Nos.737 to 743/PUN/2004 Ekata P. Raka and others

office of CIT-IV, Pune on 13-05-2003. Going by that, the penalty

order passed on 30-09-2003 was within a period of six months

from the end of May, 2013.

Tribunal was served on the competent Commissioner. In this

regard, the assessee has placed on record a letter dated 18-03-2004

issued by the Assistant Registrar, ITAT, Pune stating as under :

“Kindly refer to your letter dated 09-03-2004 in relation to ITA Nos. 1022 to 1029/2001 decided on 13-11-2002.

Registrar, ITAT, Pune that the quantum order passed by the

Tribunal on 13-11-2002 was served on the jurisdictional CIT,

Kolhapur on 13-12-2002 as per the acknowledgement received

from the office of CIT, Kolhapur. It can be seen from the quantum

order passed by the Tribunal that a copy of the order was directed

to be forwarded to CIT, Kolhapur. It is not understandable as to

how the AO has brought in focus the date of service of the

quantum order passed by the Tribunal on CIT-IV, Pune on

7 ITA Nos.737 to 743/PUN/2004 Ekata P. Raka and others

13-05-2003. The ld. AR submitted that the Department changed

the jurisdiction of the Commissioners of Income-tax and it was

possible that the office of CIT, Kolhapur who had the original

jurisdiction over the ITO, Ward-1, Solapur, who imposed the

penalty, underwent change and the Tribunal order dated 13-11-

2002 might have been sent by the CIT Kolhapur to CIT-IV, Pune

on 13-05-2003. The ld. DR did not deny this fact. In our

considered opinion, the internal transfer of documents including

the Tribunal order from the office of CIT, Kolhapur to CIT-IV,

Pune, cannot have any bearing on the determination of the date on

which the order of Tribunal was served on the competent

Commissioner having jurisdiction over the case at the material

time. It has been further brought to our notice that the ITO Ward

1(1), Solapur issued notice for penalty u/s 271(1)(c) of the Act on

4.4.2003 fixing the date of hearing on 17.4.2003, which is prior to

13.05.2003, being the date of the alleged service of the order of the

Tribunal on the competent CIT. As the CIT, Kolhapur had the

jurisdiction over the AO and the order of Tribunal was served on

CIT, Kolhapur, on 13.12.2002, in our considered opinion, the

limitation period has to be reckoned from the date of such service.

Going by this date of service of order of Tribunal on CIT,

8 ITA Nos.737 to 743/PUN/2004 Ekata P. Raka and others

Kolhapur, we hold that the penalty order passed by the AO on

30-09-2003 is time-barred.

circumstances of other six appeals are similar to that of Ekata P.

Raka. Following the view taken hereinabove, we hold that the

penalty orders passed on these six persons were also time-barred.

issue. Order pronounced in the Open Court on 27th February, 2019.

Sd/- Sd/- (VIKAS AWASTHY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; �दनांक Dated : 27th February, 2019 सतीश

9 ITA Nos.737 to 743/PUN/2004 Ekata P. Raka and others

आदेश क� क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to: अ�ेिषत आदेश आदेश आदेश 1. अपीलाथ� / The Appellant; 2. ��यथ� / The Respondent; 3. The CIT(A)-III, Pune

आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

Date 1. Draft dictated on 26-02-2019 Sr.PS 2. Draft placed before author 27-02-2019 Sr.PS 3. Draft proposed & placed JM before the second member 4. Draft discussed/approved JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *