ITO, JAIPUR vs. PRASHANT SHARMA, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh Hkkxpan] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM vk;dj vihy la-@ITA No. 960/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2009-10 cuke Income Tax Officer, Shri Prashant Sharma, Vs. Ward-4(4), A-34, Nehru Nagar, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AFEPS4515D vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 961/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2009-10 cuke Income Tax Officer, Shri Prashant Sharma, Vs. Ward-4(4), A-34, Nehru Nagar, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AFEPS4515D vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri V.K. Jain (C.A.) jktLo dh vksj ls@ Revenue by : Shri Vrindera Mehta (CIT) lquokbZ dh rkjh[k@ Date of Hearing : 16/10/2017 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 15/11/2017

vkns'k@ ORDER

PER: VIJAY PAL RAO, J.M.

These two appeals by the Revenue against two separate orders by the CIT(A) both dated 16.08.2016 arising from the penalty orders passed u/s 271D and 271E for the A.Y. 2009-10. The Revenue has raised the following grounds as under:- In ITA No. 960/JP/2016 “1. Whether on the facts and in the circumstances of the case and in law, ld. CIT(Appeals) has erred in deleting the penalty of Rs. 1,48,22,585/- imposed u/s 271D as the loan/deposits were accepted/received in cash by the assessee? 2. The appellant craves its rights to add, amend or alter any of the grounds on or before the hearing.”

In ITA No. 961/JP/2016 “1. Whether on the facts and in the circumstances of the case and in law, ld. CIT(Appeals) has erred in deleting the penalty of Rs. 1,17,04,411/- imposed u/s 271E as the loan/deposits were repaid in cash by the assessee? 2. The appellant craves its rights to add, amend or alter any of the grounds on or before the hearing.”

noticed that the assessee has received cash on various dates in person

as well as in bank account and subsequently paid the amount in cash to

M/s MPPL which is in contravention of the provisions of section 269SS

and 269T of the Act. The AO called certain information from M/s MPPL,

in response to which, the company had submitted that the assessee is

having imprest account in the books of the company. The AO found

that there was opening cash balance of Rs. 19,85,495/- on 01.04.2008

in the hands of the assessee and during the period the assessee has 2 also received cash amounting to Rs. 1,48,22,585/- on various dates, the

closing balance as on 31. 03.2009 was at Rs. 51,03,669/-. Since the

assesse has received substantial amount in cash and also paid a

substantial amount in cash, therefore, the AO initiated the penalty u/s

271D as well as 271E of the Act. The assessee raised objections before

the AO including the issue of limitation that the limitation for passing

the penalty order u/s 271D and 271E would reckon from the date when

the show cause notice was issued by the AO and not from the date

when the show cause notice was issued by the Joint Commissioner who

is competent to pass the penalty orders. The AO after considering the

facts and circumstances of the case rejected the contention of the

assessee and passed the orders of levy of penalty u/s 271D as well as

271E of the Act. The assessee challenged the action of the AO before

the CIT(A) and raised the issue of validity of the impugned orders

passed by the Joint Commissioner u/s 271D and 271E being barred by

limitation as provided u/s 275 of the Act. The ld. CIT(A) held that the

orders passed by the Joint Commissioner u/s 271D and 271E are

beyond 6 months from the date of initiation of the penalty proceedings

vide first show cause notice issued by the AO and accordingly the ld.

CIT(A) set aside the penalty orders passed u/s 271D and 271E.

proceedings u/s 271D and 271E would be reckoned by the notice issued

by Joint CIT who is competent to levy of penalty therefore, any notice

issued by the Assessing officer who is not competent to proceed with

the penalty proceedings u/s 271D and 271E of the Act will be

inconsequential for the purpose of deciding the limitation. Thus the ld.

DR has contended that the ld. CIT(A) committed an error by computing

the limitation for the purpose of passing the order u/s 271D and 271E

of the Act from the date of the notice issued by the AO instead of the

date of the notice issued by the JCIT. He has relied upon the decision of

Hon’ble Kerala High Court in case of Grihlaxmi vision Vs. CIT 379 ITR

100 and submitted that the Hon’ble High Court has held that the

penalty proceedings under the provisions of section 271D and 271E are

initiated by the Joint commissioner.

the ITO issued a notice dated 30.12.2011 u/s 274 for levy of penalty

u/s 271D and 271E and thereafter when the matter was transferred to

the J.CIT an another show cause notice was issued by the ACIT on

10.09.2012. Finally the impugned orders u/s 271D and 271E were

passed on 25.03.2013 which are beyond the limitation provided u/s 4 275(1)(c) of the act. He has relied upon the decision of Hon’ble

jurisdiction High Court in case of CIT vs. Jitendra Singh Rathore 352

ITR 327. Thus the ld. AR has contended that the ld. CIT(A) has followed

the decision of the Hon’ble jurisdiction High Court and therefore no fault

cannot be found in the impugned orders of the CIT(A).

material on record. There is no dispute that there are two show cause

notices issued u/s 274 of the Act for initiation of penalty u/s 271D and

271E of the Act. The first show cause notice was issued by the ITO on

30.12.2011 at the time of completion of the assessment and the second

show cause notice was issued thereafter by the additional/Joint

Commissioner on 10.09.2012. The assessee has raised the question of

validity of the orders passed u/s 271D and 271E being barred by

limitation as these orders dated 25.03.2013 as per the assessees were

beyond the period of 6 months from the date of the first show cause

notice dated 30.11.2011 the limitation as provided u/s 275(1)(c) of the

Act. So far as the fact of issuing two show cause notices one by the ITO

on 30.12.2011 and another by the Additional/Joint Commissioner on

10.09.2012, the same is not disputed by the Revenue. Therefore

question arises whether the limitation for the purpose of levy of penalty 5 u/s 271D and 271E would reckon from the date of show cause notice

issued by the ITO. Though he was not competent the passed the order

u/s 271D and 271E or from the date on which the show cause notice

issued by the Additional/Joint Commissioner on 10.09.2012. The ld. AR

has placed reliance on the decision of the Hon’ble jurisdiction High

Court in case of CIT vs. Jitendra Singh Rathore (supra) where as the

ld. DR has relied upon the decision of Hon’ble Kerala High Court in case

of Girhlaxmi Vs. AIT (supra). We find that there are divergent view on

this point of reckoning of limitation from the date of issuing the notice

by the ITO or by the JCIT. The Hon’ble jurisdiction High Court has taken

a view that even though the AO was not competent to pass order u/s

271D and 271E the limitation would reckon from the date of show

cause notice was issued by the AO whereas, the Hon’ble Kerala High

Court held that the proceedings for levy of penalty u/s 271D and 271E

are initiated with issuance of notice by Joint Commissioner and not by

the Assessing Officer. Therefore the Hon’ble Kerala High Court held that

the limitation would reckon from the date of the show cause notice

issues by the Joint Commissioner. Thus it is clear that two different

High Courts have taken the views contrary to each other however, for

the Jaipur Benches of this Tribunal the decision of the jurisdiction High Court is binding precedent. The Hon’ble High Court in case of CIT Vs.

Jitendra Singh Rathore (supra) has held in para 8 to 10 as under:-

We further note that the Hon’ble jurisdiction High Court has reiterated

this view in case of CIT Vs. Banshi Lal Rathi vide order dated

17.05.2013 ITA No. 119 of 2011 following the decision in case of CIT

Vs Jitendra Singh Rathore respectively following the decision of Hon’ble

jurisdiction High Court. We do not find any reason to interfere with the

impugned orders by the ld. CIT(A).

In the result, the appeals of the revenues are dismissed

Order pronounced in the open court on 15/11/2017 Sd/- Sd/- ¼Hkkxpan ½ ¼fot; iky jko½ (Bhagchand) (Vijay Pal Rao) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member

Tk;iqj@Jaipur fnukad@Dated:- 15/11/2017. *Santosh. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- The ITO), Ward-4(4), Jaipur. 1. izR;FkhZ@ The Respondent- Shri Prashant Sharma, A-34, Nehru 2. Nagar, Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 5. xkMZ QkbZy@ Guard File {ITA No. 960&961/JP/2016} 6. vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत 8