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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM vk;dj vihy la-@ITA No. 960/JP/2016
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
ITA No. 960&961/JP/2016 ITO vs. Sh. Prashant Sharma
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.”
During the course of scrutiny assessment u/s 143(3) the AO
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
ITA No. 960&961/JP/2016 ITO vs. Sh. Prashant Sharma
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.
ITA No. 960&961/JP/2016 ITO vs. Sh. Prashant Sharma
Before us, the ld. DR has submitted that initiation of penalty
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.
On the other hand, the ld. AR of the assessee has submitted that
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
ITA No. 960&961/JP/2016 ITO vs. Sh. Prashant Sharma
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).
We have considered the rival submission as well as relevant
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
ITA No. 960&961/JP/2016 ITO vs. Sh. Prashant Sharma
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
ITA No. 960&961/JP/2016 ITO vs. Sh. Prashant Sharma
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:-
In the present case, the notice for issuance of the penalty proceedings under Section 271D of the Act for the alleged contravention of provisions of Section 269SS was issued to the assessee, of course by the AO, on 25.03.2003. Even if the matter had otherwise been in appeal before the CIT(A) against the original assessment order and the appeal was decided on 13.02.2004, the same was hardly of relevance so far the penalty proceedings under Section 271D were concerned. As held by this Court in Hissaria Bros. (supra), completion of appellate proceedings arising out of assessment proceedings has no relevance over sustaining such penalty proceedings. As held clearly by this Court, in such a matter, clause (c) of Section 275 (1) would be applicable. Section 275(1)(c) could be noticed as under:- "275. Bar of limitation for imposing penalties. (1) No order imposing a penalty under this Chapter shall be passed- ..... (c) in any other case, 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 action for imposition of penalty is initiated, whichever period expires later." 9. In the present case, the first show cause notice for initiation of proceedings was issued by the AO on 25.03.2003 and was served on the assessee on 27.03.2003. Obviously, the later period also expired on 30.09.2003 when six months expired from the end of the month in which the action for imposing the penalty was initiated. The order as passed by the Joint Commissioner of Income Tax for the penalty under Section 271D on 28.05.2004 was clearly hit by the bar of limitation and has rightly been set aside in the orders impugned. 10. In view of the above, our answer to the formulated question of law is that even when the authority competent to impose penalty under Section 271D was the Joint Commissioner, the period of limitation for the purpose of such penalty proceedings was not to be reckoned form the issue of first show cause by the Joint Commissioner; but the period of limitation was to be reckoned from the date of issue of first show cause for initiation of such penalty proceedings. For the purpose of present case, as observed hereinabove, for the proceedings having been initiated on 25.03.2003, the order passed by the Joint Commissioner under Section 271D on 28.05.2004 was hit by the bar of limitation. The CIT(A) and the Tribunal have, thus, not committed any error in setting aside the order of penalty.
ITA No. 960&961/JP/2016 ITO vs. Sh. Prashant Sharma 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