DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, JAIPURQ, JAIPUR vs. JUGAL KISHORE GARG ALIAS SH. JUGAL KISHORE DEREWALA, JAIPUR

Learned CIT(A) relied on decision by Hon’ble Apex Court in the case of Hissaria Brothers, 386 ITR 719-(2016) 74 taxmann.com 22, the ratio decidendi of which is that relevant date for determining the limitation period is the date of passing of the assessment order.

Applying the above said decision, Learned CIT(A) observed that herein the assessment orders having been passed on 29.03.2024, the order of penalties u/s 271D and E could be passed by 30.09.2024, the orders of penalty having been passed on 23.12.2024, were barred by limitation. Consequently, the penalties imposed on the assessee were deleted.

Learned AR for the assessee-respondent herein has submitted that in the case titled of Commissioner of Income Tax vs. Hissaria Brothers, (2007) 291 ITR 244 (Rajasthan), our own Hon’ble High Court had dealt with the issue of limitation and Hon’ble Apex Court upheld said decision. to 1320/JP Sh. Jugal Kishore Garg alias Sh. Jugal Kishore Derewala, Jaipur. The contention is that all these four matters are also covered by the said decisions and Learned CIT(A) has rightly allowed the appeal filed by the assessee, thereby deleting the orders of penalty, and as such, all these appeals filed by the department deserve to be dismissed. In Hissaria Brothers’ case, our own Hon’ble High Court observed in the manner as:- “38. We are, therefore, of the opinion that since penalty proceedings for default in not having transactions through the bank as required under Sections 269SS and 260T are not related to the assessment proceeding but are independent of it, therefore, the completion of appellate proceedings arising out of the assessment proceedings or the other proceedings during which the penalty proceedings under Sections 2710 and 271E may have been initiated has no relevance for sustaining or not sustaining the penally proceedings and, therefore. Clause (a) of Sub-section (1) of Section 275 cannot be attracted to such proceedings. If that were not so Clause (c) of Section 275(1) would be redundant because otherwise as a matter of fact every penalty proceeding is usually Initiated when during some proceedings such default is noticed, though the final fact finding in this proceeding may not have any bearing on the issues relating to establishing default e.g. penalty for not deducting tax at source while making payment to employees, or contractor, or for that matter not making payment through cheque or demand draft where it is so required to be made. Either of the contingencies does not affect the computation of taxable income and levy of correct tax on chargeable income if Clause (a) was to be invoked, no necessity of Clause (c) would arise.

Thus, both on the ground that the transaction in question retention of sale price by the kachhaadhatiya did not amount to deposit and its utilisation and dealing with it at the instance of farmer constituents did not amount to repayment of loan or deposits willin the meaning of Section 269SS or Section 269T and on the ground that limitation under Section 275(1)(c) applies to such proceedings we hold in favour of the respondents" Thus the order in barred by imitation on both the points”

Faced with the decision by our own Hon’ble High Court upheld by Hon’ble Apex Court, in Hissaria Brothers’ case (supra), Ld. DR for the department has not raised any argument to the contra or cited any other decision by Hon’ble Apex Court on the issue. to 1320/JP Sh. Jugal Kishore Garg alias Sh. Jugal Kishore Derewala, Jaipur. Result 10. In view of the provisions of section 271D, 271E and 275(1) of the Act, and the decision in Hissaria Brother case (supra), we do not find any illegality in the four impugned orders, passed by Learned CIT(A), whereby all the four penalty orders, passed by the Assessing Officer were set aside on the ground that same were passed beyond the prescribed period of limitation. Consequently, all the four appeals filed by the department are hereby dismissed. Files be consigned to the record room after the needful is done by the office. Copy of this common order be placed on the connected files. Order pronounced in the open court on 25/11/2025.