DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, JAIPUR, JAIPUR vs. M/S GOKUL KRIPA COLONIZERS & DEVELOPERS PVT. LTD., JAIPUR

ITA 1162/JPR/2025Status: DisposedITAT Jaipur13 November 2025AY 2015-1666 pages
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What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeals. Regarding the Revenue's grounds concerning limitation and the applicability of precedents like Grihalaxmi Vision and Hissaria Brothers, the Tribunal found no infirmity in the CIT(A)'s decision, particularly in light of the Rajasthan High Court's decision in Hissaria Brothers. The Tribunal confirmed the CIT(A)'s view that the proceedings were barred by limitation, thus the Revenue's ground regarding the deletion on technical grounds without deciding merits was also dismissed. For the Assessee's cross-objection, the Tribunal held that the penalty under Section 271E was not sustainable due to the lack of satisfaction recorded in the assessment order for initiating such penalty. This was supported by the Apex Court's decision in CIT vs. Jai Laxmi Rice Mills and the jurisdictional High Court's decision in Sunil Agarwal. Consequently, the penalty was annulled on this ground. The Assessee did not press its ground 1.2, which was left undecided. The appeals of the Revenue were dismissed, and the cross-objections of the Assessee were partly allowed.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) heard a consolidated set of appeals and cross-objections concerning assessment years 2015-16 to 2021-22. The appeals were filed by the Deputy Commissioner of Income Tax (Revenue) against orders of the Commissioner of Income Tax (Appeals) [CIT(A)] that deleted penalties levied by the Additional/Joint Commissioner of Income Tax (AO) under Sections 271D and 271E of the Income Tax Act, 1961. The penalties were imposed for contravention of Section 269SS and 269T of the Act, respectively, related to cash loans and repayments. The total disputed penalty amounts across various assessment years were substantial. The AO had initiated penalty proceedings based on a search and seizure action on January 19, 2021, which revealed information about cash loans utilized for the assessee company's real estate business.

What were the issues?

1. Whether the CIT(A) erred in deleting the penalty on technical grounds without deciding the merits of the penalty levy, as argued by the Revenue. 2. Whether the CIT(A) erred in holding that the limitation period for imposing penalty under Section 271E is the date of the assessment order, not the date of the show-cause notice, and in ignoring that the AO was not empowered to impose such penalty, as argued by the Revenue. 3. Whether the CIT(A) erred in ignoring the Kerala High Court's decision in Grihalaxmi Vision, which held that the limitation for penalty proceedings under Sections 271D/E starts from the issue of the show-cause notice by the Additional/Joint CIT, as argued by the Revenue. 4. Whether the CIT(A) erred in relying on the Hon'ble Apex Court's decision in Hissaria Brothers, which was factually different from the present case concerning the extension of limitation due to pending appeals, as argued by the Revenue. 5. Whether the penalty imposed under Section 271E is not maintainable because no satisfaction was recorded for its initiation in the assessment order, as argued by the Assessee in its cross-objection. Revenue's contentions: The CIT(A) wrongly deleted penalties on technical grounds. The limitation period for penalty under Section 271E should be calculated from the show-cause notice date. The CIT(A) erred in relying on Hissaria Brothers and ignoring Grihalaxmi Vision. Assessee's contentions: Penalty is not maintainable due to lack of satisfaction in the assessment order. The transactions were repayments of income or expenses, thus outside the purview of Section 269T.

Which sections of the Income-tax Act were involved?

Section 271D,Section 271E,Section 269SS,Section 269T,Section 132,Section 133A,Section 270A,Section 271AAC(1)

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आयकर अपीलीय अधिकरण, जयपुर न्यायपीठ, जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, "B" JAIPUR डा० एस. सीतालक्ष्मी न्यायिक सदस्य एवं श्री राठोड कमलेश जयन्तभाई, लेखा सदस्य के समक्ष BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, आयकर अपील सं./ITA Nos.1162, 1164 to 1170, 1174 to 1178/JP/2025 निर्धारण वर्ष / Assessment Year : 2015-16 to 2021-22 Dy. Commissioner of Income Tax, Central Circle-02, Jaipur बनाम Vs. M/s Gokul Kripa Colonizers & Developers Pvt. Ltd.

Central Circle-03, Jaipur स्थायीलेखा सं. / जीआईआर सं./PAN/GIR No.:AAECG8317K अपीलार्थी / Appellant प्रत्यर्थी / Respondent CO. Nos.34 to 46/JPR/2025 (Arising out of ITA. No. 769/JPR/2023) निर्धारण वर्ष / Assessment Year : 2015-16 to 2021-22 M/s Gokul Kripa Colonizers & Developers Pvt. Ltd.

Central Circle-03, Jaipur बनाम Vs.

Dy. Commissioner of Income Tax, Central Circle-02, Jaipur स्थायी लेखा सं. / जीआईआर सं./PAN/GIR No.: AAECG8317K अपीलार्थी / Appellant प्रत्यर्थी / Respondent निर्धारिती की ओर से / Assessee by: Shri Vijay Goyal, CA & Shri Gulshan Agrwal, CA राजस्वकी ओरसे / Revenue by: MS. Alka Gautam, CIT-DR सुनवाई की तारीख / Date of Hearing : 29/10/2025 उदघोषणा की तारीख / Date of Pronouncement: 13

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