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

ITA 1169/JPR/2025Status: DisposedITAT Jaipur13 November 202566 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 CIT(A)'s reliance on technical grounds, the Tribunal held that the CIT(A)'s finding on the limitation period, as per the Rajasthan High Court's decision in Hissaria Brothers, was correct. The Tribunal agreed that the penalty proceedings were barred by limitation, and therefore, the CIT(A) rightly did not decide the merits. Thus, grounds 1, 2, and 3 raised by the revenue were dismissed. The Tribunal also dismissed ground 4, finding no error in the CIT(A)'s reliance on Hissaria Brothers. For the assessee's cross-objection, the Tribunal held that the penalty was not sustainable as no satisfaction for initiating penalty under Section 271E was recorded in the assessment order, citing the Apex Court's decision in CIT v. Jai Laxmi Rice Mills and the Rajasthan High Court's decision in Sunil Agarwal. Therefore, ground 1.1 of the assessee's cross-objection was allowed. Ground 1.2 of the assessee's cross-objection was not pressed and left undecided. Consequently, the revenue's appeals were dismissed, and the assessee's cross-objections 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 revenue (Dy. Commissioner of Income Tax) appealed against the deletion of penalties levied under Section 271D and 271E of the Income Tax Act, 1961, by the Commissioner of Income Tax (Appeals) [CIT(A)]. The penalties were imposed by the Additional/Joint Commissioner of Income Tax (AO) for contravention of Section 269SS and 269T of the Act, relating to cash loans and repayments. The assessee (M/s Gokul Kripa Colonizers & Developers Pvt. Ltd.) had challenged these penalties before the CIT(A). The search and seizure action leading to these proceedings occurred on January 19, 2021.

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 of the Act is the date of the assessment order, not the date of the show cause notice, and in ignoring that the AO could not impose the penalty, as argued by the revenue? 3. Whether the CIT(A) erred in ignoring the Kerala High Court's decision in Grihalaxmi Vision v Addl. Commissioner of Income Tax, holding that the limitation for penalty proceedings under Sections 271D/E starts from the issue of the show cause notice by the Addl./Jt. 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 without appreciating that the facts were different, specifically regarding the extension of limitation due to pending appeals, as argued by the revenue? 5. Whether the penalty imposed is not maintainable and bad in law because no satisfaction was recorded for the initiation of penalty under Section 271E in the assessment order, as argued by the assessee in its cross-objection? 6. Whether the debit entries are repayments of income or return of income/expenses and thus outside the purview of Section 269T, as argued by the assessee in its cross-objection?

Which sections of the Income-tax Act were involved?

Section 271D,Section 271E,Section 269SS,Section 269T,Section 132,Section 133A,Section 271(1)(c),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 Vs. बनाम 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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