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

ITA 1174/JPR/2025Status: DisposedITAT Jaipur13 November 2025AY 2019-2066 pages
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What did the Tribunal hold?

The Tribunal held that the CIT(A) rightly deleted the penalty on technical grounds, specifically concerning the limitation period. The Tribunal agreed with the CIT(A)'s finding that the penalty proceedings were barred by limitation, as the relevant date for determining limitation for penalty under Section 271E is the date of the show cause notice issued by the Additional/Joint Commissioner, not the date of the assessment order. The Tribunal dismissed the Revenue's grounds related to limitation, citing the Rajasthan High Court's decision in Hissaria Brothers and the Kerala High Court's decision in Grihalaxmi Vision. Consequently, the Tribunal found no infirmity in the CIT(A) not deciding the merits of the penalty levy. Regarding 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. The Tribunal relied on the Supreme Court's decision in CIT vs. Jai Laxmi Rice Mills and the Rajasthan High Court's decision in Sunil Agarwal, which held that penalty under Section 271E cannot be levied without such satisfaction. The assessee did not press ground 1.2 of its cross-objection. Therefore, 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 batch of appeals filed by the Revenue and cross-objections by the assessee, M/s Gokul Kripa Colonizers & Developers Pvt. Ltd., for assessment years 2015-16 to 2021-22. The appeals by the Revenue challenged the deletion of penalties levied under Section 271D and Section 271E of the Income Tax Act, 1961, by the Additional/Joint Commissioner of Income Tax. The penalties were imposed for contravention of Section 269SS and Section 269T of the Act, respectively, with amounts varying across assessment years. The assessee's cross-objections argued for the deletion of penalties on grounds of limitation and lack of satisfaction for initiation. A search action on 19-01-2021 had revealed cash loans utilized for the assessee's real estate business.

What were the issues?

1. Whether the Ld. CIT(A) erred in deleting the penalty on technical grounds without deciding the merits of the penalty levy? 2. Whether the Ld. CIT(A) erred in holding that the limitation period for imposing penalty under Section 271E is the date of the assessment order, not the show cause notice date, and in ignoring that the Assessing Officer (AO) could not impose the penalty? 3. Whether the Ld. CIT(A) erred in ignoring the Kerala High Court's decision in Grihalaxmi Vision, holding that the limitation for penalty proceedings under Section 271D/E starts from the show cause notice issued by the Addl./Jt. CIT? 4. Whether the Ld. CIT(A) erred in relying on Hissaria Brothers without appreciating that the facts differed, as the present case did not involve an extension of limitation due to an appeal against the assessment order? 5. Whether the penalty imposed is not maintainable as no satisfaction was recorded for initiation of penalty under Section 271E in the assessment order? Assessee's Contentions: The penalty is not maintainable due to limitation as held by the CIT(A). Alternatively, no satisfaction was recorded for initiating penalty under Section 271E in the assessment order. The alleged loans were repayments of income or return of income/expenses, thus outside the purview of Section 269T. Revenue's Contentions: The CIT(A) erred in deleting the penalty on technical grounds without deciding merits. The CIT(A) erred in determining the limitation period based on the assessment order date instead of the show cause notice date and ignoring the AO's inability to impose the penalty. The CIT(A) erred in ignoring the Kerala High Court's decision in Grihalaxmi Vision and misapplied Hissaria Brothers.

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),Section 271(1)(c)

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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 प्रत्यर्थी / Respondent स्थायीलेखा सं. / जीआईआर सं./PAN/GIR No.:AAECG8317K अपीलार्थी / Appellant 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 प्रत्यर्थी / Respondent स्थायी लेखा सं. / जीआईआर सं./PAN/GIR No.: AAECG8317K अपीलार्थी / Appellant 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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