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

ITA 1177/JPR/2025Status: DisposedITAT Jaipur13 November 2025AY 2021-2266 pages
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What did the Tribunal hold?

The Tribunal held that the issue of limitation for imposing penalty under Section 271E of the Income Tax Act, 1961, was squarely covered by the decision of the Hon'ble Supreme Court in the case of Hissaria Brothers (386 ITR 719). This decision affirmed that penalty orders under Sections 271D and 271E passed beyond six months from the end of the month in which the assessments were completed are barred by limitation. The Tribunal also referred to the Hon'ble Rajasthan High Court's decision in CIT v. Jitendra Singh Rathore, which held that even when the competent authority to impose penalty is the Joint CIT, the limitation period should be reckoned from the date of the first show cause notice for initiation of penalty proceedings. The Tribunal found that the penalty orders in question were passed beyond the prescribed limitation period as per Section 275(1)(c) of the Act. Therefore, the deletion of penalties by the CIT(A) on the ground of limitation was upheld. The Tribunal did not explicitly decide on the other grounds raised by the assessee in their cross-objections, as the appeals were dismissed on the preliminary issue of limitation.

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Jaipur Bench, heard a consolidated batch of appeals filed by the Revenue and cross-objections by the assessee, M/s Gokul Kripa Colonizers & Developers Pvt. Ltd. The appeals pertained to assessment years 2015-16 to 2021-22 and challenged the deletion of penalties levied under Sections 271D and 271E of the Income Tax Act, 1961. The penalties were imposed by the Additional/Joint Commissioner of Income Tax (AO) on August 28, 2023, and subsequently challenged before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) had deleted these penalties. The Revenue's appeals focused on the CIT(A)'s findings, while the assessee's cross-objections argued for upholding the deletion on additional grounds, including lack of satisfaction for penalty initiation and the nature of the transactions.

What were the issues?

1. Whether the CIT(A) erred in deleting the penalty on technical grounds without deciding on the merits of the penalty levy? 2. Whether the CIT(A) erred in holding that the limitation period for imposing penalty under Section 271E of the Act is to be reckoned from the date of the assessment order, not the show cause notice, and ignoring that the AO was not empowered to impose the penalty? 3. Whether the CIT(A) erred in ignoring the Kerala High Court's decision in Grihalaxmi Vision v. Addl. Commissioner of Income Tax, 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? 4. Whether the CIT(A) erred in relying on the Hon'ble Apex Court's decision in Hissaria Brothers, despite the facts being different from the present case? Assessee's contentions (in cross-objection): 1. The penalty is not maintainable as no satisfaction was recorded by the AO for initiating penalty under Section 271E. 2. The debit entries represent repayments of income or return of income or expenses, thus falling outside the purview of Section 269T of the Act. Revenue's contentions: The Revenue argued that the CIT(A) erred in deleting the penalty on technical grounds and that the limitation period should be reckoned from the show cause notice. They relied on the decision in Grihalaxmi Vision and distinguished the facts of Hissaria Brothers.

Which sections of the Income-tax Act were involved?

Section 271D,Section 271E,Section 275,Section 269T,Section 132,Section 133A,Section 147,Section 143(3),Section 263,Section 264

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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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