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

ITA 1178/JPR/2025Status: DisposedITAT Jaipur13 November 2025AY 2021-2266 pages
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What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeals. Regarding the Revenue's grounds concerning limitation (ii and iii), the Tribunal upheld the CIT(A)'s finding, finding no infirmity in confirming the view of the CIT(A) based on the Rajasthan High Court's decision in Hissaria Brothers. The Tribunal noted that the amended provision of Section 271D(2) states that any penalty shall be imposed by the Joint Commissioner, and the AO was not allowed to impose the penalty. Therefore, the passing of the assessment order by the AO and the reference made by the AO had no bearing on deciding the limitation date for imposing penalty under Section 271E. Consequently, Revenue's grounds 2 and 3 were dismissed. Revenue's ground 1, concerning the deletion on technical grounds without deciding merits, was also dismissed as the proceedings were barred by limitation. The Tribunal also dismissed Revenue's ground 4, stating that the CIT(A) rightly followed the binding precedent of the Rajasthan High Court in Hissaria Brothers. The Revenue's appeal was dismissed. For the assessee's cross-objection, ground 1.1 regarding the lack of satisfaction for penalty initiation in the assessment order was allowed. The Tribunal relied on the Supreme Court's decision in CIT vs. Jai Laxmi Rice Mills and the jurisdictional High Court's decision in Sunil Agarwal, holding that penalty levied without satisfaction in the assessment order is not sustainable. Ground 1.2 raised by the assessee was not pressed and left undecided. The cross-objection was partly allowed.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) heard a batch of appeals filed by the Revenue (Dy. Commissioner of Income Tax) and cross-objections filed by the assessee (M/s Gokul Kripa Colonizers & Developers Pvt. Ltd.) for assessment years 2015-16 to 2021-22. The appeals concerned 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 28.08.2023, with amounts ranging from Rs. 1,13,34,587/- to Rs. 32,96,15,250/-. The Commissioner of Income Tax (Appeals) had deleted these penalties. The lead case for discussion was ITA No. 1168/JP/2025 for AY 2017-18 and its corresponding cross-objection.

What were the issues?

1. Whether the CIT(A) erred in deleting the penalty solely on technical grounds without deciding the merits of the penalty levy (Revenue's ground i)? 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 that the AO's assessment order and reference are irrelevant to the limitation date (Revenue's ground ii)? 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 (Revenue's ground iii)? 4. Whether the CIT(A) erred in relying on Hissaria Brothers, despite the facts being different from the present case (Revenue's ground iv)? 5. Whether the penalty is maintainable as no satisfaction was recorded for its initiation in the assessment order (Assessee's ground 1.1)? Assessee's arguments: The penalty is bad in law due to lack of satisfaction in the assessment order. Alternatively, the debit entries represent repayments of income or expenses, thus outside the purview of Section 269T. Revenue's arguments: The CIT(A) erred in deleting the penalty on technical grounds and misinterpreting the limitation period for penalty proceedings. The Revenue relied on the decision of the Hon'ble Kerala High Court in Grihalaxmi Vision and argued that the facts in Hissaria Brothers were distinguishable.

Which sections of the Income-tax Act were involved?

Section 271D,Section 271E,Section 269SS,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 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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