RAM LAL KAPOOR & SONS,NEW DELHI vs. ACIT, NEW DELHI

Assessee by : Sh. Y. K. Sharma, CA Revenue by: Sh. K. K. Jaiswal, DR Date of Hearing 17/03/2016 Date of pronouncement 13/05/2016 O R D E R PER PRASHANT MAHARISHI, A. M. This is appeal filed by the assessee against the order of the ld CIT(A)-35, New 1. Delhi dated 17.11.2015 for the Assessment Year 2007-08 wherein, penalty u/s 271(1)(c) of Rs.18244/- is confirmed. The assessee has raised the following grounds of appeal:-

2. (1) That on the facts and in the circumstances of the case and under the provisions of law the Commissioner has erred in dismissing the ground of the Appellant that the proceedings have become barred by law as the notice/order had been served only on 01/04/2013 (Order passed on 22/03/2013 ) and CIT (A) order was passed on 06/07/2011. (2) That without prejudice to above and that on the facts and circumstances of the case, the Learned. Commissioner has erred in upholding the order of penalty u/s. 271(1) (C ) of I.T. Act of Rs.18,244/-.

3. The brief facts of the case is that assessee is a partnership firm who was assessed u/s 143(3) vide order dated 23.11.2009. In the assessment order remuneration of Rs.59620/- was disallowed u/s 40(b) of the Income Tax Act, 1961. The disallowances arisen because of the reason that the assessee has received interest amounting to Rs.149054/- on income tax refund. This sum was not reduced by assessee from the book profit to calculate remuneration payable to partner. Against this assessee preferred an appeal before the ld CIT (A) who vide order dated 06.07.2011 dismissed the appeal Page 2 of 4 of the assessee. On this disallowance penalty u/s 271(1)(c) was initiated. Vide order dated 22.03.2013 penalty u/s 271(1)(c) was levied on the assessee of Rs.18244/- in the penalty proceedings the assesse’s reply was rejected.

the assessee has contended that the penalty order has been barred by limitation of time as the order of penalty was served on 01.04.2013 which was passed on 22nd March 2013, and order of ld CIT(A) in quantum proceedings was passed on 06.07.2011.

5. Ld AR submitted that according to the provision of section 275 the penalty order should have been passed within one year from the end of financial year in which the order of ld CIT (A) was received. In the present case, the ld CIT(A)’s order is passed on 06.07.2011, therefore, the penalty order should have been passed on or before 31st March 2012. In the present case, the penalty order has been passed on 22.03.2013. On the merits, also he submitted that the assessee has not furnished any inaccurate particulars of income. For this, he relied on the decision of Hon’ble Delhi High Court in case of CIT Vs. Mohair Investments and Trading Co. Pvt. Ltd. dated 30.09.2011 in ITA No.511/2011. He also relied on the order of Hon’ble Gujarat High Court in case of CIT Vs. JJ Industries 35 Taxmann.com 103 (Guj).

6. Ld DR relied on the orders of lower authorities.

7. We have carefully considered the rival contention. In this case, order of ld CIT (A) dated 06.07.2011 was received by the Commissioner of Income Tax on 05.08.2011 and penalty order was passed on 22.03.2013. The penalty order dated 30.03.2013 was sent to assessee by speed post on that date. On the facts of the above case, it is required to be seen whether the penalty order passed by the Assessing Officer is within time or not. The provisions of section 275(1)(a) are perused.

8. According to that where the assessment is subject-matter of appeal then the penalty order is required to be passed by the Assessing Officer later of following two time limits: a. before the expiry of financial year in which the proceedings in the course of which action for imposition of penalty has been initiated. In this case the penalty proceedings are initiated vide order dated