Indian Kanoon - Search engine for Indian Law

Income Tax Appellate Tribunal - Delhi

Shri Lal Mahal Ltd., New Delhi vs Dcit, Circle- 8(1), New Delhi on 9 August, 2019

                INCOME TAX APPELLATE TRIBUNAL
                  DELHI BENCH "G": NEW DELHI

        BEFORE   SHRI AMIT SHUKLA, JUDICIAL MEMBER
                              AND
            SHRI L.P. SAHU, ACCOUNTANT MEMBER

                        ITA No.2299/Del/2019
                         Asstt. Year: 2010-11

       Shri Lal Mahal Ltd.,                    DCIT,
       B-16, Bhagwan Dass Nagar,               Circle-8(1)
       East Punjabi Bagh,                      New Delhi.
       New Delhi-26
       PAN AAECS5326C                    Vs.

       (Appellant)                             (Respondent)



           Assessee by:       Shri B.L. Gupta, Adv.
           Department by :    Shri S.S. Rana, CIT(DR)
           Date of Hearing    16/05/2019
           Date of            09/ 08/2019
           pronouncement

                               ORDER

PER AMIT SHUKLA, J.M.:

The aforesaid appeal has been filed by the assessee against impugned order dated 11.3.2019, passed by Ld. CIT (Appeals) 8, New Delhi in relation to the penalty proceedings u/s 271(1)(c) for the assessment year 2010-11.

2. The assessee is mainly aggrieved by levy of penalty of Rs. 11,58,088/-. In various grounds of appeal assessee has not only challenged the penalty on merits but also on two legal grounds; firstly, that the penalty notice itself is illegal because it does not specify any specific default, that is, whether penalty proceedings is being initiated for concealment of income or for filing of inaccurate particulars of income; and secondly, penalty order passed by the AO is barred by limitation in view of section 275.

3. Before us, Ld. Counsel on the issue of limitation pointed out that here in this case the penalty has been levied after passing of Tribunal order in the quantum proceedings. The Tribunal has passed the order vide order dated 6.3.2018, whereby the appeal of the assessee was dismissed ex parte for non prosecution of the case. The said order of the Tribunal was served upon to the Departmental Representative on 16.3.2018; and in support, he has placed relevant evidence for service of order to the DR. He submitted that, now in view of the judgment of Hon'ble Jurisdictional High Court in the case of Surender Kumar Jain reported in (2018) 100 taxmann.com 38 (Delhi), wherein the Hon'ble High Court has held that the limitation for the purpose of Income Tax Act begins from the point of time when the Departmental Representative receives the copy of the decision or an order of the ITAT. Thus, the penalty order should have been passed on or before 30.9.2018, whereas the same has been passed on 30.10.2018. The finding of the Ld. CIT (A) in para 4.2 on this issue is incorrect in law and on facts.

3. On the other hand, Ld. DR submitted that here in this case, Ld. AO has categorically stated that order of the ITAT was received in the office of CIT (Judicial) on 6.4.2018 and, therefore, the penalty order could have been passed on or before 31st October, 2018, i.e., six months from the end of the month in which the order of the Tribunal is received to the Pr.CIT or Commissioner. Thus, the limitation has to be seen from the date on which order was received in the office of the CIT (Judicial), which was on 6.4.2018.

4. After considering the aforesaid submissions and on perusal of the relevant facts and material placed on record, we find that here in this case penalty has been levied on account of following additions:-

(a) Addition of Rs. 25,48,738/- on account of incorrect disclosure of agriculture income.

(b) Addition of Rs. 5,22,773/- on account of personal expenditure.

(c) Rs. 3,17,635/- u/s 40A(3) of the Act.

(d) Rs. 1,50,000/- on account of ROC fees being capital in nature.

5. AO has initiated the penalty proceedings after passing of the Tribunal order dated 6.3.2018, which has been dismissed ex parte on the ground of the non prosecution. Before us, Ld. Counsel for the assessee has submitted reply received from the office of ITAT in response to RTI Application dated 12.3.2019. The typed version of the said reply is reproduced hereunder:-

INCOME TAX APPELLATE TRIBUNAL 6th, 10th & 11th Floor, Lok Nayak Bhawan, Khan Market, New Delhi - 110 003 Dated: 25/03/2010 To, Shri B.S. Rawat, Director, Shree Lal Mahal Ltd. B-5, Punjabi Bagh, West Delhi, Delhi - 110 026.

Sub : Your application dated 12/03/2019, received in this office on 15/03/2019 Sir, The information sought by you under RTI Act, 2005 is as under :-

 INFORMATION SOUGHT                           REPLY
On which date tribunal order in      The tribunal order in ITA No.
ITA No. 4234/2013 (A.Y.2010-11)      4234/2013 (A.Y. 2010-11) in
was served upon the Sr. DR           the case of Shri Lal Mahal Ltd.
                                     was served upon the office of
                                     Commissioner of Income Tax
                                     (DR) on 16/03/2018

You are hereby, informed that if you are not satisfied with the information provided herewith, the appeal lies with the First Appellate Authority under RTI Act, ITAT, Delhi Benches, New Delhi.

This issues with the approval of the Hon'ble CPIO, ITAT, Delhi.

Sd/-

(Bikram Dutt) A.R. & A.P.I.O ITAT, NEW DELHI"

6. Thus, from the record of the Tribunal it is clear that Tribunal order passed in ITA No. 4234/Del/2013 in the case of the assessee was served upon the office of CIT (DR) on 6.3.2018. Now the main issue is, whether the period of limitation should be counted from the date on which order has been served on the Departmental Representative, i.e., 6.3.2018; or when the order was received in the office of CIT (Judicial) on 6.4.2018 as mentioned in the penalty order. This precise issue has been dealt by the Hon'ble Delhi High Court in the case of CIT vs. Odeon Builders Pvt. Ltd. (2017) 393 ITR 27 which has been reiterated and followed in the case of Surender Kumar Jain vs. Pr.CIT by Hon'ble High Court. The relevant observations of the Hon'ble High Court in the case of Surender Kumar Jain vs. Pr. CIT (supra) reads as under :-

"5. It is quite evident from the decision in Odeon Builders (P.) Ltd. (supra) that limitation begins (for any purpose under the Act) from the point of time when the departmental 4 representative receives the copy of a decision or an order of the ITAT. The evidence on record in this case clearly establishes that the concerned DR (a Commissioner ranking officer) nominated by the revenue received a copy of the ITAT order dated 30.03.2016. The starting point of limitation therefore was 31.03.2016."

7. If we follow the principle laid down by the Hon'ble Jurisdictional High Court, then limitation in the present case will start from the point of time when the Departmental Representative has received the copy of the order of the Tribunal, which here in this case was dated 16th March, 2018; and therefore, the period of limitation for passing of the order was up to 30th September, 2018, i.e., 6 months from the end of the month in which the order of the Tribunal is received. Thus, the impugned penalty order dated 30.10.2018 is squarely barred by limitation in terms of section 275. Accordingly, on this ground the impugned penalty order is quashed and consequently appeal of the assessee is allowed.

8. In the result appeal of the assessee is allowed.

Order Pronounced in the open court on 9th August, 2019.

           sd/-                                            sd/-
     (L.P. SAHU)                                      (AMIT SHUKLA)
ACCOUNTANT MEMBER                                    JUDICIAL MEMBER
Dated: 09/ 08/2019
Veena
Copy forwarded to
     1.   Applicant
     2.   Respondent
     3.   CIT
     4.   CIT (A)
     5.   DR:ITAT
                                                   ASSISTANT REGISTRAR
                                                        ITAT, New Delhi

                                       5