AI Drafter 
TaxTMI 
TaxTMI 
2016 (1) TMI 222
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....and the application for condonation of delay and admission of additional ground sought to be taken by the assessee by way of cross objection may kindly be heard first. The ld. DR fairly submitted that she has no objection if the application for condonation of delay and for admission of additional ground being legal is taken up for hearing first. The ld. AR submitted that the cross objections of the assessee being ITA Nos. 17 & 18/Del/2015 are delayed by 1297 and 1244 number of days but as per the notice issued by the ITAT Registry, there was delay of 1266 and 1211 days. Elaborating the reasons for delay, the ld. Counsel has drawn our attention towards the application for condonation of delay and affidavits of the Director of the assessee company and submitted that the earlier appeal was being handled by Shri Satish Agarwal, CA and he never adviced the assessee for filing any cross objection. But on 22.1.2015, when the counsel was changed and Shri R.K. Gupta, CA was appointed as new counsel, then on going through the relevant case records, he adviced that since the impugned penalty order is barred by limitation, therefore, the company alongwith request for admission of additional gr....
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....e not filed. However, when the assessee transferred the case to Mr. S.S. Gajja, Chartered Account, who advised that appeals are to be filed before the Tribunal as the order of the CIT(A) is not as per the provisions of law. I noted that due to wrong advice of the Chartered Accountant, appeals could not be filed in time, therefore, I am of the view that there is a reasonable cause in not filing the appeals in the time. The decision in the case of The Phoenix Mills Ltd (supra), on which reliance has been placed, is in favour of the assessee. In this case the ratio of the decision of the Hon'ble Apex Court in the case of Concord of India Insurance Co. Ltd. Vs. Smt. Nirmala Devi and others, reported in (1979) 118 ITR 507(SC), has been considered, wherein it has been held that the mistake of the counsel may in certain circumstances be taken into account in condoning the delay although there is no general proposition that mistake of counsel by itself is always a sufficient ground. Accordingly, the Hon'ble Apex Court has held that there is a mistake of the counsel and, therefore, the delay in filing the appeal has been condoned. I further noted that similar finding has been expres....
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.... time before the ITAT in the nature of additional ground, therefore, the same may kindly be admitted for adjudication. The ld. AR placed reliance on the proposition laid down by the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd reported in 229 ITR 383 [Hon'ble Supreme Court] submitting that the issue which is purely legal and which goes to the root of the matter and no new facts are required to be invoked, then the same should be admitted for adjudication being legal objection of the assessee. The ld. AR also placed reliance on the decision of the ITAT Delhi Bench vide order dated 26.9.2014 in the case of DCIT Vs. Silver Line passed in cross objection Nos. 122, 109, 107 & 108/Del/2012. 8. The ld. DR vehemently contended that when the ground was not raised before the ld. CIT(A), then the same cannot be raised before the Tribunal by way of additional ground. 9. On careful consideration of the above submissions, at the very outset, we note that the ITAT 'G' Bench Delhi in the case of DCIT Vs. Silver Line [supra] has elaborately considered the submissions of the assessee as well as of the Revenue on admission of additional ground raised by the as....
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....h provide that after 31-04-2008 in a ease where assessee has appeared or cooperated in any inquiry relating to assessment or reassessment, he after the completion of the assessment/reassessment cannot question the notice service of any notice on the following grounds; (a) that notice has not been served; or (b) that notice has not been served in time; or (e) that notice has been served upon him in an improper manner. 1.2 In the case before the High Court (as seen from para 26 of the Order), assessment proceedings had not got completed (only a draft order was proposed) by the time when service of notice u/s 143(2)(ii) was challenged before the High Court by way of Writ Petition. Since, the challenge has been there before the completion of the assessment or reassessment proceedings the High Court in para 28 held that benefit of saving as provided u/s 292BB is not available to Revenue and hence Writ of Certiorari was issued quashing the assessment proceedings. 02. In so far as the facts of the CO filed by assessee Silverline (AY 08-09) are concerned it would be relevant to take note that Notice u/s 148 was issued on 28-03-2011 and thereafte....
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....rom the findings of the earlier Bench of this Tribunal in ITA No. 6020/Del/2012 dated 29.5.2014 in the case of B.R.Arora v. ACIT. 6.5 Further, it was submitted by the learned counsel that Section 292BB is applicable only from A.Y. 2008-09 onward in light of dictum laid down by the Hon'ble Special Bench of the Tribunal in case of Kuber Tabacco Products (Pvt.) Ltd. reported in 117 ITD 273 (Delhi) (S.B), which was affirmed by the Hon'ble Delhi H.C. by judgment dated 06.10.2010 in Writ Petition No. 1159 & 1161/2010. It was submitted further that when no notice u/s 143(2) is issued. Section 292BB does not have any application. For above proportion, the learned AR relied on the following case laws: i) Manish Gupta 259 CTR 57 (All.) H.C. ii) Parikalpana Estate Development (P) Ltd. 79 DTR 241 (All.) 6.6 In conclusion, it was contended that non-issuance of a notice u/s 143(2) of the Act, the assessment concluded u/s 147 of the Act becomes invalid. For this proposition, the learned AR had placed strong reliance on the following case laws, namely: (i) B.R.Arora v. ACIT in ITA No.6020/D/2012 dated 29.5.2014 - ITAT, Delhi 'A' Bench; ....
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.... can participate in the proceedings without there being any ITA Nos.1809, 1504, 1505 & 1506 /Del/ 2013 C.O. Nos.122, 109, 107 & 108 /Del/2013 notice (written or oral). Upon participation in the proceedings one can conclude that there was notice about which assessee had the knowledge. 2.4 Since, the Income Tax Act is silent for obvious reasons which even lay person (as shown above) can appreciate about the crucial aspect of the 'issuance of notice or the form (whether written or oral) in which it is to be served we have to form understanding with the help of other sources like Dictionaries which define the 'Notice' to mean information, knowledge of the existence of a fact or to apprise a person of some proceeding in which his interest are involved. Black's Law Dictionary (5th Edition) provides 'a person has notice of a fact if he knows the fact' and that it can be in many ways like implied, constructive etc. When seen in the context of the present case undisputed service of notice u/s 148 and thereafter participation of the assessee in assessment goes to show that it had the notice of the proceedings. 2.5 It is requested to kindly appreciate that section 292B....
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....at Finance Act is always for the financial year for which budget is being laid before the Parliament. It is why, Finance Act is generally in the context of the income which has been earned on which likely revenue realization can be worked out as such except where it is specifically provided as to form which particular date that will apply. But this has no relation with the procedural provisions which would apply with effect from the date from which it is inserted on the statute book dealing with the procedures taking place on that date or thereafter. 4. Thus, the interpretation that law requires issuance of notice deserves to be rejected. 5.0 In the light of the aforesaid submission alone it would become clear that none of the decisions referred to in para 1 above are applicable. Though in view of the discussion made above it is clear that all the three judgments referred to above do not need further submissions yet for the sake of further clarity qua the inapplicability these are being dealt with in the following paragraph 5.1 to 5.3. 5.1 In so far as Delhi High Court judgment in Kuber Tobacco Products P Ltd. Delhi HC 06.10.2010 is concerned it is humbly....
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....out that since the additional ground sought to be raised is legal in nature and goes to the root of the matter and also in view of the judgments of (i) the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd 229 ITR 383 (SC) and (ii) the Hon'ble Delhi High Court in Gedore Tools Pvt. Ltd reported in 238 ITR 268 (Del), we are inclined to admit the same and taken up for consideration. 7.1. Now, the moot question for consideration is: Whether the non-issuance of a notice u/s 143(2) of the Act as alleged by the assessee-firm had vitiated the conclusion of the assessments u/s 147 read with s. 143(3) of the Act? On receipt of information from the DIT (Inv), Jaipur that there were alleged bogus purchases resorted to by the assessee firm, the AO had reopened the assessments of the assessee for the assessment years under dispute by issuance of notices u/s 148 of the Act. Subsequently, notice u/s 142(1) of the Act along with questionnaire was issued to the assessee. In the reassessment proceedings, after having considered the asssessee's submissions, the AO had concluded the re-assessments making certain additions. While doing so, however, no notices u....
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....tances of the case, the impugned penalty orders levying penalty u/s 271D & 271E of the Act is barred by limitation and the same may kindly be quashed, allowing the objection of the assessee. 13. Per contra, the ld. DR supported the orders of the AO and submitted that the ld. CIT(A) was not justified in deleting the penalty without appreciating that the transactions between the assessee company and Shri R.C. Arora, Director recorded in the RCA Imprest A/c were of the nature of loan or deposits, as per Explanation (iii) to section 269SS of the Act. The ld. DR further submitted that the assessee company did not incur any expenses through the RCA Imprest A/c during the year under consideration, which was without reasonable cause and in contravention of provisions of section 269SS of the Act. The ld. DR further submitted that the assessee company had not carried out any business during the period under consideration and there was no business exigencies to receive loan or deposit in cash from the Director. The ld. DR was of the view that the cases relied upon by the ld. CIT(A) had no similarities with the facts of the assessee's case. He further vehemently argued that the ld. CIT(A) d....
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....ings has no relevance over sustaining such penalty proceedings. As held clearly by this Court, in such a matter, clause (c) of Section 275 (1) would be applicable. Section 275(1)(c) could be noticed as under:- "275. Bar of limitation for imposing penalties. (1) No order imposing a penalty under this Chapter shall be passed- ....... (c) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later." In the present case, the first show cause notice for initiation of proceedings was issued by the AO on 25.03.2003 and was served on the assessee on 27.03.2003. Obviously, the later period also expired on 30.09.2003 when six months expired from the end of the month in which the action for imposing the penalty was initiated. The order as passed by the Joint Commissioner of Income Tax for the penalty under Section 271D on 28.05.2004 was clearly hit by the bar of limitation and has rightly been set aside in ....
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....rer cheque'. This conclusively proves that the action for imposition of penalty has been initiated on 10th Jan., 2003 as recorded in assessment order dt. 27th Jan, 2003. It is a different fact that the ITO, who has so initiated the penalty is not competent to levy penalty under s. 271D. However, it cannot be said that the action has not been initiated. Once the penalty proceedings have been initiated, whosoever is the competent authority has to pass an order imposing penalty if he is of the opinion that penalty under s. 271D is attracted. The authority competent to levy penalty is thereafter not initiating the proceedings for imposition of penalty but is only exercising his powers. But, merely because he chooses to exercise his powers after a considerable time he cannot get a fresh limitation if on earlier occasion, the action for imposition of penalty has already been initiated. He can only continue the action earlier taken and in all cases the order imposing penalty shall be passed within the limitation prescribed under s. 275(1)(c). Since the action for imposition of penalty has been initiated on 10th Jan., 2003, as per s. 275(1)(c), the limitation period will expire on 31st Jul....
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....th permissible ways, the period of limitation is either 31st March, 1999 or 29th Oct., 1999. 29th Oct., 1999 being later in time, that was the available outer limit for the Department to impose penalty. The order imposing penalty is passed on 13th March, 2000. Coming to the opening part of sub-s.(1), it says, 'no order imposing penalty............. shall be passed'. Thus, once the period of limitation prescribed by either of cls. (a) to (c) has expired, the Departmental authorities have no powers to impose penalty. The opening part rules out any possibility of taking initiation of proceedings as 'sufficient compliance' or as keeping the proceedings within limitation. Language is so couched that the penalty proceedings are expected to be concluded before expiry of period of limitation." In view of our above discussion and in view of the decision of Tribunal referred above as well as that of Hon'ble Bombay High Court, we hold that the order imposing penalty is beyond the limitation period prescribed and hence, penalty under s. 271D is cancelled. 17. In the light of the proposition laid down by the Hon'ble Rajasthan High Court and ITAT, Delhi [supra], when we ....
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....eyond 30.9.2013 [as per date of 14.9.2012 on which relevant return was filed. 19. In view of the above noted facts of the case of Sunworld [supra], the ld. AR submitted that the analogy advanced by the ld. DR cannot applied to the present case as the present case is not related to section 143(2) of the Act and there is no dispute of territorial jurisdiction and issuing and withdrawing the notice u/s 143(2) of the Act by the AO not having territorial jurisdiction. The ld. AR replied that the limitation prescribed in the second proviso to section 143(2) cannot be equated with sub-section (c) of section 275(1) of the Act as provisions of section 143(2) mandates limitation for service of notice whereas sub-section (c) to section 275(1) of the Act prescribes limitation for passing of penalty order reckoning from the date of issuance of notice. 20. In view of the above, we decline to accept the contentions of the ld. DR that the limitation for initiation of penalty proceedings has to be calculated from the date of issuance of second notice by the Additional CIT as speaking for the Hon'ble Rajasthan High Court, their Lordships explicitly held that when the first show cause notic....