TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 222
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....d 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 ground should have been filed immediately alongwi....
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....se 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 expressed by the Hon'ble Supreme Court in the case of N. Bal....
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....fore, 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 assessee which was not raised before the first appellate authority an....
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....nquiry 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 thereafter taking note of the compliance or non compliance made by the assessee, AO finalized the assessment proceedings on 28-12-2....
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....ther, 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; (ii) Alpine Electronics Asia Pte Ltd v. DGIT & Ors. (2012) 341 ITR 247 (Del); (iii) ITO v. D.D. Ahuja & Brothers - 158 TTJ (Lucknow) 54; (iv) Sapthagiri Finance a....
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....ch 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 292BB, 142(1), 143(2) are part of the machinery provided under the Income Tax Act to ascertain the correctness of the disclosures made in the return of income. That is, section 292BB is just a procedural provision unlike the charging sections which have inti....
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....ecifically 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 submitted that this does not help the cause of the appellant assessee. Before elaborating this aspect further, it will be relevant to note as to what the High Court has held which is as under: "In our view ITAT rightly held that 292BB is not retrospective as it creates disability by precl....
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....d 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/s 143(2) of the Act were issued to the assessee, even though notice u/s 142(1) of the Act was ordered to be issued on 14.11.2011. This was apparent from the perusal of the Order Sheet for the AY 2005-06 [Source: P 88 of PB-I AR]. This fact has been admitted by the Revenue through a RTI query by the assessee firm [Refe....
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....ithout 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) deleted the penalty without giving an opportunity of being heard to the AO. He concluded his arguments by submitting that the assessee's explanation regarding cash payment of R. 23 lakhs to Shri R.C. Arora through RCA Imprest A/c on 30.6.2006 was incorrect since Shri R.C. Arora was out of India on that day as per documentary evi....
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...... (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 the orders impugned. In view of the above, our answer to the formulated question of law is that even when the authority competent to impose penalty under Section 271D was the Joint Commissioner, the period of limitation for the purpose of such penalty D.B. INCOME TAX APPEAL NO.90/2007 Commissioner of Income Tax, Udaipur Vs. Shri Jitendra Singh Rathore. proceedings ....
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.... 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 July, 2003. Thus, the order passed under s. 271D by Addl. CIT dt. 29th Dec., 2003/15th Jan., 2004 is beyond the limitation and hence, not sustainable in law. Similar view has been adopted by Tribunal, Jodhpur Bench in the case of Hissaria Bros. (supra) and Tribunal Hyderabad Bench in the case of Dillu Cine Enterprises (P) Ltd. (supra). In the case before Hon'ble Bombay High Court in the case of Chhajer Packaging &....
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....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 analyze the facts and circumstances of the case in hand, then undisputedly and admittedly the first notice for initiation of penalty proceedings u/s 271D and 271E of the Act was issued by the AO on 31.12.2009 who framed the original assessment orders and the other notice dated 26.07.2010 was issued by the Additional CIT who passed the penalty order on 4.1.2011. The ld. AR has contended that the period of limitation prescribed u/s 275(1)(c) of the ....
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....l 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 notice for initiation of penalty proceedings was issued by the AO, then obviously six months expired from the end of the month in which the action for imposition of penalty was initiated by the AO and thus the order, as passed by the competent authority i.e. JCIT/ACIT imposing penalty u/s 271D was clearly hit by the bar of limitation and the same deserves to be set aside. At this juncture, it is pertinent to mention that on a specific query from the Bench, t....