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TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 1371
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....under Vishesh Krishi Upaj Yojna (VKUY) @ 5% of FOB value to exports direct income. The CIT also initiated proceedings under section 271(1)(c) of the Act for furnishing inaccurate particulars of income. The assessee went in appeal before ITAT Chandigarh Bench against the order of CIT under section 263 of the Act. The Tribunal passed the order on 03.01.2014 in ITA 553/CHD/2011. The Tribunal decided the issue against the assessee and in para 58, the Tribunal upheld the enhancement made by the CIT and held as under : "58.Further benefits are also given under the scheme, but the relevant benefits of the scheme vis-à-vis assessee are as referred to by us in the above para. In view of the scheme under which the assessee is entitled to the incentives which in turn are to compensate high transport cost and to offset other advantages to the exporters, and also in view of the fact that the incentives are to be allowed at reduced rates where the assessee is in receipt of Duty Drawback, DEPB, we are of the view that the incentives received by the assessee under the 'Vishesh Krishi Upaj Yojna' as an export incentive were given to the assessee to neutralize the incidence of high transpor....
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....er appeal on 30.10.2006 whereas the Supreme Court has given decision on 31.08.2009 which is much later than filing of the return. The assessee relied upon certain decisions in support of the contention. 5. The Pr. CIT in his findings noted that the contention of the assessee has no merit in view of the fact that Hon'ble jurisdictional High Court in the case of Liberty India (supra) pronounced; its judgement on 22.09.2006 whereas the assessee filed its return of income on 30.10.2006 i.e. later than the judgement of the Hon'ble High Court. It was incumbent upon the assessee to follow the decision of the jurisdictional High Court and ought not to have claimed deduction under section 10B of the Act on the incentive given by the Government. The decision of Hon'ble Punjab & Haryana High Court is binding on the assessee from the date of the order. Further, ITAT had also decided the issue in favour of the revenue, that means issue was already settled against the assessee. The assessee could have filed the revised return which has not been done in this case. Since the assessee has taken conscious risk for taking such a claim, therefore, penalty could be imposed under section 27....
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....4.2001 under Section 254 of the Act, which was received by the Commissioner of Income Tax on 16.07.2001 and, therefore, applying the provision of Section 275(l)(c) of the Act the period of limitation was extended till 31.03.2002 and, before the expiry of this period, the impugned penalty order was passed on 31.01.2002, hence, it was within the period of limitation. Having heard the learned counsel for the appellant, we are of the opinion that the period of limitation prescribed under Section 275 of the Act is apparently clear, namely, that the order of penalty must be passed within six months from the end of the month in which the appellate order is received. The said order of the Tribunal was received by the Commissioner of Income Tax on 28.06.1999. Six months would expire on 31.12.1999. The period of limitation cannot be extended merely because an application under Section 254 of the Act was filed by the assessee. The Department cannot take advantage of the filing of the application by the assessee-. There was no embargo upon the Assessing Officer in not completing the penalty proceedings within the period of limitation. The decisions cited by the learned counsel for the Depar....
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....Miscellaneous Application by the Tribunal. The ld. DR submitted that the order is passed within the period of limitation by the ld. Pr. CIT on 09.02.2015. 7(ii) The ld. DR further contended that the assessee requested the Pr. CIT to keep the penalty proceedings in abeyance since Miscellaneous Application is pending before the Tribunal. Therefore, ld. counsel for the assessee has no moral ground to raise this issue with regard to time barred order passed by the Pr. CIT on the penalty order. The ld. DR, therefore, submitted that the penalty order has been passed within the period of limitation. 8. We have considered rival submissions. The dates of passing of the orders by the CIT under section 263, order passed by the Tribunal and order passed in the Miscellaneous Application, have not been disputed by the parties. The dates intimated by the ld. DR after verification of the record with regard to receipt of the order of the Tribunal by CIT-2 on various dates have also not been disputed as mentioned above. Section 275 of the Income Tax Act provides as under : 275. [(1)] No order imposing a penalty under this Chapter shall be passed- [(a) in a case where the relevant assessment or o....
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....ore the order of the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by the [Principal Chief Commissioner or] Chief Commissioner or the [Principal Commissioner or] Commissioner or the order of revision under section 263 or section 264 is passed, an order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty may be passed on the basis of assessment as revised by giving effect to such order of the Commissioner (Appeals) or, the Appellate Tribunal or the High Court, or the Supreme Court or order of revision under section 263 or section 264: Provided that no order of imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty shall be passed- (a) unless the assessee has been heard, or has been given a reasonable opportunity of being heard; (b) after the expiry of six months from the end of the month in which the order of the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by the [Principal Chief Commissioner or] Chief Commissioner or the [Principal Commissioner o....
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....arly time barred since it can be levied only within six months from the end of the month of the original order of ITAT received by CIT. 8(ii) The ld. DR, however, contended that according to Section 254, the orders passed u/s 254(1) and 254(2) shall have to be considered for the purpose of limitation. We do not agree with submission of ld. DR because Section 254(1) provides for passing of the order by the Tribunal as it thinks fit. However, in Section 254(2), the Tribunal in order to rectify any mistake apparent from the record, may amend any order passed by it under sub-section (1) of Section 254 of the Act. Therefore, Section 254(2) provides for rectification of the original order passed under section 254(1) of the Act. This important distinction could not be ignored while referring to the provisions of Section 275 of the Act. The contention of ld. DR has also been answered against the Revenue by Hon'ble Allahabad High Court in the case of CIT-II Kanpur Vs M/s K.M.Sugar Mills Ltd., Kanpur (supra). In this case, the issue was identical as have been argued by ld. DR and the Hon'ble High Court held that the period of limitation cannot be extended merely because an applicati....
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....of Liberty India (supra). He has also referred to decision of ITAT (Special Bench) Indore in the case of Maral Overseas Ltd. 16 ITR (Tribunal) 565 (Indore) in which it was held that, "Once an income forms part of the business of income of eligible undertaking of the assessee, the same cannot be excluded from the eligible profits for the purpose of computing deduction under section 10B of the Act". The ld. counsel for the assessee, therefore, submitted that the issue is clearly debatable and on such facts, it could not be held that assessee furnished inaccurate particulars of income. The ld. counsel for the assessee further submitted that the assessee preferred appeal against the order of the Tribunal before Hon'ble Punjab & Haryana High Court and appeal of the assessee has been admitted on substantive question of law. Copy of the order of the High Court is also filed. The ld. counsel for the assessee, therefore, submitted that since two views have been taken on the matter and it is debatable issue, therefore, no penalty should be imposed against the assessee. 11. On the other hand, ld. DR relied upon impugned order and submitted that on the date of filing of the return by asse....
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....early show that on the date of filing of the return by assessee on 30.10.2006, the assessee may not be knowing nicety of two provisions of law and two different questions of law considered in the case of Liberty India (supra) and in the case of the assessee. Therefore, nothing can be inferred against the assessee that assessee has furnished inaccurate particulars of income in the return of income. The order of the CIT under section 263 was passed on 24.03.2011 after filing of the return by the assessee and the order of the Tribunal was also pronounced on 03.01.2014 i.e. after filing of the return by the assessee. The Tribunal in its order dated 03.01.2014 has considered the incentives in the case of the assessee to be on similar Scheme as have been granted on account of Duty Draw Back/DEPB. Therefore, it is difficult to believe that on date of filing of return on 30.10.2006, the assessee would be knowing the nicety of law for the purpose of claiming deduction under section 10B of the Income Tax Act. Further, the assessee has declared all the particulars of claim made for deduction under section 10B in the return of income which may not be acceptable to the revenue on having a diffe....