TaxTMI 
TaxTMI 
2018 (2) TMI 1533
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....uty Commissioner, assessed loss at Rs.4,61,38,973/-. The AO made a computation of the book profits of the appellant determining its liability at Rs.1,42,112/- on the determining the book profits at Rs.4,73,706/-. The assessee preferred an appeal to the Commissioner (Appeals) which was decided on 13.12.1993 partly allowing its contentions. The assessee accepted the decision - it had partly allowed the appeal but sustained some additions. This order was served on the assessee, on 21.01.1994. While so, the AO issued notice under Section 271 (1) (c) of the Act calling upon it to show cause why penalty should not be imposed for concealment of income. The assessee resisted the proceedings arguing, among other things, that penalty proceedings were barred in view of Section 275 (1) (a) of the Act as a valid penalty could be imposed within six months of the end of the month in which the order of the CIT (A) was received by the AO. It was argued that the CIT (A)'s order was made on 30.12.1993 and received on 21.01.1994 by the assessee; consequently the penalty proceedings could have culminated in a valid order by 31.07.1994. The initiation of penalty proceedings by notice of 12.08.1997 was w....
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....ore the ITAT cannot be taken cognizance of as the said appeal was withdrawn by the Department. Therefore, the penalty order imposing a penalty of Rs. 12,74,680/- is cancelled as the same has been passed beyond the limitation date." 4. The revenue further appealed to the ITAT; the assessee relied upon Circular No. 367 dated 26.07.1983 issued by the CBDT and also some judicial authorities. The ITAT set aside the CIT(A)'s order, reasoning as follows: "In the present case, the assessee did not file any appeal to the Tribunal against the order of the CIT(A). It was the department which filed an appeal to the Tribunal. Now, obviously the penalty is being imposed only with reference to the additions or disallowances that were sustained by the CIT(A) against which the assessee did not file any appeal to the Tribunal. The assessee's contention is that the appeal filed by the department having been withdrawn, it is as if no appeal was even filed against the order of the CIT(A). There is obviously no question of any penalty being levied with reference to the amounts deleted by the CIT(A). The department first filed an appeal against the relief granted by the CIT(A), but later withdrew t....
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....he provision required is that the order of the CIT(A) present case. What happens later is of no consequence. The withdrawal of the appeal in such a situation cannot amount to the department not filing an appeal at all since factually there was an appeal pending before the Tribunal. Though, it was permitted to withdrawn later by an order. In the present case, there was an order passed by the Tribunal permitting the department to withdraw the appeal. This in our view is an order the power to pass which is traceale only to Section 254(1). The period of limitation in our opinion, available to the AO u/s 275(1)(a) is a period of six months from the date on which the order of the Tribunal permitting the withdrawal was received by the department. In this view of the matter, we are unable to agree with the assessee that the penalty order is beyond the period of limitation." 5. The assessee urges that the ITAT failed to appreciate that the mere filing of the appeal to the ITAT and its withdrawal was never made known to it and, therefore, that circumstance could not be said to constitute a valid "pending" proceeding. Learned counsel for the assessee relied upon the text of Section 275(1) ....
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....eal an opportunity of being heard, pass such order thereon as it thinks fit." XXXXXX XXXXXX XXXXXX 275(1) No order imposing a penalty under this chapter shall be passed- (a) in a case where a relevant assessment or other order is the subject matter of an appeal to the Commissioner (Appeals) under Section 246 (Section 246A) or an appeal to the Appellate Tribunal under Section 253, 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 the order of the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner, whichever period expires later." 9. In this case, it is a matter of record that the revenue's appeal was never heard; no effective proceedings were held nor was any order made. Equally, the assessee was never notified about the filing of the appeal, its pendency or even its withdrawal. In B.N. Bhattacharjee, (supra), the Supreme Court was confronted with a case where the appeal to the ITAT was filed, and later withdrawn. These facts were sought to be pu....
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....hat it was filed after the prescribed time, the order could not be said to be the subject of an appeal. Section 33 also supports the said view. Under Section 33 (1) an assessee can prefer an appeal within 60 days and Sub-section (2-A) empowers the Tribunal to admit an appeal even after 60 days if it is satisfied that there was sufficient cause for not presenting it within the period. This clearly indicates that till such order was made, the appeal was not admitted and, therefore, it must be treated as not having been legally on the file of the Tribunal. Decided cases also support my view. In Baya Reddi v Gopala Rao (1933) 66 M.L.J. 486 : I.L.R. 57, Mad. 741 a question arose as regards the construction of the words " There has been an appeal " within the meaning of Article 182 (2) of the Indian Limitation Act. The words " There has been an appeal " are obviously wider in scope than the words " the subject of an appeal." Even, so, Madhavan Nair, J., (as he then was) held that where an appeal memorandum presented to the High Court, was rejected as being out of time, there was no appeal to the Court within the meaning of Article 182 (2). The learned Judge accepted the argument that ....