2022 (6) TMI 646

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....e submitted that the return of income filed by the assessee on 30.09.2011 declaring income of Rs.26,56,590/- be considered as the return filed in response to notice under section 142(1) of the I.T. Act, 1961. Thereafter, the case was taken-up for scrutiny and assessment was framed under section 143(3) vide order dated 28.03.2013 and the total income of the assessee was determined at Rs.84,05,446/- inter alia, by making the addition of Rs.44,50,000/- on account of unaccounted cash and addition of Rs.26,080/- on account of deferred revenue expenditure apart from other disallowances/additions. On the aforesaid disallowances/additions made, A.O. vide penalty order dated 30.03.2016 imposed penalty of Rs.14,86,842/- under section 271(1)(c) of the I.T. Act, 1961. 2.2. Aggrieved by the order of the A.O. assessee carried the matter in appeal before the Ld. CIT(A) who vide order dated 30.05.2017 in Appeal No.82/16-17 granted partial relief to the assessee. 3. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal and has raised the following grounds : 1. "The Learned CIT(A) erred in fact and in law in confirming the penalty on an addition o....

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....h of Rs.44,50,000/-, it was submitted that it pertains to cash sale of sugar of assessee company and the said cash sale was recorded in the books of account and the sales were also reflected in the copy of the sales tax return. 5.1. After considering the submissions of the assessee, the A.O. made addition of Rs.44,50,000/- under section 69A of the I.T. Act, 1961 as according to the A.O. assessee had not given any satisfactory answer. On the aforesaid addition A.O. had levied the penalty under section 271(1)(c) of the I.T. Act, 1961. 5.2. The Learned A.R. submitted that when the matter levy of penalty under section 271(1)(c) of the I.T. Act was carried before the Ld. CIT(A), the Ld. CIT(A) at page-7 of the order deleted the penalty by holding that A.O. had erroneously applied the provisions of section 271(1)(c) of the I.T. Act, 1961, but, however the Ld. CIT(A) vide para-4.2 of the order directed the A.O. to issue notice under section 271AAA of the I.T. Act, 1961 for levy of the penalty. 5.3. The Learned A.R. submitted that as per the provisions of Section 271AAA of the I.T. Act, 1961, the discretion for levy of penalty rests only with the Assessing Officer ("A.O.") and as ....

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....of penalty under section 271AAA is also barred by limitation as prescribed under section 275 of the I.T. Act, 1961 and, therefore, void abinitio. He submitted that as per the provisions of Section 275(1)(b) of the I.T. Act, 1961, the order of penalty could have been passed latest by the expiry of the financial year in which the proceedings in the course of which action for imposition of penalty has been initiated or completed i.e., latest by 31.03.2013 or within one year from the end of the financial year in which the order of the Commissioner (Appeals) was received by Principal Chief Commissioner i.e., by 31.03.2016. He submitted that the order passed by the Ld. CIT(A) on 30.05.2017 being beyond the prescribed date, it is, therefore, barred by limitation and thus, void abinitio. He, therefore, submitted that direction for levy of penalty by the Ld. CIT(A) under section 271AAA is bad in law and, therefore, be set aside. 6. The Ld. D.R. on the other hand supported the orders of the lower authorities and with respect to direction given by the Ld. CIT(A) for levy of penalty under section 271AAA, he submitted that it was within the powers of Ld. CIT(A) to give necessary directions a....

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....igh Court has held that it is not open to the First Appellate Authority i.e., Ld. CIT(A) to set aside the order of the A.O. and order a remand or to give any directions. The relevant findings of Hon'ble Kerala High Court reads as under : "5. Section 251(1)(a) deals with the power of the first appellate authority in disposing of an appeal against an order of assessment. The appellate authority may confirm, reduce, enhance or annul an assessment. He may also set aside the assessment and refer the case altogether to the Assessing Officer for making a fresh assessment and he can also issue directions in that behalf. Section 251(1)(b) deals with an appeal against an order imposing penalty. Therein the only powers given to the appellate authority are that he may either confirm the order or he may cancel such order or he may vary it either by enhancing the penalty or reducing it. Under section 251(1)(c) cases not governed by clauses (a) and (b) can be dealt with wherein the appellate authority can pass such orders in the appeal as he thinks fit. Normally very vide discretion or jurisdiction is conferred on the first appellate authority under section 251(1)(c), in cases not coming....