TaxTMI 
TaxTMI 
2023 (8) TMI 820
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.... of Rs. 23,28,690/- from Aman Chote Vyapari Sahakari Patsanstha, Ichalkaranji in the year under consideration and paid the same in cash, thereby, for violation of provisions u/s. 269SS and 269T, the penalty proceedings were initiated under show cause notice dated 11-03-2010. The assessee relied on the decision of this Tribunal in the case of Shri Gajanan M. Chimankar in ITA No. 1702/PUN/2004 contending that initiation of penalty is not maintainable in terms of the applicability of the provisions u/s. 275(1)(c) of the Act. The Addl. CIT held the finding of the Tribunal is not applicable, thereby, opined the non applicability of the provisions u/s. 275(1)(c) of the Act and imposed penalty u/s. 271D for an amount of Rs. 23,28,690/- vide its order dated 24-09- 2010. The assessee challenged the same before the CIT(A) contending that the penalty proceedings initiated by the Addl. CIT u/s. 271D of the Act was barred by limitation and placed reliance on the order dated 24-11-2017 of this Tribunal in assessee's own case in ITA No. 1238/PUN/2015 for penalty u/s. 271E of the Act. The CIT(A) considering the same held the facts of the present case are identical to the facts in the order dated 2....
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....n in the case of Hissaria Bros. (supra) and dismissed the appeal of Revenue by holding the penalty imposed therein u/s. 271E of the Act is barred by limitation. Further, we note that the appellant-revenue therein placed reliance on the said decision, but however, the Tribunal rejected its contention by observing that the appellant-revenue relied on part of paragraph of the said judgment but not referred to the judgment in total which is evident from para No. 16 at page No. 80 of the paper book. In view of the same, we shall reproduce the relevant part, wherein, the Hon'ble High Court of Rajasthan was pleased to examine the question No. 1 framed therein. "18. In view of the above finding in which in our opinion the Tribunal was right and which is not also under challenge by the Revenue that the present transactions were governed by the Central Board of Direct Taxes circular referred to above and did not invite the provisions of Sections 269SS and 269T and consequently no penalty was imposable under Sections 271E and 271D, now we propose to examine the issue involved in question No. 1. 19. In the facts and circumstances noticed above, the Tribunal has held the penalty orders to b....
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.... of this section- (i) the time taken in giving an opportunity to the assessee to be reheard under the proviso to Section 129; (ii) any period during which the immunity granted under Section 245H remained in force ; and (iii) any period during which a proceeding under this Chapter for the levy of penalty is stayed by an order or injunction of any court. 22. It would not be out of place to consider the relevant legislative history of the provision in question for the present purposes. 23. Under the Income-tax Act, 1961 as originally enacted, no limitation was prescribed for completion of the penalty proceedings. However, considering that there should not be any inordinate delay in imposing penalty and to streamline the levy of penalty within reasonable time in the Act of 1961, Section 275 was enacted as a new provision for regularising imposition of penalty. It is pertinent to notice that if at the relevant time when the scheme for levy of penalty was enacted in the 1961 Act, the case in which the penalty was envisaged under Chapter XXI, the penalty proceedings were required to be initiated during the course of relevant assessment proceedings or its appellate proceedings by....
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.... appeal before the Appellate Tribunal. Sometimes, a final decision on the quantum of the concealed income becomes available only after the expiry of the two-year time limit. 25. Section 275 as substituted aims at obviating difficulties in such cases, reducing avoidable work and avoiding hardship to the assessees. It provides that the time-limit for making an order imposing a penalty under the provisions of Chapter XXI of the Income-tax Act will, ordinarily, be two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed. However, in a case where the relevant assessment or other order is the subject-matter of an appeal to the Appellate Assistant Commissioner or an appeal by the Income-tax Officer to the Appellate Tribunal, the time limit for completing the penalty proceedings will be either the two-years period as stated above or a period of six months from the end of the month in which the order of the Appellate Assistant Commissioner or, as the case may be, of the Appellate Tribunal is received by the Commissioner, whichever period expires later. It may be noted that the two year ....
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....d or six months from the end of the month in which the order of the Deputy Commissioner (Appeals) or the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner whichever period expires later. 30. The period of limitation for the cases falling under Category (II) is six months from the end of the month in which such order on revision is passed and the period of limitation for the cases falling under the above Category III is 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 last category filing of appeal in respect of order passed in proceedings during which penalty proceedings were initiated is not relevant. 31. To this effect, a Circular No. 551 dated January 23, 1990 see [1990] 183 ITR (St.) 7 and another Circular No. 554 dated February 13, 1990 (see [1990] 183 ITR (St.) 130) were issued by the Central Board of Direct Taxes. 32. A close scrutiny of Section 275 which reproduced hereinab....
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.... can be initiated only when the default is brought to the notice of the concerned authority which may be during the course of any proceedings and, therefore, for this type of cases where the penalty proceedings have been initiated in connection with the defaults for which no statutory mandate is there about any particular proceedings during the course of which only such penalty proceedings can be initiated, a different period of limitation has been prescribed under Clause (c) as a separate category. In cases falling under Clause (c) penalty proceedings are to be completed within 6 months from the end of the month in which the proceedings during which the action for imposition of penalty is 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. There is no provision under Clause (c) for the extended period of limitation commensurating with completion of the appellate proceedings if any arising from the proceedings during the course of which such penalty proceedings are initiated as in the case where the penalty proceedings are linked with the assessment proceedings or the other relevan....
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....ature of deposits and invoked the provisions of Section 269SS to the amount received and for repayment u/s. 269T of the Act. As a result of the same, initiated penalty proceedings u/s. 271D and 271E of the Act. The CIT(A) cancelled the penalties holding the instance to be known as balancing of accounts. The Tribunal found, on the question of limitation that the order of penalty should have been passed within 6 months from the end of the month in which the assessment was completed and held that since all the penalty orders were passed beyond 6 months from the end of the month in which assessments were completed, the penalty orders were barred by time. The Hon'ble High Court held that the transaction in question retention of sale price by the kachha adhatiya did not amount to deposit and its utilisation and dealing with it at the instance of farmer constituents did not amount to repayment of loan or deposits within the meaning of Section 269SS or Section 269T and as such the limitation u/s. 275(1)(c) applies to such proceedings. 8. Further, discussed the relevant legislative history of the provisions u/s. 275 of the Act for the present purpose, wherein, was pleased to observe by the....
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.... in the case of Hissaria Bros. (supra) vide its decision dated 22-08-2016 reported in (2016) 386 ITR 719 (SC). 10. In view of the decision of Hon'ble High Court of Rajasthan in the case of Hissaria Bros. (supra), for better understanding, for ready reference the provisions u/s. 275(1)(c) of the Act relevant to F.Y. 2007 (31-07-2007) is reproduced here-in-below : "Bar of limitation for imposing penalties. 275. (1) No order imposing a penalty under this Chapter shall be passed- (a) in a case where the relevant assessment or other order is the subjectmatter of an appeal to the Commissioner (Appeals) under section 246[or 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 : [Provided that in a case where the relevant assessment or other order is the subject-matter of an appeal to th....