9911796707
TMI Blog2009 (6) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... de which jurisdiction of the AO in levying the penalty u/s. 271(1)(c) has been challenged, deserves to be admitted. From the provisions contained in the proviso to sec 275(1)(a) it is crystal clear that if an order is passed by the CIT(A) on or after the 1st day of June, 2003 then an order imposing penalty shall be passed before the expiry of the financial year in which the proceedings in the course of which action for imposition of penalty has been initiated, are completed or within one year from the end of the financial year in which the order of the CIT(A) is received whichever is later. Here, CIT(A) passed the order on 11th March, 2005, the penalty proceedings were initiated by the AO in March, 2004 when the assessment order was passed on 23rd March, 2004. The learned CIT(A) had passed the order dt. 11th March, 2005 so the penalty order was to be passed within one year from the end of the financial year in which the order of the CIT(A) was received by the AO. the appeal was filed by the Department in Tribunal in the month of May, 2005, therefore the order must have been received before the said date, hence the relevant financial year ended on 31st March, 2006, as such the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive objected for admission of the cross-objection and stated that there is no reasonable cause explained by the assessee for filing the cross-objection belatedly. 4. After considering the submissions of both the parties and the contents of the petition for condonation of delay, we are of the view that although the explanation given by the assessee may not be sufficient to condone the delay but the assessee may raise the legal issue as per r. 27 of the ITAT Rules, 1963 which provides as under : 27. The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him. 5. From the above provision it is clear that the respondent, though may not have appealed, may support the order appealed against on any of the grounds decided against him. In the instant case, the issue relating to the levy of penalty has been decided in favour of the assessee and the Department is in appeal, therefore the assessee may support the order appealed against him and in the present cross-objections, although belated a legal plea had been taken by the assessee which requires adjudication as per the provisions of r. 27 of the ITAT Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suo motu when it strikes to the Court during appeal proceedings. In this regard we refer to the decision of Hon ble Supreme Court in Union of India v. British India Corporation Ltd. Ors. (2004) 190 CTR (SC) 385 : (2004) 268 ITR 481 (SC). The facts in that case were : The assessee filed returns under the Business Profits Tax Act, 1947, for the chargeable accounting periods ending 31st Dec., 1946, 1947 and 1948 and 31st March, 1949, on 31st March, 1949, and provisional assessments were made under s. 13 on various dates between 27th Dec., 1948, and 22nd Jan., 1951. Thereafter, on 30th Dec., 1969, regular assessments were made under s. 12 for those chargeable accounting periods. The Tribunal set aside the regular assessments on the ground that they were barred by limitation. The High Court affirmed the decision of the Tribunal, on the ground that, though the provisions of the Business Profits Tax Act, 1947, contained no period of limitation within which the regular assessment had to be made under s. 12, such a period of limitation had to be read into the provisions of that Act on account of the prescription under r. 4A of the Business Profits Tax Rules which applied s. 50 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this provision and give effect to it even though the point of limitation is not referred to in the pleadings ..... Hon ble Supreme Court relied on the decision of Hon ble Privy Council in Maqbul Ahmad v. Onkar Pratap Narain Singh AIR 1935 PC 85. In Harish Uppal v. Union of India (from Delhi), Special Leave Petn. (C) No. 5087 of 1984, with Civil Misc. Petn. No. 34318 of 1985, dt. 30th March, 1994 reported in (1995) AIR SCW 108; while putting the burden of raising the issue of limitation on the parties to the dispute, it was held that it is a well-settled policy of law that the parties should pursue their rights and remedies promptly and not sleep over their rights. That is the whole policy behind the Limitation Act and other rules of limitation. If they choose to sleep over their rights and remedies for an inordinately long time, the Court may well choose to decline to interfere in its discretionary jurisdiction under Art. 226 of the Constitution of India. (para 8). Recently Hon ble Rajasthan High Court in Munir Mohammed v. Noor Mohammed AIR 2005 Raj 48 held similar view that the Court is bound to take into consideration the issue of limitation even if no objection is taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as under : 1.On p. 4 of his assessment order, the AO himself mentioned that there was a land in the names of partners in District Lucknow and copies of Khasra and Khatauni were filed on 20th Feb., 2004 and 8th Dec., 2003. 2.Since the land belonged to the partners, it was not in the balance sheet of the appellant firm. Copies of the purchase deeds of agricultural land appearing in the names of the partners were filed. 3.Expenses of ₹ 3,77,167 towards agricultural operations were allowed. This included payment of wages, pest control, electricity, tube-well which shows that agricultural operations were carried out. 4.The AO observed that there were sales of lilium flowers of ₹ 14.53 lakhs but purchase vouchers of only ₹ 4.22 lacs were produced thereby accepting that flowers were indeed grown. One voucher of purchase, some sale vouchers and certain expense details could not be filed. 5.It relies on the Hon ble Supreme Court s decision in the case of Sir Shadi Lal Sugar General Mills Ltd. Anr. v. CIT (1987) 64 CTR (SC) 199 : (1987) 168 ITR 705 (SC) and states that merely because the appellant agreed to an addition, is not an indication t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o to s. 275(1). 13. In his rival submissions, the learned Departmental Representative did not dispute the dates and events given by the learned counsel for the assessee however, submitted that the appeal was pending before the Tribunal so the limitation starts from the order of the Tribunal and not from the order of the CIT(A) received by the AO. He also submitted that the proviso to section cannot substitute the main section. It was contended that the ratio decidendi of a case was to be read in context of the facts which were present before the Hon ble judicial forum. Reliance was placed on the following case law : 1. Saci Allied Products Ltd. UP v. CCE (2005) 7 SCC 159; 2. CST v. H.M. Esufali H. M. Abdulali (1973) 90 ITR 271 (SC); 3. Union of India v. Dharamendra Textile Processors (2007) 212 CTR (SC) 432 : (2007) 295 ITR 244 (SC) and Union of India v. Dharamendra Textile Processors Ors. (2008) 219 CTR (SC) 617 : (2008) 14 DTR (SC) 114 : (2008) 306 ITR 277 (SC); 4. Ghodavat Pan Masala (India) (P) Ltd. v. Jt. CIT (2007) 108 TTJ (Pune) 905 : (2008) 305 ITR 246 (Pune)(AT); 5. SFC v. Jagdamba Oil Mills AIR 2002 SC 834. 14. In his rejoinder, the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were initiated by the AO in March, 2004 when the assessment order was passed on 23rd March, 2004. The learned CIT(A) had passed the order dt. 11th March, 2005 so the penalty order was to be passed within one year from the end of the financial year in which the order of the CIT(A) was received by the AO. In the present case the appeal was filed by the Department in Tribunal in the month of May, 2005, therefore the order must have been received before the said date, hence the relevant financial year ended on 31st March, 2006, as such the penalty order was to be passed upto 31st March, 2007. However, the AO has passed the penalty order levying the penalty under s. 271(1)(c) of the Act on 20th April, 2007 therefore, the penalty order passed was barred by limitation and does not survive. Accordingly, the plea taken by the assessee is allowed. 17. Since in ITA No. 647/Luck/2008 the Department has challenged the order of the learned CIT (A) for deleting the penalty and we have quashed the penalty order for another reason i.e., by considering the limitation period as provided in proviso to s. 275(1)(a) of the IT Act, in that view of the matter, we do not see any merit in the appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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