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TMI Blog2016 (2) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... est payment, unexplained investment in jewellery, bogus sundry creditors. Therefore, the A.O. after considering the non-filing of the above details and held that the assessee has concealed the income and came to a conclusion that it is a fit case to levy the penalty and accordingly penalty has been levied. We find that the assessee has not filed details in respect of the interest payment, unexplained investment in jewellery, sundry creditors. Therefore, by filing inaccurate particulars, the assessee has concealed the income. In the present case, section 271(1)(c) of the Act attracts on both the counts i.e. concealment of particulars of income and furnishing inaccurate particulars. Therefore, the penalty levied by the A.O. is justified and the notice issued by the A.O. cannot be said that a vague notice. - Decided against assessee - I.T.A.Nos.273 to 278/Vizag/2013 - - - Dated:- 28-1-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Shri I. Kama Sastry, AR For The Respondent : Shri M.K. Sethi and Shri T.S.N. Murthy, DRs ORDER PER V. DURGA RAO, Judicial Member: These appeals are filed by the assessee agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quested to keep the penalty proceedings in abeyance till the disposal of the appeal by the ITAT. The A.O. has again issued a letter dated 10.3.2011 by calling explanation from the assessee. The assessee has reiterated what he stated earlier that to keep the proceedings in abeyance till ITAT passes an order. 7. The A.O. after considering the explanation given by the assessee he has observed that the assessee simply sought time to defer the penalty proceedings till disposal of the assessee s appeal except that assessee has not offered any explanation on merits of the case. With the above observation, he has initiated the penalty proceedings by observing that it is clear that the assessee has resorted to concealment of income of undisclosed interest payment of ₹ 80,000/-, unexplained investment in jewellery worth ₹ 2,47,449/- and disallowance of 40A(3) payment of ₹ 60,000/- which were ultimately assessed to tax which attracts penalty provisions of section 271(1)(c) of the Act and accordingly penalty is levied. The assessee carried the matter in appeal before the CIT(A) by raising the following grounds: 1. The penalty proceedings have not been initiated as requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trading Company Pvt. Ltd. (2011) 245 CTR (Delhi) 312 and submitted that the Delhi High Court wherein a paragraph 10 of the order, it has been held that the proviso thus carves out an exception from the main section in as much as in case where no appeal is filed before the Tribunal. The A.O. must impose penalty within a period of 6 months to be reckoned from the date of the receipt of penalty order by the CIT(A). He further submitted that from the ratio laid down by the Hon ble Delhi High Court, it is implied that in a case where the order is subject matter of the further appeal to the Tribunal, the penalty order must be passed within 6 months from the end of the month in which the order of the CIT(A) is received by the CIT or Chief CIT. Since in the instant case, the order of the imposing penalty has been passed beyond 6 months from the end of the month in which the order of the CIT(A) has been received by the CIT, the same is barred by limitation. 9. The Ld. CIT(A) has considered the arguments of the Ld. Counsel for the assessee and also the judgement of the Hon ble Delhi High Court and observed that the proviso to section 275(1)(a) of the Act extends the period of imposing pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following grounds: 1. The Ld. CIT(Appeals) is not correct in rejecting the plea of the assessee that the order passed by the AO under section 271(1)(c) is barred by limitation. 2. The penalty order u/s 271(1)(c) has been passed totally on the basis of findings in the assessment order and findings in the CIT(A) order without independent findings for the levy of penalty though the penalty proceedings are independent of assessment proceedings, hence, the order passed u/s 271(1)(c) is invalid. 3. The penalty order u/s 271(1)(c) has been passed by the Ld. AO without giving reasonable opportunity to the assessee as required under section 274. 4. The Ld. CIT(Appeals) is not correct in directing the AO to levy penalty with respect to additions confirmed by the Honourable Tribunal without even considering the submissions made by the assessee on merits. 5. The appellant craves leave to amend, alter or delete any of the above grounds of appeal. The assessee has also raised the following additional grounds: 1. The notice issued under section 274 r.w.s. 271(1)(c) dated 18.12.2007 is vague and hence the same is invalid. Hence, the order passed in consequence of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. We have heard both the parties, perused the records, gone through the orders of the authorities below. The issue involved in this appeal is whether the extended period of one year by the proviso inserted to Finance Act, 2003 is available to the assessing officer in the case of order passed by CIT(A) and further appeal has been preferred before the Tribunal? In this case the CIT(A) passed an order on 30.3.2010. The CIT received the order of the Ld. CIT(A) on 20.4.2010 and the penalty order is passed by the A.O. on 31.3.2011. The arguments of the Ld. Counsel for the assessee is that the A.O. ought to have passed a penalty order i.e. on or before 31.10.2010 for the reason that as per section 275(1)(a) of the Act, the A.O. has a power to pass a penalty order within the period of 6 months from the date of receipt of order from CIT(A) by CIT. Therefore, in this case, the A.O. passed an order after 6 months as per the judgement of the Delhi High Court, in the case of CIT Vs. Mohair Investments Trading Company Pvt. Ltd. (supra), once an appeal is preferred against the order of the CIT(A), the proviso has no application. Therefore, the order passed by the AO beyond 6 months, howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncipal Commissioner or Commissioner of Income-Tax, whichever period expires later. The legal position has been changed after 1.6.2003 by virtue of inserting the Finance Act, 2003 (as per section 275(1)(a) of the Act, proviso thereto). The A.O. can pass the penalty order on or before the expiry of the one year from the end of the financial year in which the order of the CIT(A) is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner of Income Tax, whichever period expires later. The proviso inserted by the Finance Act, 2003 w.e.f. 1.6.2003 the extended period of limitation to pass the penalty order extended by the proviso, from 6 months to one year in the case where the A.O. decided to pass the penalty order without waiting the ITAT order if at all appeal is preferred. So far as limitation period in respect of appeal preferred against the order of the CIT(A) to the Tribunal, the main provision already prescribed a time limit of 6 months. Therefore, the proviso only deals with the extended period of limitation to pass a penalty order from 6 months to one year, in the case of the order of CIT(A). Therefore, in our opinion, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove. In view of the above, we find that the Ld. CIT(A) has rightly held that the penalty order passed by the A.O. within the period of limitation i.e. within 1 year as per the proviso to section 275(1)(a) of the Act. Thus, we uphold the order of the CIT(A). This ground of appeal raised by the assessee is dismissed. 17. The additional grounds raised by the assessee before us and submitted that the same may be admitted and decided, which is extracted as under: 1. The notice issued under section 274 r.w.s. 271(1)(c) dated 18.12.2007 is vague and hence the same is invalid. Hence, the order passed in consequence of such an invalid notice is void ab initio. 2. The initiation of proceedings is not as per law, the satisfaction of the AO regarding concealment of income or furnishing of inaccurate particulars of income is not discernible from the assessment order. The mere noting that penalty proceedings are initiated separately will not amount to direction as mandated by the provisions of section 271(1B). 3. Detailed submissions will be made at the time of actual hearing. 18. In so far as above additional ground raised by the assessee is concerned, we find that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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