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TMI Blog2018 (5) TMI 1593X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent : Shri Miraj D Shah, AR ORDER Per M.Balaganesh, AM 1. This is an appeal filed by the revenue against the order of Learned Commissioner of Income Tax (Appeals) 8, Kolkata [in short the ld CITA] in Appeal No. 98/2014-15 dated 19.4.2016 for the Asst Year 2008-09 deleting the penalty levied under section 271E of the Income-tax Act, 1961 (hereinafter referred to as the Act ) by the Learned Joint Commissioner of Income Tax, Range 29, Kolkata [in short the ld AO]. 2. At the outset, there is a delay of 3 days in filing of appeal by the revenue before us which is supported by the condonation petiton and on going through the reasons stated therein, we are inclined to condone the delay and admit the appeal of the revenue for adjudication. 3. The only issue to be decided in this appeal is as to whether the ld CITA was justified in deleting the penalty levied u/s 271E of the Act in the facts and circumstances of the case. 4. The brief facts of this issue are that the assessee is a partnership firm and had filed its return for the Asst Year 2008-09 on 27.9.2008 declaring total income of ₹ 6,854/-. The assessment was completed u/s 143(1) of the Act. Later on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- a) that the initiation of proceedings u/s 148 itself was bad in law. b) that no purported order of assessment u/s 147 / 143(3) was ever received / served. c) that the initiation of the penalty proceedings was bad in law. d) that even otherwise, the impugned penalty had already been barred by the limitation. The ld JCIT however did not heed to the aforesaid contentions of the assessee and proceeded to levy penalty on the entire repayment of loans to partner made in the sum of ₹ 11,39,932/- during the year, out of which, a sum of ₹ 5,10,000/- was repaid by account payee cheques. Before the ld CITA, it was pleaded that reassessment was completed by the ld AO on 16.5.2011 at which point of time, penalty proceedings u/s 271D of the Act were initiated by the ld AO framing the re-assessment. But the show cause notice for the penalty u/s 271D of the Act was issued only on 5.12.2012 and served on the assessee on 6.12.2012. The assessee objected to the fact that it had not violated the provisions of section 269SS of the Act and hence penalty u/s 271D of the Act is not leviable. Later the ld JCIT on realizing his mistake, issued show cause notice u/s 271E of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake of convenience, the provisions of section 275(1)(c ) of the Act are reproduced below:- 38[Bar of limitation for imposing penalties. 275. 39[(1)] No order imposing a penalty under this Chapter shall be passed- 40[(a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the 41[***] Commissioner (Appeals) under section 246 42[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 completed43, or six months from the end of the month in which the order of the 44[***] Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the 45[Principal Chief Commissioner or] Chief Commissioner or 45[Principal Commissioner or] Commissioner, whichever period expires later : 46[Provided that in a case where the relevant assessment or other order is the subject-matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A, and the Commissioner (Appeals) passes the order on or after the 1st day of June, 2003 disposing of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings and not from the date of assessment order. The operative portion of the said judgment is as under:- 11. The only case of the assessee is that if the period of limitation prescribed in Section 275(1)(c) is reckoned from the date of the assessment order dated 6.11.2007, the penalty order passed by the Joint Commissioner on 29.7.2008 is beyond the time permitted in the above section. As we have already held, the initiation of the penalty proceedings is not by the Assessing Officer but by the Joint Commissioner and if that be so, the order levying penalty passed by the Joint Commissioner is within the time prescribed in Section 275(1)(c). We find that the Hon ble Jurisdictional High Court in the case of CIT vs Narayani and Sons (P) Ltd in ITA No. 76 of 2009 dated 28.7.2016 reported in 2016 (9) TMI 449 (Calcutta High Court) after considering the decision of Hon ble Kerala High Court supra had held as under:- Md. Nizamuddin, learned Advocate appearing in support of the appeal drew our attention to a judgment of the Kerala High Court in the case of Grihalakshmi Vision vs. Additional Commissioner of Income Tax reported in (2015) 379 ITR 100 (Kerala), wherein the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on May 28, 2004 was clearly hit by the bar of limitation and has rightly been set aside in the orders impugned. In view of the above, our answer to the formulated question of law is that even when the authority competent to impose penalty under section 271D was the Joint Commissioner, the period of limitation for the purpose of such penalty proceedings was not to be reckoned from the issue of the first show cause by the Joint Commissioner; but the period of limitation was to be reckoned from the date of issue of the first show cause for initiation of such penalty proceedings. For the purpose of present case, as observed hereinabove, for the proceedings having been initiated on March 25, 2003, the order passed by the Joint Commissioner under section 271 0 on May 28, 2004, was hit by the bar of limitation. The Commissioner of Income-tax (Appeals) and the Tribunal have, thus, not committed any error in setting aside the order of penalty. Mr. Khaitan submitted that the aforesaid judgment was cited before the Kerala High Court but the Kerala High Court did not give any reasons as to why was the view taken by Rajasthan High Court not acceptable to the Hon'ble Division Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of ₹ 1000/-. A case involving penalty imposable exceeding a sum of ₹ 1000/- was required to be referred by him to the Inspecting Assistant Commissioner, who had the jurisdiction to impose penalty exceeding a sum of ₹ 1000/-. Question arose whether in a case involving penalty imposable exceeding a sum of ₹ 1000/-, the Assessing Officer could initiate the proceedings by issuing a notice. That question was answered by the Supreme Court in the affirmative. Their Lordships in the case of D.M. Manasvi vs. C.I.T., Gujarat. reported in [1972] 86 ITR 557, held as follows: We are also not impressed by the argument advanced on behalf of the appellant that the proceedings for the imposition of penalty were initiated not by the Income-tax Officer but by the Inspecting Assistant Commissioner when the matter had been referred to him under section 274(2) of the Act. The proceedings for the imposition of penalty in terms of sub-section (7) of section 271 have necessarily to be initiated either by the Income-tax Officer or by the Appellate Assistant Commissioner. The fact that the Income-tax Officer has to refer the case to the Inspecting Assistant Commissioner i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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