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TMI Blog2023 (5) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue : Ms Monisha Choudhary (Addl. CIT) ORDER PER: SANDEEP GOSAIN, J.M. This appeal by the assessee is directed against the order of ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi dated 30.08.2022 for the assessment year 2015-16. The assessee has raised the following grounds of appeal :- 1. The impugned penalty order u/s 271D dated 28.05.2019 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed. 2. Rs. 47,50,000/-: The ld. CIT (A) erred in law as well as on the facts of the case confirming the penalty imposed u/s 271D of the Act. The penalty so imposed by the AO and confirmed by the ld. CIT (A) being totally contrary to the provisions of law and facts kindly be deleted in full. 3. The ld. CIT (A) erred in law as well as on the facts of the case in passing the impugned order in a haste without affording adequate and reasonable opportunity of being heard. The impugned order having been framed in gross breach of natural justice, hence the same kindly be quashed or alternatively be restored to the file of the ld. CIT (A). 4. The appellant prays your honour indulgence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was beyond the control of the assessee for accepting cash loans. In the view of the above discussion, it is apparent that the assess has violated the provisions of section 269SS by accepting cash loans of Rs 47,50,000/- instead of account payee cheque or demand draft from the various persons. Thus, this is a fit case for imposing penalty u/s 271D of the I.T. Act 1961 levied for default so committed. Aggrieved by the order of the AO, the assessee preferred appeal before ld. CIT (A). The ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi, confirming the order of the AO, dismissed the appeal of the assessee. 3. Now the assessee is in appeal before the Tribunal. The assessee has also raised an additional ground, which is purely legal, as under and relying on the decision of Hon ble Supreme Court in the case of National Thermal Power corporation Ltd., 229 ITR 383 (SC) prayed admission of the same : Additional Ground : That the impugned penalty order dated 28.05.2019 passed by the ld. JCIT Range-7 Jaipur is clearly barred by limitation u/s 275(1)(c) of the Act and therefore the same deserves to be quashed. 4. After hearing both the parties, I am con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is very clear and this contention is fully supported by decisions of Hon ble Rajasthan High Court. 1.2.1. JCIT Vs. Jitendra Singh Rathore [2013] 352 ITR 327(Raj)(DPB 1-4) held as under: Penalty under s. 271D Limitation under s. 275 Applicability of cl. (a) or cl. (c) of s. 275(1) Show-cause notice was served on the assessee by AO on 27th March, 2003 Thereafter, the matter was referred to the Jt. CIT on 22nd March, 2004 Penalty levied by Jt. CIT by order dt. 28th May, 2004 was clearly barred by limitation Sec. 275(1)(c) was applicable to the case Even when the authority competent to impose penalty under s. 271D was the Jt. CIT, the period of limitation for the purpose of such penalty proceedings was not to be reckoned from the issue of show cause by the Jt. CIT, but the period of limitation was to be reckoned from the date of issue of first show cause for initiation of such penalty proceedings . 1.2.2.CIT Vs. Hissaria Brothers [2016] 386 ITR 719 (SC)(DPB 5-6): Penalty under ss. 271D and 271E Limitation under s. 275 Computation Penalty orders under ss. 271D and 271E passed beyond six months from the end of the month in which the assessments were completed were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for completing the penalty proceedings taking into consideration the various penalty proceedings for default of certain provisions of the Income-tax Act which are not necessarily linked with proceedings for any particular assessment year in the course of which only penalty proceedings were required to be initiated. Such consequences of default were not linked with the principal assessment proceedings for any specific assessment year but were independent of it. In view of the law settled by apex court, the impugned penalty deserves to be quashed as becoming barred by limitation. GOA 2: On Merits Impugned penalty without jurisdiction, this ground is on merit and submissions shall be made separately. GOA 3: No adequate opportunity 3.1 The ld. CIT(A) erred in law as well as on the facts of the case in passing the impugned order in a haste on dated 30.08.2022 without affording adequate and reasonable opportunity of being heard. The impugned order having been framed in gross breach of natural justice, kindly be quashed or alternatively be restored to the file of the ld. CIT(A), as would appear from the following date chart: Chart Showing Different notices and compli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at that time and activities did not resume with full force and it was only in March 2022, the normalcy could have been said to be restored as evident from the order of Apex court passed on dated 23.03.2020 in Suomotu Writ Appeal (Civil) No. 3 of 2020 on the issue of law of limitation holding as under: The period from 15-3-2020 till 28-2-2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. In the meanwhile, the Central Government was continuously relaxing the time limits for taking actions/making compliance through TOLA. In these circumstances there appears no justified reason at all as to why the ld. CIT(A) was issuing notices for such a short period of 7-10 days only. Also there was no urgency to pass the appellate order hastily and that too completely ignoring huge amount of penalty i.e., 47,50,000/- imposed merely on technical ground. Therefore, there is no hesitation to say that the ld.CIT(A) just to show a disposal on his part, passed the impugned order in complete disregard to principles of natural justice i.e., Audi alterampartem. Hence, to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal by the Assessee or due to the Assessee seeking to withdraw the appeal or if the assessee does not press the appeal. When the Commissioner (Appeals) dismisses the appeal of assessee in limine for non-prosecution of appeal by the assessee; in effect, indirectly it leads to same results as withdrawal of appeal by assessee. When the assessee is not permitted to withdraw the appeal filed before the first appellate authority, the first appellate authority is duty bound to not allow a situation to arise, through dismissal of appeal in limine for non-prosecution of appeal before the first appellate authority; in which, in effect, indirectly the same results are obtained as arise from withdrawal of appeal by the assessee. What cannot be permitted in law to be done directly, cannot be permitted to be done indirectly either, as is well settled. In view of the foregoing discussion; it is amply clear that Ld. CIT(A) was in error in dismissing the appeal in limine for non-prosecution of appeal by the assessee. We draw support from order of Hon'ble Bombay High Court in the case of CIT vs. PremkumarArjundasLuthra (HUF) [2016] 240 taxman 133 for the proposition that Ld. CIT(A) is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not open to the assessee in appeal to withdraw and/or the CTT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply dear from the Section 251(l)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act. 3.3.3 The decision of Shri Onkar Mal in ITA No. 1262/JP/2018 followed in Shri Ram Borewell Construction company V ACIT ITA No. 180/JP/2019 (DPB 7-10) it was held as: As per provisions of Section 250(6) of the Act, the ld. CIT(A) is required to pass a speaking order in writing giving reasons for reaching to the conclusion. However, the order passed by the ld. CIT(A) are not in terms of Section 250(6) of the Act. Therefore, in the substantial interest of justice, we set aside the ex parte order of the ld. CIT(A) and restore the matter back to the file of the ld. CIT(A) for deciding the issue afresh on merits. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACIT(TDS) (2014) 161 TTJ (Jp)(UO) 11(DPB 34-38) it was held as under: Penalty under s. 271C Limitation under s. 275(1)(c) Computation Proceedings for levying the penalty under s. 271C were initiated vide order dt. 19th March, 2009 which fell in the financial year 2008-09 ending on 31st March, 2009 and the action for imposition of penalty was initiated on 24th Dec., 2009 when the reference was made by the AO to the Addl. CIT (TDS) Accordingly, six months from the end of the month in which the action for imposition of penalty was initiated expired on 30th June, 2010 Hence, the order imposing penalty under s. 271C could have been passed on or before 30th June, 2010 Therefore, order levying penalty under s. 271C passed by the Addl. CIT on 18th Aug., 2010 was barred by limitation. 1.2.4 In Lodha Builders (P) LTD. vs. ACIT (2014) 163 TTJ (Mumbai) 778(DPB 29-33)it was held as under: Penalty under ss. 271D and 271E Limitation under s. 275 Applicability of cl. (a) or cl. (c) of s. 275(1) Provisions of s. 275(1)(c) only are attracted to levy of penalty under ss. 271D and 271E, and the provisions of cl. (a) of s. 275(1) are not applicable Further, the limitation period is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning liquor license. These facts are also affirmed by all those persons in their respective affidavits, which were admittedly filed before the AO were available before the ld. JCIT. The ld. JCIT has not at all disputed these facts in the impugned order. Once these are the admitted jurisdictional fact, there is no scope of imposition of penalty under section 271D of Income Tax Act, 1961 towards the contravention of provisions of section 269SS. As a condition precedent the ld. JCIT was bound to have established that it was a case of acceptance of loan or deposit by the assessee, then only, he could invoke section 269SS. However, in the present case, the assessee did not accept any loan or deposit but the amount was obtained as a capital contribution towards obtaining a liquor license. These facts were neither denied nor disputed. In view of the above facts, the present matter is out of scope of section 269SS read with section 271D of Income Tax Act, 1961. 2. This contention is directly supported by the following decisions: 2.1 Sunil Kumar Chirawa vs Addl. Commissioner of Income Tax, Jhunjhunu ITA No. 203 204/JP/2018 vide order dated 09.01.2019 (DPB 11-19) wherein it was hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the different persons. Hence, addition on that ground was made at all. In view of these undisputed facts, the subjected amount was rightly not held as undisclosed income/ the black money of the assessee which was the main object behind introducing these penalty provisions. Therefore, no penalty could be imposed u/s 271D of the Act. 1.2 Kindly refer 2.There did exists a reasonable cause in terms of section 273B of the Act in as much as the assessee is a layman poor villager, poorly literate, having no knowledge of the complexities of tax laws. He is not otherwise a regular assessee and having no exposure in past to income tax proceedings. It is settled that there is no presumption that everybody knows law as held in the case of M/s MotilalPadampat Sugar Mills 118 ITR 326 (SC). 3.Further w.r.t GOA 3: No adequate opportunity, kindly refer the following chart in place of the chart shown in our earlier written submission at pages 5 6. Chart Showing Different notices and compliances: S.No. Date of Issue of Notice Last Date As per CIT (A) notice served upon/on Compliance Made by ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law of limitation in the cases of penalty has been provided u/s 275. The same is reproduce here under: 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 subject-matter 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 Principal Chief Commissioner or Chief Commissioner or Principal 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 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 such appeal, an order imposing pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 275 cannot be attracted to such proceedings. If that were not so, clause (c) of section 275(1) would be redundant because otherwise, as a matter of fact every penalty proceeding is usually initiated when during some proceedings such default is noticed, though the final fact finding in this proceeding may not have any bearing on the issues relating to establishing default, e.g., penalty for not deducting tax at source while making payment to employees, or contractor, or for that matter not making payment through cheque or demand draft where it is so required to be made. Either of the contingencies does not affect the computation of taxable income and levy of correct tax on chargeable income; if clause (a) was to be invoked, no necessity of clause (c) would arise. 28. Thus, both on the ground that the transaction in question of retention of sale price by the Kachcha Arhatiya did not amount to deposit and its utilization 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 on the ground that limitation under section 275(1)(c) applies to such proceedings, we hold i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... servation made by the AO in the assessment order has to be considered and the date of the assessment order being 28.12.2017 was relevant and therefore, the period of 6 months has to be reckoned from that date. Consequently, the limitation from that date the limitation had already expired. 7.2. After careful consideration, I find that the issue involved in the present case is fully covered by the decision of Hon'ble Jurisdictional High Court in the case of CIT vs. Hissaria Bros. (Supra).The same has been affirmed by the Hon'ble Apex Court in the case of CIT Vs. Hissaria Brothers [2016] 386 ITR 719 (SC), holding as under. Penalty under ss. 271D and 271E-Limitation under s. 275- Computation-Penalty orders under ss. 271D and 271E passed beyond six months from the end of the month in which the assessments were completed were barred by limitation-CIT vs. Hissaria Bros. (2007) 211 CTR (Raj) 156 affirmed. Similar view was taken again by the Hon'ble Rajasthan High Court in the JCIT Vs. Jitendra Singh Rathore [2013] 352 ITR 327(Raj), wherein it was held under: Penalty under s. 271D-Limitation under s. 275-Applicability of cl (a) or cl. (c) of s. 275(1)-Show-caus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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