Sh. Prashant Dutt Chaudhary, Panchkula vs Assessee

are directed against the separate orders of the learned

Commissioner of Income Tax (Appeals), Panchkula, all dated

30.12.2014 in confirming the penalty under section 271(1)(c)

of the Income Tax Act, 1961 (in short 'the Act') relating to

assessment year 2001-02. In all the appeals, the issue is

common and, therefore, these appeals were heard together and

are being disposed off by this common order for the sake of

convenience.

2. Since the facts and circumstances are identical in

all the appeals, I may refer to the discussion in the orders of

the Income Tax Authorities in the case of Smt.Vijay Dutt

Chaudhary in ITA No.246/Chd/2015. For the assessment

year 2001-02, the assessee filed the return of income on

17.9.2007 declaring nil income in response to the notice

under section 148 of the Act. The assessment was completed

under section 143(3) r.w.s. 147 on 22.11.2007 at

Rs.12,23,334/- after making addition on account of Long Term

Capital Gain. The assessee went in appeal before the learned

CIT (Appeals) and the learned CIT (Appeals) vide his order

dated 24.8.2009 dismissed the appeal. The assessee came up

in appeal before the Tribunal and the Tribunal vide its order

dated 29.4.2011 dismissed the appeal of the assessee and

decided the issue in favour of the Revenue. The order of the 3

Tribunal was received by the Commissioner, Panchkula on

2.9.2011 and thereafter the Assessing Officer levied penalty of

Rs.7,33,761/- being the amount of tax sought to be evaded

vide order dated 12.3.2012. The assessee challenged the

penalty order in appeal before the learned CIT (Appeals),

Panchkula on the ground that the order of penalty is time

barred as the order of the learned CIT (Appeals) was served on

18.9.2009 and one year from the end of financial year thereof

expired on 31.3.2011. However, during the appellate

proceedings before the learned CIT (Appeals), the assessee

submitted that the penalty order dated 12.3.2012 levying

penalty is barred by limitation. The assessee submitted that

against the quantum order dated 18.9.2009 of learned CIT

(Appeals), the assessee preferred an appeal i.e. I TA

Nos.978/Chd/2009 before the Tribunal and appeal of the

assessee together with ITA Nos.979 & 980/Chd/2009 i.e.

appeals preferred by Shri Vikrant Dutt Chaudhary and Shri

Prashant Dutt Chaudhary were disposed off by the Tribunal

on 29.4.2011. The assessee also submitted before the

learned CIT (Appeals) that the penalty order under section

271(1)(c) of the Act was not passed by the Assessing Officer

within a period of six months from the end of the month in

which the order of the Tribunal was received by the Chief

Commissioner of Income Tax in the quantum proceedings. It

was also stated that the order passed by the Tribunal dated

29.4.2011 anyhow cannot be served late more than two

months to the Assessing Officer. Then also the penalty order

must be passed before 31.12.2011.

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3. The learned CIT (Appeals) dismissed the appeal on

legal ground raised by the assessee, observing as under :

"5.1 A plain reading of the section shows that u/s 275(1) the requirement of the main section is that when an assessment order is a subject matter of appeal before the CIT(A) then the penalty order should be passed, within a period of six months from the end of the month in which the order of the C1T(A) is received by the CCIT/ Commissioner. The proviso to this section was inserted w.e.f. 01.06.2003, to expand this time period of six months to one year in cases wherein the commissioner of the C1T(A) passes an order on after 1st June 2003 and no appeal is filed before the Tribunal, The proviso does not deal with eases where the appeals are pending before the ITAT u/s 275 of the Act. That limb of section 275(1 )(a), which fixes the time limit of six months from the date of receipt of order of the ITAT by the CCIT, for passing an order of penalty is not disturbed in any manner by the insertion of the proviso. In the present ease, the order of ITAT was rendered on 29.04.2011 and the order passed by the AO levying penalty was passed on 12.03.2012, i.e., passed after more than 11 month from the order of the ITAT. The appellant relied on the judgment in the case of M/s Rayala Corporation Pvt. Ltd. vs. Union of India & Others (2007) 288 1TR 452 (Mad.).

5.2 1 have gone through the facts of the case, written submission filed by the appellant and assessment record. On perusal of assessment record, it is noted that the CIT(A) issued order for Appeal No. 54/PKL/07-08 dated 24.08.2009 which was received by the AO on 01.09.2009. Against the order of CIT(A), the appellant preferred an appeal before Hon'ble ITAT. The Hon'ble ITAT issued a combined order in the case of Sh. Vikrant Dutt Chaudhary, Mrs. Vijay Dutt Chaudhary and Sh. Prashant Dutt Chaudhary for ITA No. 978 to 980/Chandi/2009 for A.Y. 2001-02 on 29.04.2011. The order of Hon'ble ITAT was received in the office of C1T, Panchkula on 02.09.2011. Thereafter, the order of Hon'ble ITAT was forwarded to AO by Addl.CIT, Panchkula on 27.09.2011. The counsel for the appellant also replied through an application to the 5

AO that a miscellaneous application has been filed before Hon'ble ITAT on 12.09.2011. These facts show that the order of Hon'ble ITAT was received in the office of C1T, Panchkula in the month of September, 2011.

5.3 The time limit for making an order imposing a penalty is governed by the provisions of section 275 of the Act. In case, the relevant assessment order is subject matter of an appeal before Commissioner (Appeals) or Appellate Tribunal then the penalty order should be passed within a period of six months from the end of the month in which the order of Commissioner (Appeals) or Appellate Tribunal is received by the Chief Commissioner or Commissioner. In the present case, the order dated 29.04.2011 of the Appellate Tribunal was received by Commissioner on 02.09.2011. The limitation period of six month starts from the end of the month in which the order was received. So, the limitation expires on 31.03.2012. The AO has passed penalty order on 12.03.2012 and issued demand notice u/s 156 on 13.03.2012. Therefore, it is found that the penalty order was passed well within the period of time limitation. Thus, the ground of appeal is dismissed.

4. I have heard Shri Atul Mandhar, learned counsel for

the assessee. At the very outset, he submitted that the only

ground raised by the assessee in this appeal is that the

penalty order passed by the Assessing Officer is time barred

and, therefore, the learned CIT (Appeals) was not justified in

upholding the order of the Assessing Officer. He further

pointed out that the assessee has not challenged the

impugned order on merits. To this effect, the learned counsel

for the assessee has submitted a letter dated 20.7.2015,

which reads as under :

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To, Dated: 20/07/2015

The Assistant Registrar, Income Tax Appellate Tribunal, Sector 9-A, Chandigarh - 160009.

SUBJECT: IN THE CASE OF Smt. VIJAY DUTT CHAUDHARY, HOUSE NO. 162,

SECTOR 2, PANCHKULA, HARYANA. [P.A.N. : AHFPC8225R]

ASSESSMENT YEAR : 2001-02.

APPEAL NO. : ITA NO. 246/CHANDI/2015. DATE OF HEARING : 20/07/2015. [SMC] Sir,

Kindly refer to the case cited above. In this case I shall like to bring to your kind knowledge that the only Ground of Appeal involved in the present Appeal is w.r.t. Penalty U/s 271(1)(c) being time barred, to the exclusion of any other ground/issue.

This is for your information and record.

Thanking you.

Yours faithfully,

Sd/-

(ATUL MANDHAR) COUNSEL FOR THE ASSESSEE

5. Section 275(1)a) of the Act relates to bar of

limitation for imposing penalty. Section 275(1)(a) of the Act

reads as under :

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 7

Appellate Tribunal is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, whichever period expires later :

6. Admittedly, in this case, the assessment order was a

subject matter of appeal before the I.T.A.T., and, therefore, in

view of the provisions of section 275(1)(a) of the Act, the

penalty order was required to be passed within a period of six

months from the end of the month in which the order of the

Appellate Tribunal was received by the Chief Commissioner of

Income Tax or Commissioner. In the instant case, as per the

record maintained by the Tribunal, the Tribunal passed the

order in the quantum appeal on 29.4.2011 and a copy of the

same was issued and sent to the Commissioner of Income Tax,

Panchkula on 1.8.2011 by registered parcel. Admittedly, the

order dated 29.4.2011 of the Tribunal was received by the

Commissioner of Income Tax, Panchkula on 2.9.2011. There

is no material on record to controvert the above facts. As per

the provisions of section 275(1)(a) of the Act, the limitation

period of six months starts from the end of the month in

which the order was received. Therefore, as per the

provisions of law, the Assessing Officer was required to pass

the penalty order on or before 31.3.2012. Admittedly, the

Assessing Officer passed the penalty order on 12.3.2012 and

issued demand notice under section 156 of the Act on

13.3.2012. In view of the above, I do not find any infirmity

in the order of the learned CIT (Appeals) and accordingly, I

uphold the same.

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7. No other issue was raised or argued before me.

8. In the result, the appeal in ITA No.246/Chd/2015 is

dismissed.

ITA Nos.247/Chd/2015

& ITA Nos.247/Chd/2015

9. It is relevant to observe here that the facts and

circumstances of these cases are similar to that of Smt.Vijay

Dutt Chaudhary in ITA No.246/Chd/2015 and the findings

given in ITA No.246/Chd/2015 shall apply to these cases also

with equal force.

10. In the result, all the appeals of the assessee are

dismissed.

Order pronounced in the open court on this 23rd

day of July, 2015.

Sd/-

(H.L.KARWA) VICE PRESIDENT Dated : 23 r d ............ July, 2015

*Rati*

Copy to: The Appellant/The Respondent/The CIT(A)/The CIT/The DR.

Assistant Registrar, ITAT, Chandigarh 9