TMI Blog2014 (3) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Varkey Chacko [ 1993 (8) TMI 1 - SUPREME COURT] is also relevant. It does not make any difference if the assessee takes any legal issue in appeal before the Appellate Tribunal. Be that as it may, in this case, penalty has been imposed without obtaining prior approval of the JCIT, therefore, this penalty order is not a legal order in the eyes of law and is null and void. Therefore, we quash the penalty order in question. We have also satisfied ourselves that the provisions of sections 292B and 292BB would not cure the jurisdictional defect. However, the A.O. is at liberty to initiate penalty proceedings as per section 274 of the Act, but further subject to the limitation provisions of section 275 of the Act. We may clarify that the A.O. cannot calculate limitation from the date of this order but has to calculate it from the order of the Appellate Tribunal dated 19.10.2006. From that order, the imposition of penalty would have been barred. We allow this legal ground of the assessee s appeal. - I.T.A. No. 53/JP/2011 And ITA No. 168/JP/2011 - - - Dated:- 7-3-2014 - Shri Hari Om Maratha, Judicial Member And Shri N.K. Saini, Accountant Member For the Assessees : S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) of the Act on account of furnishing inaccurate particulars of income by issuing notice u/s 271(1)(c) r.w.s. 274 of the Act on 15.06.2007. The assessee replied to this notice stating that against the above additions a regular appeal is pending before the ld. CIT(A)-I, Jaipur as the appeal was filed on 14.5.2007. The A.O. was requested to keep the penalty proceedings in abeyance. But in view of limitation provided in section 275(1)(a) of the Act for finalizing the penalty order within six months from the receipt of the Appellate Tribunal s order, the A.O. proceeded to complete the penalty proceedings. In the absence of any assistance/explanation of the assessee, the A.O. has found that the assessee has furnished inaccurate particulars of income in respect of the following items of income: a. Commission Rs. 19,93,474/- b. Hire charges [1658971 + 1,60,000] Rs. 18,18,971/- c. Excess claim of depreciation Rs. 4,50,075/- d. Unsecured loans Rs. 5,19,521/- e. Security deposits Rs. 24,92,238/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1993474 33985 2. Hire charges 1818971 1818971 3. Insurance charges 197199 197199 4. Repair and maintenance 19280 11000 8280 5. Petrol Telephone expenses 20000 3560 16440 6. Travelling expenses 5000 5000 7. Disallowance of depreciation 450000 450000 450000 8. Income from GCJ Securities P. Ltd 2070000 2070000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se had not been issued by the designated authority but still the warrant was not quashed. 9. After considering the rival submissions regarding this legal issue which touches the jurisdiction of the A.O. to initiate and impose a penalty u/s 271(1)(c) of the Act, we find that Section 271 of the Act falls in Chapter XXI, which deals with Penalties Imposable under this Act. The section 274 of this Chapter lays down a procedure for imposing penalty under this Act. For ready reference, we incorporate section 274 of the Act as under: 274. Procedure (1) No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard. (2) 6[No order imposing a penalty under this Chapter shall be made- (a) by the Income- tax Officer, where the penalty exceeds ten thousand rupees; (b) by the Assistant Commissioner [or deputy Commissioner], where the penalty exceeds twenty thousand rupees, except with the prior approval of the [Joint] Commissioner.] (3) 7 [An income- tax authority on making an order under this Chapter imposing a penalty, unless he is himself the Assessing Officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btaining prior approval of the JCIT, therefore, this penalty order is not a legal order in the eyes of law and is null and void. Therefore, we quash the penalty order in question. 10. Having arrived at the above conclusion, we have also satisfied ourselves that the provisions of sections 292B and 292BB would not cure the jurisdictional defect. However, the A.O. is at liberty to initiate penalty proceedings as per section 274 of the Act, but further subject to the limitation provisions of section 275 of the Act. We may clarify that the A.O. cannot calculate limitation from the date of this order but has to calculate it from the order of the Appellate Tribunal dated 19.10.2006. From that order, the imposition of penalty would have been barred. 11. As a result, we allow this legal ground of the assessee s appeal. Thereafter, we need not to decide the other grounds raised on merits in assessee s appeal and even raised in the revenue s appeal, as these ground would not survive by our above findings. 12. In the result, the appeal of the assessee is allowed and that of the revenue is dismissed. (Order pronounced in the open court on 07th March, 2014). - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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