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TMI Blog2012 (6) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... in the order dated 3.05.2007 giving effect to the order oibL4at 22.08.06 and as such, the impugned order of penalty lacks jurisdiction in terms of the provisions of the Act, in particular section 275 of the Act. The appellants further contend that the order of penalty of the Assessing Officer is bad in law and hence, penalty levied by the Assessing Officer and confirmed by the CIT(A) requires to be quashed." 3. The assessment u/s 143(3) was completed on 31.12.2002 determining the total income of Rs. 260,81,10,479/-. The Assessing Officer made the following additions to the returned income: 1. Unexplained investment u/s. 69 Rs.191,44,84,403 2. Undisclosed profit Rs.59,11,51,576 3. Unexplained cash credit u/s. 68 Rs.624,83,562 4. Dividend u/s. 2(22)(e) Rs.3,53,29,499 5. Depreciation on membership right of BSE Rs.32,50,000 3.1 Against the assessment order, the assessee had filed an appeal before the CIT(A). The CIT(A) passed the order on 29.3.2004 whereby allowed a relief of Rs.50,50,53,571/- to the assessee out of the additions made on account of unexplained investment. The other additions made by the Assessing Officer were confirmed by the CIT(A). The assessee as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no additional ground has been raised by the assessee in respect of the issue of limitation; however, since the fresh point raised by the assessee is purely legal in nature and all facts relevant to decide the issue are available on record; therefore, we propose to consider the fresh plea raised by the assessee. 5. The ld AR of the assessee has submitted that the penalty order has been passed by the Assessing Officer on 19.12.2007 whereas the CIT(A) passed the order in quantum appeal on 29.3.2004. The ld AR has referred the first proviso to sec. 275(1)(a) and submitted that the penalty order should have been passed within one year from the end of the Financial Year in which the order of the CIT(A) is received by the Chief Commissioner or Commissioner. The ld AR of the assessee has submitted that since the order of the CIT(A) was passed on 29.3.2004, then the penalty order passed after 31.3.2005 is barred by limitation. 6. We find no merit on this plea of the assessee because admittedly, the assessee as well as the revenue has filed cross appeal before the Tribunal against the order of the Cit(A). Therefore, for the purpose of passing order u/s 271(1)(c), the limitation will be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty has been initiated or six months from the end of the month in which the order of the Commissioner (Appeals) or this Tribunal is received by the Commissioner or Chief Commissioner whichever period expires later. 6.3 However, in the case when the matter rests at the stage of the CIT(A) and no appeal has been preferred before the Tribunal against the order of the CIT(A), then the time period for passing the order for imposing the penalty has been relaxed by first proviso from six months to one year. Therefore, the proviso is applicable only in cases where no appeal has been filed before the Tribunal against the order of the CIT(A) and in such event, the limitation will be counted from the end of the financial year in which the order of the CIT(A) is received by the Commissioner or Chief Commissioner. When the appeal has been filed against the order of the CIT(A), then the limitation will be reckoned from the end of the month in which the order of the Tribunal is received by the Commissioner or Chief Commissioner as provided under clause (a) of sub.sec. (1) of sec. 275. This view of ours is fortified by the decision of the Hon'ble Delhi High Court in the case of CIT vs Mohair I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b 2009 within a period of six months from the order of the Tribunal." Accordingly, the fresh plea against the limitation deserves to be rejected. 7. After conclusion of the hearing, the assessee has further filed a letter dated 2.2.2012 in the averments of the said letter, the assessee stated that the penalty order is otherwise barred by limitation, if it is counted from the order of the Tribunal dated 22.8.2006 because the penalty order u/s 271(1)(c) was passed on 19.12.2007 after the expiry of more than six months from the end of the month in which the order of the Tribunal was received by the Commissioner or Chief Commissioner. 7.1 Thus, the assessee, again raised a fresh plea vide letter dated 2.2.2012 filed after the conclusion of the hearing that the penalty order is barred by limitation even under the main provisions of sec. 275(1)(a) of the Act. 8. After careful perusal of the record, we find that this additional plea of the assessee is also not acceptable because the assessee has referred the order of the Tribunal dated 22.8.2006 whereas against the said order of the Tribunal the assessee preferred a Miscellaneous Application which was decided by the Tribunal on 19.7.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order. 10. We have considered the rival contention as well as the relevant material on record. There is no dispute so far as the satisfaction recorded by the Assessing Officer while passing the assessment order u/s 143(3) is concerned. The objection raised by the ld AR is only in respect of the consequential order passed by the Assessing Officer as the Assessing Officer has not recorded any satisfaction in the consequential order. It is material to note that the consequential order was not a separate assessment order and what is required as per the provisions of the Act is satisfaction to be recorded in the assessment order. The Tribunal has not set aside the entire assessment order but remitted the specific issue to the record of the Assessing Officer and in the consequential order, the Assessing Officer has granted relief to the assessee to the extent the assessee was able to produce the requisite evidence in support of the claim. Therefore, the addition on which the penalty was levied by the Assessing Officer remains exists and very much arising from the original assessment order. 10.1 The Assessing Officer while passing the assessment order dated 31.10.2002 u/s 143(3) has dul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the clients whereas the assessee has satisfied the Assessing Officer in the majority of other cases, then the non production of the confirmation in respect of three clients leading to an addition would not attract the penal provisions of sec. 271(1)(c) of the Act. He has further submitted that when the assessee has disclosed all the primary facts along with the return of income, then there is no concealment of any particulars of income or furnishing of inaccurate particulars of income. He has relied upon the decision of the Hon'ble Supreme Court in the case of Commissioner of Income-tax v. Orissa Corporation P. Ltd. reported in 195 ITR 78. 12.1 He has further submitted that when the transaction in question was duly recorded by the assessee in the books of account and the ledger account of these parties showing the transactions on behalf of the parties, then there is no concealment of income or furnishing of inaccurate particulars of income. He has further submitted that the address and other relevant documents of these parties were produced before the authorities and once the assessee has produced the identity of the clients, then the assessee has discharged its burden of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be bonafide, then the Explanation 1 to sec. 271(1)(c) cannot be invoked. However, if the assessee's claim is not a claim made with respect to any deduction as per the provisions of the Act; but purely a factual claim which was found incorrect/untrue, then it cannot be said that the explanation offered by the assessee is bonafide. 15. In the case of the assessee, it was found that the transactions recorded by the assessee were in fact the investment of the assessee and not the purchases on behalf of the clients. The addition has been made by the Assessing Officer on the basis of the evidence found that the client's ID did not match and therefore, it was established that the true nature of transaction has not been recorded by the assessee in the books of account. Because of the transaction, which was found as not true in the books of account which has resulted the addition in question. Thus, it is the case where some facts were not at all correctly and truly presented by the assessee. 16. In this view of the matter,, the contention of the assessee that the assessee's claim is denied due to non production of confirmation of the parties cannot invite penal provisions, is not accep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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