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TMI Blog2016 (2) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the assessee at Visakhapatnam and Srikakulam on 25.8.2005. During the course of search and seizure operations, some incriminating material was found and seized. Simultaneously, survey operation was also conducted in the company's premises of the assessee at Visakhapatnam and Vizianagaram. 3. The assessee has filed the original return of income for the assessment year 2002-03 on 1.12.2003 admitting income of Rs. 9,52,139/- besides agricultural income of Rs. 1,25,000/-. Consequent to the search and seizure operation, the assessee filed return of income in response to notice issued u/s 153A of the Act on 20.3.2006 admitting the total income, as admitted in the original return of income. Subsequently assessments were completed u/s 143(3) r.w.s. 153A of the Act on 18.12.2007. 4. During the course of assessment proceedings, the assessing officer given a detailed show cause letter pointing out discrepancies noticed as per the seized/impounded material and after considering the explanation given to the show cause letter, additions were made and assessment was completed on 18.12.2007. 5. The assessee carried matter in appeal before the CIT(A), Visakhapatnam. The Ld. CIT(A) upheld t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO without giving reasonable opportunity to the assessee as required under section 274 though the Ld. AO has ample time to give a further opportunity to the assessee. 5. The penalty levied for the following additions made by the Ld. AO and sustained by the Ld. CIT(A) is not correct even on merits. a. Additional Construction Agreement 1000000 b. Under Reporting of Gross Profit - MIMS Project 234816 c. Unaccounted cash receipts from MIMS Project 647000 d. Undisclosed loans and interest (This should be undisclosed investment) 1400000 e. Disallowance u/s 40A(3) 269258 6. For these and other grounds that may be urged at the time of hearing the appellant prays for justice. 8. The Ld. Counsel for the assessee has submitted before the CIT(A) that the order u/s 271(1)(c) of the Act passed by DCIT, Central Circle(2), Visakhapatnam on 31.3.2010 is barred by limitation as per the provisions of section 275(1)(a) of the Act. Since the order of the CIT(A) has been received by the Commissioner on 20.4.2010, (as per the form no.36 filed before the Tribunal) and 6 months from the end of the month, expired on 30.10.2010. The proviso to section 275(1)(a) of the Act does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er considered the ground no.2 raised by the assessee in respect of vague notice that the assessee has contended that the notice issued u/s 274 r.w.s. 271(1)(c) of the Act dated 18.12.2007 is vague and hence invalid. Therefore, consequent penalty order is void-ab-initio. A copy of the notice was stated to be also enclosed. However, I find a copy of the notice enclosed was dated 18.12.2007, possibly relating to penalty notice issued in re-assessment proceedings for this appeal. The A.R.'s contention was that the notice did not clearly indicate whether it was levied of penalty for non furnishing of return or for non completion of notice or for concealment of particulars. Hence, it was contended that the entire penalty proceedings is vitiated. He further observed that I am unable to accept the A.R.'s contention, as I find from the penalty order the appellate has given response to the penalty notice and has also requested to keep the penalty in abeyance. Thus, it is evident that the appellant is aware of the purpose and has responded to the same. If the appellant has not understood, he has to raise this plea in response to the show cause notice. This ground of appeal raised by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the CIT or Chief CIT. In this case, the penalty order has been passed beyond the period of 6 months from the end of the month in which the order of the CIT(A) has been received by Ld. CIT, the same is barred by limitation. Further, to the above, to support his arguments, he relied on the judgement of the CIT Vs. Mohair Investments & Trading Company Pvt. Limited (2011) 245 CTR (Delhi) 312. 13. On the other hand, the Ld. D.R. has submitted that the proviso to section 275(1)(a) of the Act has been inserted by the Finance Act on 1st day of June, 2003. Once the CIT(A) passed an order on or after the first day of June, 2013, as per the proviso, the time limit of 6 months provided by the section 275(1)(a) and submitted that the assessing officer has to pass the penalty order within a one year and therefore the penalty order passed by the A.O. within the period of limitation and submitted that the order passed by CIT(A) may be upheld. So far as the case law relied by the Ld. Counsel for the assessee, he has submitted that the Hon'ble Delhi High Court has considered limitation period for the levy of penalty, in respect of order of Tribunal, not in respect of order of CIT(A) and held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther 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 penalty shall be passed before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or within one year from the end of the financial year in which the order of the Commissioner (Appeals) is received by the [Principal Chief Commissioner or]Chief Commissioner or [Principal Commissioner or] Commissioner, whichever is later;]" 15. From the plain reading of the above section and proviso thereto, the following issues are emerging. The legal position before 1.6.2003, the time limit for passing of the penalty order where an appeal has been filed against the assessment order to the Commissioner (A) u/s 275(1)(a) of the Act. i. On or before the expiry of the financial year in which assessment proceedings are completed or (this is no application in so far as present case is concerned). ii. On or before expiry of 6 months from the end of the financial year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the receipt of the order by the Commissioner and in case assessing officer imposes penalty order passed by the ITAT, then the period of 6 months is provided by the main section. This judgement of the Hon'ble Delhi High Court has no relevance to the argument of the Ld. Counsel for the assessee and therefore, we reject the argument of the Ld. Counsel and we hold that the order passed by the CIT(A) after 1st June, 2003, the extended period of limitation from 6 months to 1 year is available to the assessing officer, to pass a penalty order within the period of 1 year. In the present case, the assessing officer passed the penalty order within the period of 1 year. Therefore, the penalty order passed by the A.O. is within the time limit provided by the proviso to section 275(1)(a) of the Act. In the case of Rayala Corporation Pvt. Ltd. Vs. UOI & Ors. 288 ITR 452 (2007), the Hon'ble Madras High Court has considered proviso to section 275(1)(a) of the Act vis-à-vis appeal to the Tribunal and held that the proviso to section 275(1)(a) of the Act, does not nullify the availability to the third respondent of the period of limitation of 6 months from the end of the month when the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) adjudicated the same, only option available to the assessee is to question the order of CIT(A) in the course of appeal before the ITAT not by raising additional ground. Thus the above additional ground raised by the assessee is dismissed. However, after careful consideration of the orders of the authorities below and also particularly the penalty order passed by the A.O., we find that the assessee has not filed the details in respect of interest payment, unexplained investment in jewellery, bogus sundry creditors. Therefore, the A.O. after considering the non-filing of the above details and held that the assessee has concealed the income and came to a conclusion that it is a fit case to levy the penalty and accordingly penalty has been levied. We find that the assessee has not filed details in respect of the interest payment, unexplained investment in jewellery, sundry creditors. Therefore, by filing inaccurate particulars, the assessee has concealed the income. In the present case, section 271(1)(c) of the Act attracts on both the counts i.e. concealment of particulars of income and furnishing inaccurate particulars. Therefore, the penalty levied by the A.O. is justified and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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