TMI Blog2016 (6) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... Ginning Factory & Ors. (2013 (7) TMI 620 - KARNATAKA HIGH COURT ) is squarely applicable - Decided in favour of assessee. - ITA No. 415/JP/2015 - - - Dated:- 6-6-2016 - Shri T. R. Meena, AM And Shri Laliet Kumar, JM For the Revenue : Shri B.K. Gupta For the Assessee : Shri P.C. Parwal ( C.A. ) ORDER Per T. R. Meena, A. M. This is an appeal filed by the revenue against the order dated 11/02/2015 of the learned C.I.T.(A)-I Jaipur, for A.Y. 2007-08. The effective grounds of appeal are as under:- (1) Whether on the facts and in the circumstances of the case and in law the ld CIT(A) has erred in deleting the penalty U/s 271(1)(c) amounting to ₹ 1,54,07,020/-. (2) Whether on the facts and in the circumstances of the case and in law the ld CIT(A) has erred in determining the limitation from the date of order of CIT(A) when the entire assessment order was subsequently set aside by Hon ble ITAT. 2. The revenue s appeal is against deleting the penalty imposed U/s 271(1)(c) of the Income Tax Act, 1961 (in short the Act) at ₹ 1,54,07,020/- and determination the limitation from the date of order of ld CIT(A). The assessee filed return at & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee much more. Therefore, assessment for A.Y. 2006-07 was made at ₹ 5,57,72,496/- and addition on account of undisclosed investment U/s 69B of the Act were made. The assessee also availed reasonable opportunity given by the ld Assessing Officer vide letter dated 16/9/2013, which has been reproduced by the Assessing Officer at page 2 to 5 of the assessment order. After considering the assessee s reply, the ld Assessing Officer held that paper marked as Annexure- A/1 and A/2 were found and impounded from the site office of the assessee, which were confronted with Shri Ram Kisore Jat, main person of the assessee and with the directors of the assessee company also and the additional income was surrendered by the Director, hence it did not make any difference that papers were not found at the registered office or administrative office of the assessee company but found at the site office. The argument taken by the assessee that no specific penalty U/s 271(1)(c) has been initiated in set aside proceeding was not found convincing to the Assessing Officer as the Hon ble ITAT has set aside specifically mentioned the assessment order is set aside, which means the entire order U/s 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessing Officer because of the fact that the Hon ble ITAT vide their order dated 14/10/2011 in ITA No. 406/JP/2011 had set aside the assessment as had been concluded by the Hon ble ITAT at paragraph 8 of the order i.e. the assessment order is set aside. The penalty proceedings initiated alongwith set aside assessment are altogether different from the earlier. The assessee s argument was also not found convincing that the assessee has disclosed the income during the assessment proceedings at ₹ 4,57,72,496/- and this surrender was made to avoid the litigation and was continued to buy peace of mind and avoid penalty and prosecution. This argument was not found convincing to the Assessing Officer and held that if the assessee disclosed on account of investment will automatically would be reduced at the time of sale of the project and adjusted against the cost of the land purchased. As per Explation-1 of Section 271(1)(c), the assessee had clearly concealed the particulars of income or furnished inaccurate particulars of income, the assessee failed to offer an explanation and has not substantiated that explanation filed by the assessee is bonafide. He further relied on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be passed, in the facts of the present case, within one year from the end of the financial year in which the order of the Commissioner(A) is received by the Chief Commissioner or Commissioner, whichever is later. Thus, as per the proviso to section 275 (1)(a) of the Act, the penalty order ought to have been passed on or before 31.3.2012, i.e., within one year from the end of financial year in which the Id. CIT(A) s order was received back by the Department. The penalty order, however, got to be passed only on 27/9/2013. That being so, the contention of the assessee is correct. The penalty order is clearly barred by limitation provided by the proviso to section 275(1)(a) of the Act. In view of the above, the penalty order is hit by the proviso to section 275(1 )(a) of the Act. Going by the para-meters laid down therein in the said section, the penalty order is clearly beyond the limitation provided therein. Accordingly, the penalty order is cancelled, being barred by limitation, as above. Since the penalty order stands cancelled as barred by limitation, nothing else survives. As such, the original grounds raised by the assessee, on merits, are not required to be gone into and I am n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order vide order dated 14/10/2011. As per Section 275(1)(a), the penalty order is to be passed on or before 31/3/2012. The assessee only requested to keep the penalty proceeding pending only addition set aside by the Hon ble ITAT for ₹ 39,23,278/- and ld Assessing Officer was free to impose the penalty on remaining addition if intent to do so on remaining assessed income, which has not been challenged by the assessee. The ld Assessing Officer considering this reply, had dropped the penalty proceedings, thus the levy of penalty with reference to amount of ₹ 4,57,72,496/- imposed by the Assessing Officer on 27/9/2013 is barred by limitation. It is settled law that once the assessment of a particular item of income is final, the ld Assessing Officer has to impose penalty qua that item within the limitation which respect to the order which confers such finality. Law is not averse to passing multiple penalty orders for same assessment year, for which he relied on the following case laws:- (i) UP State Bridge Corporation Ltd. Vs DCIT 17 DTR 297 (Luck-B Bench). (ii) Pramod Kumawat in ITSSA No. 178/JP/2005 dated 22/2/2008. (iii) CIT Vs Moradabad General Art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer imposed penalty on additional income disclosed by the assessee at ₹ 4,57,72,496/-, which has not been challenged before the ld CIT(A). Therefore, after the original assessment, this quantum was final. As per Section 275(1)(a) of the Act, the penalty order ought to have been passed on or before 31/3/2012 i.e. within one year from the end of the financial year in which the ld CIT(A) s order was received by the department. However, penalty order passed on 27/09/2013 by the ld Assessing Officer, therefore, penalty order passed is barred by limitation. 5.1 We further find that the penalty proceedings initiated in original assessment has been dropped by the ld Assessing Officer vide D CR No. 87/135 dated 27/3/2012. When there is no addition made in set aside proceedings, no penalty can be imposed on ₹ 4,57,72,496/-. In set aside assessment order, the ld Assessing Officer has not specified at the time of initiation of penalty proceedings whether penalty is initiated for the inaccurate particulars of income or concealment of income. The case laws relied by the ld AR i.e. CIT Vs Manjunatha Cotton Ginning Factory Ors. (supra) is squarely applicable. The Coord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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