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Deputy Commissioner of Income Tax Versus M/s Grass Field Farms & Resorts P. Ltd.

2016 (6) TMI 428 - ITAT JAIPUR

Penalty U/s 271(1)(c) - assessee admitted additional income on account of undisclosed expenditure/investment towards purchase of land in survey U/s 133A - Held that:- 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)ís order was received by the department. However, penalty order passed on 27/09/2013 by the ld Assessing Officer, therefore, penalty order passed is ba .....

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cealment of income. The case laws relied by the ld AR i.e. CIT Vs Manjunatha Cotton & 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 .....

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ue 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 ₹ 5,11,69,560/- on 31/12/2009 as against ₹ 14,73,790/- shown in the return of income filed of 31/10/2007. The case was scrutinized U/s 143(3) of the Act on 30/09/2009 by the Assessing Officer. The assessment was made at ₹ 5,11,69,560/- in which .....

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ddition was not challenged by the assessee before the ld CIT(A). The revenue in appeal before the Hon ble ITAT against the CIT(A) order dated 08/2/2011. The Hon ble ITAT vide order dated 14/12/2011 in ITA No. 406/JP/2011 A.Y. 2007-08 has set aside this issue to the Assessing Officer. Thereafter, the ld Assessing Officer completed the set aside proceeding vide order dated 18/3/2013 wherein he had not made any addition separately but accepted the original assessed income and issued notice U/s 274 .....

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roject of developing farm houses scheme at NH-8, near village Mahela, district- Jaipur. Survey U/s 133A of the Act was carried out at business premises of the assessee company on 26/2/2008 to 28/02/2008. During the course of survey operation, incriminating documents were found and impounded U/s 133A of the Act. As a result of survey, undisclosed investment in purchase of agricultural land and other discrepancies were detected and noticed, which was admitted by the Director of the company. It is .....

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nt 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 assess .....

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no existence until the set aside assessment was completed and income was determined accordingly. Therefore, the ld Assessing Officer had dropped the penalty proceedings for a while on 27/3/2012. This was done within the prescribed time limit as per provisions of Income Tax Act, 1961. Thereafter the set aside assessment had been completed vide order dated 18/3/2013 determining the income of the assessee at ₹ 4,72,86,290/- wherein addition of ₹ 4,57,72,496/- was made U/s 69B of the Ac .....

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on 31/10/2007 and it was the survey operation conducted by the department at the business premises of the assessee on 26/2/2008 to 28/2/2008 wherein the undisclosed investment amounting to ₹ 4,57,72,496/- was detected, which was admitted by the director of the assessee company. With regards to no specific penalty has been initiated by the Assessing Officer, he held that as per Section 271(1)(b) inserted by the Finance Act, 2008 with retrospective effect from 01/4/1989 direction contained .....

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/2011 thus, period of deciding the penalty was up to 31/4/2012. It is to be mentioned that the penalty was dropped by the Assessing Officer on 27/3/2012 (D&CR No. 87/135) i.e. well within the time. The penalty proceedings were dropped 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 .....

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ccount 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 the decision of Hon'ble Supreme Court in the case of Dharme .....

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the penalty by observing that the assessee filed revised computation disclosing additional income of ₹ 4,57,72,496/- during the assessment proceedings. The ld Assessing Officer completed assessment on 30/12/2009 U/s 143(3) making addition of ₹ 4,96,95,774/-, which includes the addition of ₹ 39,23,273/- U/s 69B of the Act also. The ld CIT(A) vide order dated 08/2/2011 in ITA No. 834/2009-10 deleted the addition of ₹ 39,23,273/-. The department preferred appeal before the .....

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he Act. The moot question of limitation date was decided by the ld CIT(A) after considering Section 275 of the Act. The ld CIT(A) in first round had decided the appeal on 08/2/2011, therefore, as per CIT(A) it has to be decided on or before 31/3/2012. However, the ld Assessing Officer has passed order U/s 271(1)(c) on 27/09/2013. It is also a fact that the Assessing Officer had initially dropped the penalty proceedings. Further the addition of ₹ 4,57,72,496/- was not a subject matter in th .....

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ef 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 .....

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not required to be gone into and I am not doing so. In the result, the appeal is allowed. 4. Now the revenue is in appeal before us. The ld DR has vehemently supported the order of the Assessing Officer. At the outset, the ld AR of the assessee has reiterated the facts mentioned in the penalty order before the ld CIT(A). In set aside proceedings, the ld Assessing Officer accepted the income offered by the assessee as such at ₹ 4,57,72,496/- by filing the revised computation and also added .....

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it is for concealed the particulars of income or furnished inaccurate particulars of such income. The order challenged the legality of penalty proceedings initiated in the assessment order passed U/s 143(3)/set aside even then the ld Assessing Officer imposed the penalty on ₹ 4,57,72,496/- on assessed income. The ld CIT(A) has allowed the appeal in favour of the assessee by considering Section 275(1) and held that penalty is barred by limitation. Therefore, it was argued that penalty proce .....

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he assessee nor set aside by the Hon ble ITAT. The amount only, in addition to this amount of ₹ 39,23,278/- was challenged by the assessee and same was set aside by the Hon ble ITAT, which has been accepted by the Assessing Officer and no addition in set aside proceeding has been made by him. Therefore, penalty proceedings initiated at the time of set aside assessment is illegal and bad in law. The Hon ble ITAT has set aside the order vide order dated 14/10/2011. As per Section 275(1)(a), .....

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nt 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 DT .....

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eedings is vague, no penalty can be levied. He relied on the decision in the case of CIT Vs Manjunatha Cotton & Ginning Factory & Ors. 359 ITR 565 (Kar.) wherein notice U/s 274 of the Act should specially stayed the grounds mentioned in Section 271(1)(c) i.e. whether it is for concealment of income or for furnishing inaccurate particulars of income, sending printed form where all the grounds mentioned in Section 271 or mentioned would not specified requirement of law. The assessee should .....

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er dated 18/3/2016 in ITA No. 773/JP/2013. Therefore, he prayed to dismiss the revenue s appeal. 5. We have heard the rival contentions of both the parties and perused the material available on the record. The assessee originally filed return on 31/10/2007 at ₹ 14,73,790/-. A survey U/s 133A was conducted on 26/2/2008 to 28/2/2008. During the course of survey proceedings, the assessee admitted additional income for the year under consideration at ₹ 4,57,72,496/- on account of undiscl .....

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