TMI Blog2019 (9) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... is clearly barred by limitation provided by the proviso to 275(l)(a) - Decided in favour of assessee - ITA No. 229/AHD/2018 - - - Dated:- 31-7-2019 - Shri Waseem Ahmed, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Assessee : Shri P.D. Shah, A.R For the Revenue : Ms. Richa Rastogi, Sr. D.R ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals), Ahmedabad dated 24/11/2017( in short Ld.CIT(A) ) arising in the matter of penalty order passed under s.271(1)(c) of the Income Tax Act, 1961 (here-inafter referred to as the Act ) dt. 20/02/2017 relevant to the Assessment Year 1990-1991. The assessee has raised the following grounds of appeal; 1) That the learned CIT(A) has erred in law and facts by confirming the penalty of ₹ 16,66,271/ under section 271(10(c) of the Act and therefore, the learned AO should be directed to delete the penalty levied under u/s.271(1)(c) of the Act. 2) That your appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustained where it can be proved that there was concealment or inaccurate particulars of income. Further to levy the penalty, there should be mens-rea, i.e. there was an existing guilty state of mind. The penalty cannot be levied mere change of opinion or on debatable point. 2.7 However, the AO contended that as per the provision of section 275 (IA) the order of penalty was to be passed within the expiry of six months from the end of the month in which the order of the CIT (A), or the Appellate Tribunal, or the Hon ble High Court, or the Hon ble Supreme Court is received by the PCCIT or PCIT. As such the order of Hon ble High Court was received by the PCIT on 26-08-2016, therefore, the penalty order was passed according to the provision of law and within the time as discussed above. 2.8 The AO also not accepted the other contentions of the assessee by observing that during the period of the search operation, it has been established that it was involved in unaccounted production and sales. Moreover, the director of the assessee company admitted said facts by giving his statement dated 24-01-1992. On perusal of the statement recorded, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the authorities below. The ld. AR also submitted that the order passed by the AO is barred by the limitation as specified under section 275 of the Act. The learned AR accordingly prayed to delete the addition made by the AO and confirmed by the learned CIT-A. 6. On the other hand, the learned DR vehemently supported the order of the authorities below. 7. We have heard the rival contentions of both the parties and perused the materials available on record. The 1st controversy arises for our adjudication whether the order passed by the AO is barred by the limitation. On perusal of the provisions of section 275(1)(a) of the Act, as applicable to the year under consideration, we note that the AO was under the obligation to pass the penalty order after the pronouncement of the order of the ITAT within the specified time. However, in the case on hand, the AO passed the penalty order after passing the judgment by the Hon ble Gujarat High Court dated 20-02- 2017. The relevant details of the orders /judgments are given as under : i. The date of the penalty order is 20-02-2017 ii. The date of the ITAT order in quantum proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Commissioner or Commissioner, whichever is later in a case where the assessment order is subject matter of appealbefore the Commissioner(A) and the Conimissioner passes the order on or after 1.6.2003 disposing of scuh appeal. 12. Apropos the Department's contention thai the case is covered by the proviso to section 275(1 A) rather than the proviso to section 275(l)(a) of the Act, it is seen that this is not correct. Section 275( I A) reads as follows: [(I A) In a case where the relevant assessment or other order is the subject-matter of an appeal lo the Commissioner (Appeals) under section 246 or section 246A or an appeal to the Appellate Tribunal under section 253 or an appeal lo the Nigh Court under section 260A or an appeal to Ihe Supreme Conn under section 261 or revision under section 263 or section 264 and an order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty is passed before the order of the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by the Chief Commissioner or the Commissioner or the order of rev ision under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided by the proviso to 275(l)(a) of the Act. Besides the above, we also note that the ITAT Ahmedabad in the own case of the assessee bearing ITA No. 105/AHD/2014 for the assessment year 1992-93 vide order dated 3-4-2017 involving identical issue has decided the appeal in favour of the assessee. The relevant extract of the order is reproduced as under: 11. We have duly considered rival contentions and gone through the record. Section 271(1)(c) of the Income Tax Act, 1961 has direct bearing on the controversy. Therefore, it is pertinent to take note of the section. 271. Failure to furnish returns, comply with notices, concealment of income, etc. (1) The Assessing Officer or the Commissioner (Appeals) or the CIT in the course of any proceedings under this Act, is satisfied that any person (a) and (b)** ** ** (c) has concealed the particulars of his income or furnished inaccurate particulars of such income. He may direct that such person shall pay by way of penalty. (i)and (Income-tax Officer,)** ** ** (iii) in the cases referred to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation or the explanation offered by the assessee is found to be false by the Assessing Officer or Learned CIT(Appeal); and, (b) where in respect of any fact, material to the computation of total income under the provisions of the Act, the assessee is not able to substantiate the explanation and the assessee fails, to prove that such explanation is bona fide and that the assessee had disclosed all the facts relating to the same and material to the computation of the total income. Under first situation, the deeming fiction would come to play if the assessee failed to give any explanation with respect to any fact material to the computation of total income or by action of the Assessing Officer or the Learned CIT(Appeals) by giving a categorical finding to the effect that explanation given by the assessee is false. In the second situation, the deeming fiction would come to play by the failure of the assessee to substantiate his explanation in respect of any fact material to the computation of total income and in addition to this the assessee is not able to prove that such explanation was given bona fide and all the facts relating to the same and material to the computation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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