DCIT, New Delhi v. M/s. Neptune Information Solutions Ltd,, New Delhi

ITA 3500/DEL/2010 | 2002-2003
Pronouncement Date: 19-01-2011 | Result: Allowed

Appeal Details

RSA Number 350020114 RSA 2010
Assessee PAN AAACN2754P
Bench Delhi
Appeal Number ITA 3500/DEL/2010
Duration Of Justice 6 month(s) 3 day(s)
Appellant DCIT, New Delhi
Respondent M/s. Neptune Information Solutions Ltd,, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 19-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted F
Tribunal Order Date 19-01-2011
Date Of Final Hearing 19-01-2011
Next Hearing Date 19-01-2011
Assessment Year 2002-2003
Appeal Filed On 16-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH F BENCH F BENCH F BENCH F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.E.VEERABHADRAPPA VICE PRESIDENT AND BEFORE SHRI G.E.VEERABHADRAPPA VICE PRESIDENT AND BEFORE SHRI G.E.VEERABHADRAPPA VICE PRESIDENT AND BEFORE SHRI G.E.VEERABHADRAPPA VICE PRESIDENT AND SHRI C.L.SETHI JUDICIAL MEMBER SHRI C.L.SETHI JUDICIAL MEMBER SHRI C.L.SETHI JUDICIAL MEMBER SHRI C.L.SETHI JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.3500/DEL/2010 3500/DEL/2010 3500/DEL/2010 3500/DEL/2010 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2002 2002 2002 2002- -- -03 0303 03 DY.COMMISSIONER OF DY.COMMISSIONER OF DY.COMMISSIONER OF DY.COMMISSIONER OF INCOME TAX INCOME TAX INCOME TAX INCOME TAX CIRCLE CIRCLE CIRCLE CIRCLE- -- -13(1) 13(1) 13(1) 13(1) NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S NEPTUNE INFORMATION M/S NEPTUNE INFORMATION M/S NEPTUNE INFORMATION M/S NEPTUNE INFORMATION SOLUTIONS LIMITED SOLUTIONS LIMITED SOLUTIONS LIMITED SOLUTIONS LIMITED TOWER NO.1 70 TOWER NO.1 70 TOWER NO.1 70 TOWER NO.1 70 NAJAFGARH ROAD NAJAFGARH ROAD NAJAFGARH ROAD NAJAFGARH ROAD B BB B- -- -39 39 39 39 NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 015. 110 015. 110 015. 110 015. PAN NO. PAN NO. PAN NO. PAN NO.AAACN2754P. AAACN2754P. AAACN2754P. AAACN2754P. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI H.K.LAL SR.DR. RESPONDENT BY : NONE. ORDER ORDER ORDER ORDER PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI J J J JM : M : M : M : THE REVENUE IS IN APPEAL AGAINST THE ORDER DATED 1 0.5.2010 PASSED BY LEARNED CIT(A) QUASHING THE PENALTY ORDER PASSED BY THE AO U/S 271(1)(C) AS BARRED BY LIMITATION FOR TH E AY 2002-03. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN DELETING THE PENA LTY OF RS.3 92 195/- IMPOSED U/S 271(1)(C) OF INCOME TAX ACT 1961 BY HOLDING THAT THE PENALTY ORDER U/S 271(1)(C) IS NULL AND VOID BEING BARRED BY LIMITATI ON AS PER THE PROVISO TO SECTION 275(1)(A) OF INCOME TAX ACT 1961. 2. THAT LD.CIT(A) FAILED TO APPRECIATE THAT IN THIS CASE THE ASSESSMENT ORDER IN WHICH THE PENALTY PROCEEDINGS WERE INITIATED WAS SUBJECT MATTER OF APPEAL BEFORE THE ITAT. AS SUCH WITH IN THE MEANIN G ITA-3500/DEL/2010 2 OF SECTION 275(1)(A) THE PENALTY ORDER COULD HAVE BEEN PASSED UPTO 28.02.2009 I.E. WITHIN 6 MONTHS FROM THE RECEIPT OF THE ORDER OF THE ITAT WHICH WA S RECEIVED IN THIS CASE ON 12.08.2008. THE ORDER WAS PASSED ON 26.02.2009. AS SUCH IT IS PASSED WELL WI THIN THE PERMITTED TIME. THE PROVISO TO SECTION 275(1)(A) OF THE ACT APPLIES ONLY TO A SITUATION WHERE APPEAL IS NOT FILED TO ITAT AN D PENALTY IS BEING DECIDED AFTER THE ORDER OF THE CIT (A). THE PROVISO WAS INTRODUCED TO GIVE EXTENDED PERIOD OF ONE YEAR FROM THE END OF THE YEAR IN WHICH THE ORDE R OF THE CIT(A) WAS RECEIVED WHERE APPEAL WAS NOT FI LED TO ITAT. 3. WE HAVE HEARD THE LEARNED DR. THE ADJOURNMENT APPLICATION FILED BY THE ASSESSEE HAS BEEN REJECTED AS NO SUFFICIENT REASON HAS BEEN SHOWN AND THE MEDICAL CE RTIFICATE IN SUPPORT OF ILLNESS OF ASSESSEES COUNSEL HAS NOT BE EN PRODUCED AND IN THE LIGHT OF THE FACT THAT ALREADY ONE ADJOU RNMENT WAS GRANTED TO THE ASSESSEE ON 20.9.2010 GRANTING THE T IME OF ABOUT FOUR MONTHS. 4. IN THIS CASE THE ASSESSMENT WAS COMPLETED U/S 1 43(3) ON 31.1.2005 AGAINST WHICH THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) PASSED THE APPELLATE ORDER ON 16.1.2006 WHICH WAS SENT TO THE CONCERNED CIT ON 15 .2.2006. THE CIT(A) HAS TAKEN A VIEW THAT THE PERIOD OF PASS ING THE PENALTY ORDER U/S 271(1)(C) IS TO BE RECKONED WITH REFERENCE TO THE DATE OF RECEIPT OF CIT(A)S ORDER PASSED IN QUA NTUM APPEAL. THE CIT(A) HAD THEREFORE TAKEN A VIEW THAT THE PE NALTY ORDERS U/S 271(1)(C) SHOULD HAVE BEEN PASSED BY 31.3.2007 AS AGAINST PENALTY ORDER PASSED BY THE AO ON 26.2.2009. THE D EPARTMENT HAS CONTENDED THAT THE ORDER OF CIT(A) WAS FURTHER APPEALED ITA-3500/DEL/2010 3 AGAINST BEFORE THE TRIBUNAL AND THE TRIBUNAL ORDER WAS RECEIVED BY THE COMMISSIONER ON 12.8.2008 AND THEREFORE THE TIME LIMIT FOR PASSING THE PENALTY ORDER WOULD BE SIX MONTHS F ROM THE END OF THE MONTH IN WHICH THE ORDER OF THE TRIBUNAL WAS RECEIVED. IT IS THE DEPARTMENTAL CASE THAT THE PENALTY ORDER IN THE INSTANT CASE COULD HAVE THUS BEEN PASSED UPTO 28.2.2009 AND ACCO RDINGLY THE AO HAS PASSED THE ORDER U/S 271(1)(C) BEFORE THAT D ATE ON 26.2.2009 AND CANNOT SAID TO BE BEYOND THE TIME LIM IT PRESCRIBED U/S 275(1)(A) OF THE ACT. 5. IN THIS CONNECTION LEARNED DR HAS RELIED UPON T HE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF RAY ALA CORPORATION P.LTD. (2007) 288 ITR 452 (MAD) WHERE IT HAS BEEN HELD THAT THE PROVISO TO SECTION 275(1)(A) OF THE I NCOME-TAX ACT 1961 INSERTED BY THE FINANCE ACT 2003 W.E.F. 1.6 .2003 DOES NOT NULLIFY THE AVAILABILITY TO THE CHIEF COMMISSIO NER OF THE PERIOD OF LIMITATION OF SIX MONTHS FROM THE END OF THE MON TH WHEN THE ORDER OF THE TRIBUNAL IS RECEIVED BY THE CHIEF COMM ISSIONER. FROM THIS DECISION IT IS THUS CLEAR THAT THE PROVI SO TO SECTION 275(1)(A) OF THE ACT INSERTED BY THE FINANCE ACT 2 003 W.E.F. 1.6.2003 ON WHICH THE LEARNED CIT(A) HAS PLACED GR EAT EMPHASIS WOULD NOT CURTAIL THE TIME AVAILABLE TO THE ITO TO PASS PENALTY ORDER WITHIN SIX MONTHS FROM THE END OF THE MONTH W HEN THE ORDER OF THE TRIBUNAL IS RECEIVED BY THE CHIEF COMM ISSIONER IN CASE THE ASSESSMENT WAS SUBJECT TO APPEAL BEFORE TH E TRIBUNAL. IN THE PRESENT CASE IT IS NOT IN DISPUTE THAT IN T HE QUANTUM APPEAL THE MATTER HAS REACHED UPTO THE STAGE OF TH E TRIBUNAL AND THE ORDER OF THE TRIBUNAL WAS RECEIVED BY THE C HIEF COMMISSIONER ON 12.8.2008. THEREFORE THE TIME LIM IT FOR PASSING ITA-3500/DEL/2010 4 THE PENALTY ORDER WOULD BE SIX MONTHS FROM THE END OF AUGUST 2008 I.E. THE TIME LIMIT WOULD UPTO 28.2.009. THE AO HAS PASSED THE PENALTY ORDER ON 26.2.2009 WHICH IS IN OUR CON SIDERED OPINION WITHIN TIME. WE THEREFORE SET ASIDE THE CIT(A)S ORDER AND RESTORE THE MATTER BACK TO HIM TO DECIDE ON MER IT AS TO WHETHER PENALTY LEVIED BY THE AO U/S 271(1)(C) IS J USTIFIED ON MERIT. THE LEARNED CIT(A) SHALL PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS WELL AS TO THE AO. WE ORDER ACCORDINGLY. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S ALLOWED IN THE MANNER AS INDICATED ABOVE. DECISION PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF HEARING ON 19 TH JANUARY 2011. SD/- SD/- (G.E.VEERABHADRAPPA (G.E.VEERABHADRAPPA (G.E.VEERABHADRAPPA (G.E.VEERABHADRAPPA) )) ) (C.L.SETHI (C.L.SETHI (C.L.SETHI (C.L.SETHI) )) ) VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 19.01.2011. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT ASSISTANT REGISTRAR ITA-3500/DEL/2010 5