Santosh Jain Vs ITO (ITAT Raipur)
ITAT Raipur held that imposition of penalty u/s. 271(1)(b) of the Income Tax Act within the time period contemplated in clause (a) of sub-section (1) to Section 275, i.e six months from the end of the month in which appellate order was received is duly justified.
Facts- The assessee who was engaged in manufacturing and trading of iron and steel items had carried out substantial business transactions during the year but had failed to file his income return, therefore the A.O. initiated proceedings u/s. 147 of the Act. Notice u/s. 148 was issued to the assessee.
As the assessee failed to comply with the notices issued to him, therefore, the A.O. was constrained to frame assessment vide order passed u/s.144 r.w.s. 147 of the Act dated 15.03.2002, wherein his income was assessed at Rs.5,62,910/-. The A.O., while culminating the assessment, inter alia, initiated penalty proceedings u/s.271(1)(b) of the Act.
Considering the non-compliance of the assessee to the notices issued during assessment proceedings, the A.O. called upon him to explain why the penalty u/s. 271(1)(b) of the Act may not be imposed. As the explanation filed by the assessee did not find favor with the A.O., he vide order passed u/s. 271(1)(b) of the Act dated 27.07.2015 imposed a penalty aggregating to Rs. 70,000/- i.e @ Rs.10,000/- for each of the seven defaults.
CIT(A) scaled down the penalty u/s. 271(1)(b) to Rs. 60,000. Being aggrieved, assessee has preferred the present appeal.
Conclusion- Held that the limitation for imposing penalty u/s. 271(1)(b) as per the time period contemplated in clause (a) of sub-section (1) to Section 275, i.e six months from the end of the month in which appellate order was received – ITAT order dated 17.12.2014, expired on 31.07.2015, therefore, the order dated 27.07.2015 imposing the aforesaid penalty was well within the limitation period. Accordingly, held that the solitary contention advanced by the AR, i.e the penalty imposed by the A.O under Section 271(1)(b) was barred by limitation, and uphold the view taken by the lower authorities.
FULL TEXT OF THE ORDER OF ITAT RAIPUR
The captioned appeals filed by the assessee are directed against the order passed by the CIT(Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 08.03.2023, which arises from the order passed by the A.O. u/s. 271(1 )(b) of the Income-tax Act, 1961 (for short ‘Act’), dated 27.07.2015 for A.Ys.1993-94, 1994-95 & 1995-96. As a common issue is involved in the captioned appeals, the same are being taken up and disposed off through a consolidated order.
2. We shall first take up the appeal filed by the assessee in ITA No.144/RPR/2023 for the assessment year 1993-94 as the lead matter, and the order therein passed shall mutatis-mutandis apply to the remaining appeals. The assessee has assailed the impugned order on the following grounds of appeal before us:
“1. Ld. CIT(A) erred in confirming penalty of Rs.60,000/- imposed by the A.O u/s.271(1 )(b). The penalty imposed by the A.O and confirmed by CIT(A) is illegal and not justified.
2. Without prejudice to ground no.1 Ld. CIT(A) erred in confirming penalty without appreciating the fact that the A.O has levied penalty without providing any opportunity of being heard to the appellant.
3. Without prejudice to ground no.1 and 2, the Ld. CIT(A) erred in confirming penalty without appreciating the fact the penalty order passed by the A.O is illegal and ab initio void inasmuch as same is barred by limitation. The penalty order passed by the A.O and affirmed by the Ld. CIT(A) is liable to be quashed.
4. The appellant reserves the right to add, amend or alter any ground/s of appeal.”
3. Succinctly stated, as the assessee who was engaged in manufacturing and trading of iron and steel items had carried out substantial business transactions during the year but had failed to file his income return; therefore, the A.O. initiated proceedings u/s.147 of the Act. Notice u/s.148 dated 03.2000 was issued to the assessee.
4. As the assessee failed to comply with the notices issued to him, therefore, the A.O. was constrained to frame assessment vide order passed u/s.144 r.w.s. 147 of the Act dated 15.03.2002, wherein his income was assessed at Rs.5,62,910/-. The A.O., while culminating the assessment, inter alia, initiated penalty proceedings u/s.271(1)(b) of the Act.
5. As is discernible from the records, the assessee, in the course of the assessment proceedings, had failed to comply with the notices which were issued by the A.O, as under:
