Jagdish Chandra Suwalka Vs JCIT (ITAT Jaipur)
The assessee appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), confirming a penalty of ₹47,50,000 imposed under Section 271D of the Income-tax Act for alleged violation of Section 269SS. The assessment for Assessment Year 2015-16 had been completed under Sections 147/143(3), and thereafter the Joint Commissioner issued a show cause notice under Section 271D alleging that the assessee had accepted cash of ₹47,50,000 from various persons for filing an application for a liquor licence tender instead of through banking channels. The penalty was imposed on the ground that the assessee had failed to establish any reasonable cause for accepting cash. The Commissioner (Appeals) upheld the penalty.
Before the Tribunal, the assessee raised an additional legal ground contending that the penalty order dated 28 May 2019 was barred by limitation under Section 275(1)(c) of the Act. The Tribunal admitted the additional ground, holding that it involved a pure question of law requiring no fresh investigation of facts. The assessee argued that the limitation period should be reckoned from the assessment proceedings during which the Assessing Officer first noticed the alleged contravention of Section 269SS and not from the date on which the Joint Commissioner issued the show cause notice. Relying on the decisions of the Rajasthan High Court in JCIT v. Jitendra Singh Rathore and CIT v. Hissaria Brothers, affirmed by the Supreme Court, the assessee contended that the penalty should have been imposed within six months from the end of the month in which the assessment proceedings were completed. Since the assessment order was passed on 28 December 2017, the assessee submitted that the limitation expired on 30 June 2018, whereas the penalty was imposed only on 28 May 2019.
