§TA.No.99.2003
.... 1 ..
IN THE H§GI-I COURT' OF KARNATAKA AT BANGALORE
DATED THIS THE 23") DAY OF JULY, 2008 'H
PRESENT
THE HON'BLE MRJUSTICE K.L.MANJu3£§1égTi:_'V1-L----i: ft .
AND
THE HON'BLE MRs.aUs*rxC:§; B,v.T:§:AGaiéATHI¢A..___V « T
I.T.A.NO.9§i[2{}€!3 " ' V '
BETWEEN: A' '
UDYAMBAG
BELGAUM H
REP BY ITS .M.D:."
M/s BTP s*1*I2uc€f;'t£.RAr;(1rgIijI}a)_1#W. LTD H H
Bz°;I>I..§}éL§}1é;3; B.PAT--IL 'S/' QRARAMGOUD PATIL
{AGED 'aisqméy %e94V%y~gARs-
. . .APPELLAN'I'
(By. 3;-1: G.fl$$AI§ANC}Ai.§i', §1§:NI0R COUNSEL FOR Sh/Y1'. VAN!
H. ...a;pv;; 'A V
'A TVHEL:_§§i:i%s'r iNCOME TAX OFFICER,
BELGAUM.
RESPONDENT
M '",_ (B§7 S1'i:ARAVIND KUMAR, A.S.G)
This I/I'.A flied 1.1/s. 260A of the Income tax Act, 1961
arising out of omits: dt 22.10.2002 passed in ITA No.
872/ Bang] 95 for the assessment year 1984-85 praying that
this Hoxfble Court may be pleased to allow the appeal and
set-aside the order of the income Tax Appellate Tribunal
bearing ITA No. 872/ Bang] 95 dated. 22.10.2002 and etc.
ITA.I\§o. 99.2003
_ 2 ..
This ETA coming on for HEARING on this day,
MANJUNATH J, delivered the following-
JUDGMENT
This appeal is by the assesses:
passeci by the Income Tax App’£*1′}atc« ‘x;’ 9 j x
E’I’A.No.8’72/Bang/85 for the
which appeal was filed by rseveniie order L’
passed by the order ~t_1_:1e.,_VCI’I’. Belgaum.
The appellant] assesvsee’ –_a.ppea}_ before the
Commissioner of” Inoome. ‘Ta:-:– ._(‘A_ppea1s?);v” Belgaum.’ being
aggrieved Asseesing Omcer,
levyilfjg poovisions of Seciion 2*z1(1)(e)
of the ‘Income ” -. ” *
‘~ , i.5I’:he’o-fnhots’of case are as hereunder:
1 V’!’..$1ev44VV’ae$essee filed its return of income for the
1984435 on 30.6.1984 declaring loss of
Rs.97;I;.4~1/-. The case was taken up for scrutiny. On
A AA_?f5″.~_1.1986 the assessee filed a revised return declaring nil
Vfincome. The assessment under Section 143(3) was
” completed on 31.3.1986 on a total income of Rs.2,64,359/a
Being aggrieved by the order of assessment, the assessee
filed an appeal before Commissioner of Income Tax, which.
\9;/
I’3CA.No. 99.2003
appeal came to be disposed of on 30.4.1987 granting eertain
relief to the assessee and remanding the matter”
Assessing Oficer for flesh consideration on
items. The Assessing Officer by hismoniéer it it
revised the income and deterxnm ed T F€s.$’~t,32t3[
that income will be is-conj£§1;tedA”by L’
expenditure debited tofrofit »La’5_§ hehveen the
revenue expenditure as divested by
the Commissionei’ of While making
fresh fresh assessment
order was: ‘income at Rs.46,490/–.
011 Bit. 10__. penalty was passed based
on the ee_neealed._ 1és.1,43,63e/-.
t1;§}3:~;ier of levying penalty the assessee filed
lxanu 4tl:e:l_:*Sommissioner of Income Tax (Appeals), which
to be allowed and set aside the order of levy of
A penaitfon the ground that the fresh order of assessment
‘w;)_a:s;3ed by the Assessing Ofiicer was barred by limitation.
Against which the revenue filed an appeal before the income
Tax Agpellate Tribunal, Panaji Bench which appeal has been
allowed on the ground that against the order passed by the
Commissioner of Income Tax (Appeals) remanding the matter
‘Q,
I’l’A.N. 99.2063
to the Assessing Ofieer for fresh consideration, the
Bepasrttnent haél filed an appeal befoze the I11oon;le.__Tax
Appellate Tribunal, which appeal was
22.3.1991, which so is produced as to
appeal. The said order was eomilxzuzpxjieaieilepp £.\’aSl¢jSa$71l:1g 1
Oflicer on 9.4.1991 and f:l1erefore,r§r11e oréelfv of llelfyiogep
penalty on 30.10.1991 was filecoirflillglgf, the
appeal filed by the bf lliellvlncome Tax
Appellate Tribunal. the same, the
present blgl the following
q:1estio11s.5 .1 1 ll 1′
A 1 V”Wl:;e-€116: the facts and in the
circumstances’ of__.ti::,e’ case an order of penalty
ieiilecl ?.,1n(:ier’Seoti_on 271(1)(c) is sustainable in
law having” to the relevant assessment
order dated 23.10.1991 being time barred and
‘ 1012 the basisiiif which ihe oomputation of penalty
_l1as_l:I€€I1 made by the assessing authority for
V’ T. VvV’tl1e»vassessment year 1984-85?”
Jlaualve heard _Sri.Sara1__1ga11, learned Senior Counsel
for iappellazlt and Mr.Arvit1d Kumar, learned counsel for
1′ respondent.
5. According to MnSs:’angan the Income Tax Appellate
Tribunal has committed a serious error in not considering
F)’.
E’I’A.No.99.2003
levying penalty under Section 27 1(1)(c) does not arise ..at all.
According to him the Commissioner was justifieci
the appeal filed by the assessee against the order
penalty by the Assessing Officer. fleet’ I
Tribunal by considering the oxdervlef disnfiisga1o£:’e1§ j’
by the revenue by the Ineozzee I . I
wherein there was no older of of
the revenue and me-éfgg .. passed by the
Commissioner of II3IQQ£ItC:’v. erroneously.
Therefoze, hej” start for the
Assessing ef assessment from the
date of tlrtetiemnxissioner and not from
the dat§–.éf”–dtsmvjsssiV.ey”mcoxne Tax Appellate Tribunal
and Arequestttflle the appeal.
for the respondent supperting the
¢:a.e,’r’ passefl the Income Tax Appellate Tribunal contends
since .. vappea} had been pmferred by the revenue
e»c:i11sti}engHing the order of remand passed by the
Cpmmissioner, the Assessing Oficer has to pass an order
” Weniy after the disposal of the appeal by the Income Tax
Ajppeliate Tribunal. To support his View he has relied upon
the provisions of Section 275 of the Income Tax Act. It -is no
8/
IT!-‘~..No.99.2003
doubt true that under Section 275(a)(ii) an order imposing
penalty can be paesed within a period of six months’
date of receiving an order form the ineome
Tribunal. In the instant case the .!neo1he ‘I’e.$§»
Tribunal has dismiesed the appeed ‘;1:)y:’!th”t: on
22.3.1991 and the same iseoingnuniented_te.:fiie~«AssessingV:*
Officer on 9.4.1991 the penalty
under Section 275(1)(¢)-;?éh_ic};_ the time.
'F'. Butr. in this appeal is that to pass an order of oroer of remand passed by the
Com1nissionef”of (Appeals) in terms of Section
1553 of the “Act and levy of genalty would aflse
, – A eniy Aeompieufion of order of assessment If the onier of
by the Assessing Ofiicer is barred by
A Section 153 of the Income Tax Act, then the
queetjon of levying penaity under Section 271(1)(c) does not
V’ V. at all.
V4′
8. As we fiointed out earlier even though revenue had
filed an appeal before the Income Tax Appeilate ‘Tribunal
challenging the order of remand made Commissioner, there
(9.,
ITA.No. 99.2003
was no interim order obtained by the revenue restraining the
Assessing Oficer to give efiect to the order of
by the Commissioner. when there was no _
mere fiiing up of an appeal by the reyenue ” =
Assessing osicer from prmweding: within
order of assessment. Accord” Q, the v_AssessingVAQ1’ficer wvasi” L.
required to pass an order ofiiessessment the time
stipulated under lnooine Tax Act.
Though the order passed completing
the assessmesntiefss iThe assessee has
not if the assessee has not
‘sssessinent, the Assessing Ofiieer
Section 2?1(1)(c). when the
on’gg:’t-w, at asgmmént “méir is barred by limitation, if the
assesses has the order of assessment on the
iimitsfion, the asscssee would have succeeded on
Unfortunately, such an appeal had not been
flied Zthe assessee, challenging the order of assessment
is if he has not challenged the order in penalty
ifpmceedings, it is always open for the assessee to raise the
question of jurisdiction of the Assessing Officer in imposing
penalty invoking the provisions under Section 27l(1)(c) since
3,.
ITA.N0. 99.2003
Cb
the order of assessment itscif was barred by Iimitatioj1i.~–. Q
9. In the circumstances we am of the opi2*;fioi:i:’ ” u
of the Tribunal that the ontier of
the time and has to be set aside,
10. Accordingly, order
imposing penalty underua to be set aside
033)’ 03» T116 assessment was
barred by Section 153(2)(ii)
A sd/…
_____ Fudge
Sd/-‘
Judge