CIT vs. Hissaria Brothers (Supreme Court)

COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: August 22, 2016 (Date of pronouncement)
DATE: August 26, 2016 (Date of publication)
AY: -
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CITATION:
S. 275: Penalty proceedings for contravention of Sections 269SS & 269T are not related to the assessment proceeding but are independent of it. Therefore, the completion of appellate proceedings arising out of the assessment proceedings has no relevance. Consequently, the limitation prescribed by s. 275(1)(a) does not apply. The limitation period prescribed in s. 275(1)(c) applies to such penalty proceedings

In Commissioner of Income-tax vs. Hissaria Bros 291 ITR 244 Raj, the Rajasthan High Court held that penalty proceedings for default in not having transactions through the bank as required under Sections 269SS and 269T are not related to the assessment proceeding but are independent of it, therefore, the completion of appellate proceedings arising out of the assessment proceedings or the other proceedings during which the penalty proceedings under Sections 271D and 271E may have been initiated has no relevance for sustaining or not sustaining the penalty proceedings. It was held that clause (a) of sub-section (1) of Section 275 was not attracted to such proceedings. It was held that if that were not so, clause (c) of Section 275(1) would be redundant because otherwise as a matter of fact every penalty proceeding is usually initiated when during some proceedings such default is noticed, though the final fact finding in this proceeding may not have any bearing on the issues relating to establishing default e.g. penalty for not deducting tax at source while making payment to employees, or contractor, or for that matter not making payment through cheque or demand draft where it is so required to be made. On appeal by the department to the Supreme Court HELD dismissing the appeal:

On perusing the judgment of the High Court, it is found that penalty imposed on the respondent herein was also set aside on the ground that the provisions of Section 271-D and 271-E of the Income Tax Act were invoked after six months of limitation and, therefore, such penalty could not have been imposed. Since the outcome of the judgment of the High Court can be sustained on this aspect alone, it is not even necessary to go into other aspects. Leaving the other questions of law open, the appeal is dismissed.There shall be no order as to costs.

2 comments on “CIT vs. Hissaria Brothers (Supreme Court)
  1. when not related to assessment proceedings how great intellect in AO or the revenue go about like this proceeding. It is high time the Apex court pass strictures on finance ministry for appointing such useless officers in the revenue, and had i been the one of the judges i would have fined the union of india and granted suo motu damages to the respondents.

  2. when not related to assessment proceedings how great intellect in AO or the revenue go about like this proceeding. It is high time the Apex court pass strictures on finance ministry for appointing such useless officers in the revenue, and had i been the one of the judges i would have fined the union of india and granted suo motu damages to the respondents. not duplicate comment sir, regards for yr bestowing duplicate status to my comment ? tks n regds itat.com

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