Home › Income-Tax Act › CIT v. Jhabua Power Ltd. (2013) 262 CTR 277/217 Taxman 399 (SC)/(2015) 13 SCC 443

CIT v. Jhabua Power Ltd. (2013) 262 CTR 277/217 Taxman 399 (SC)/(2015) 13 SCC 443

S.275: Penalty – Concealment – Limitation – Appeal – Supreme Court – Questions of law raised first time – Matter set aside to Tribunal [ [S. 254(1) ,261, 271(1)(a), 271(1)(c), 271D]

Facts

The facts of the present case as follows, have been culled out from order dated 15.07.2016 passed by the ITAT, Kolkata, after remand by the Supreme Court of India, in ITO, Kolkata v. Kedia Power ltd ITA  No. 1516/Kol/2008. Assessment of the return submitted by the Assessee company was undertaken by the concerned ITO under sections 143(3) and 147 of the Income-tax Act, 1961 (Act) vide order dated 19.02.2004 and subsequently, penalty was levied by the ACIT under section 271D of the Act through order dated29.03.2007.

During the appellate procedure, it was only on appeal to the jurisdictional High Court that for the first time the revenue department raised two questions of law which have been reproduced below,

“(a)   Whether on  the facts and in  the circumstances of  the case the Income    Tax Appellate Tribunal  failed to  appreciate that the period of  limitation  in the instant case is governed by the provisions of Section 275() (sic) as     the penalty was initiated in the assessment order itself and the penalty order was issued within time in accordance with the provisions of Section 275(1)(a) of the Income Tax Act, 1961?

(b) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal  was justified in coming to the conclusion that the order   of penalty was barred under provisions of Section 275(1)(c) and failed to consider that penalty was initiated in the assessment order itself and the same was issued within time and in accordance with Section 275(1)(a) of   the Income-tax Act, 1961?”

On appeal to the Supreme Court of India, the question before the bench was whether the abovementioned questions of law could be raised before the High Court for the first time without any mention in the earlier stages of appeal.

 

Issue

Whether two specific questions on limitation raised for the first time before the Court could be entertained by High Court without having been raised before the lower courts?

 

 

View

Ordinarily, an appeal before  the jurisdictional High Court can only be in respect   of issues which were raised before first appellate authority and therefore any question of law not raised before the first appellate authority cannot be permitted  to be raised before High Court for the first time.

 

Held

The questions of law on Limitation raised for the first time before Hon’ble Supreme Court on the applicability of whether order of penalty was barred by limitation under the provisions of sections 275(1)(a) or 275(1)(c) of the Act. The same should first be answered by the ITAT  and then by the High Court, therefore,  the matter was remanded to the ITAT and the judgements and order passed by the HighCourt and ITAT were set aside. (CA No. 5503 of 2013 dt. 15-7-2013)

Editorial: The matter after being remanded by the Hon’ble Supreme Court was taken up for hearing by the ITAT in ITO, Kolkata v. Kedia Power ltd ITA No. 1516/Kol/2008, wherein the question of law whether the  penalty order passed by ACIT, Range-7 Kolkata under section 271D of the Act is covered under sections 271(1)(a) or 271(1)(c) of the Act (sic), was answered as being covered under section 275(1)(c) of the Act (sic).

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