| Question And Answer | |
|---|---|
| Subject: | Penalty u/s 271(1)(c) |
| Category: | Income-Tax |
| Querist: | ANKUR AGRAWAL |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Concealment penalty, cross objection |
| Date: | September 7, 2021 |
1.Assessment was completed u/s 143(3)/147 making additions on account of discrepancies found in survey on account of Cash in hand and Stock in trade etc.
2.On appeal the additions made by A.O. were confirmed by CIT(A) vide order dated 06/02/2020 and ITAT order dated 08/07/2016.
3.Penalty u/s 271(1)(c) of Rs.4,60,000 was levied vide order dated 26/04/2017.
4.On appeal CIT(A) deleted the Penalty on the sole ground taken regarding limitation stating that – “order of the ITAT was passed on 08/07/2016 , therefore the penalty order must have been passed by the A.O. upto 31/03/2017. However the A.O. has passed the order on 26/04/2017 which is beyond the prescribed time limit as mentioned in section 275(1)(a) of the I.T. Act.
5.Against the order of the CIT(A) department has filed appeal on two grounds :
(i) Order of the CIT(A) was received in the office of the principal CIT on 07/10/2016 and therefore penalty order dated. 26/04/2017 is within time.
(ii) The case of the assessee is covered under exceptions as per para- 10(a) of the circular no.03/2018 dated 1107/2018 f CBDT and further amendments thereto on 20/08/2018.
Query :
1.How far ground no. 1 & 2 of the department is justified?
2.Whether penalty is covered in CBDT circular of low tax effect?
If yes , any case law of CBDT circular in support of the same.
3.The assessee has not filed cross objection in ITAT whether now the assessee can challenge the penalty notice on the ground that –
‘ Have concealed the particulars of income
or
furnished inaccurate particulars of such income’
In the penalty notice it has not been specified whether the charge is on one ground or the other.
Your valuable detailed reply will be highly appreciated.
Thanks & Regards
As per Para 10(a) of the CBDT Circular No. 03 of 2018 dated July 11, 2018 [2018] 405 ITR (St.) 29, where adverse judgements relating to the Constitutional validity of the provisions of the Act or Rule is under challenge, then there is no monetary limit on the revenue for filing an appeal.
In the given case, the Departmental appeal is on the interpretation of section 275 of the Income-tax Act, 1961. The same cannot be construed to an issue relating to Constitutional validity. Therefore, the Revenue’s appeal will be covered by the pecuniary jurisdiction as determined by the Circular, and may not survive.
Further, The Hon’ble Bombay High Court in the case of Peter Vaz v. CIT [2021] 128 taxmann.com 180 (Bom) (HC) wherein it was held that where Tribunal in impugned order had come to conclusion that issues raised in cross objection were legal issues, Tribunal should not have stopped assessees from raising issue in appeals instituted by revenue, without necessity of filing any cross objections.
Therefore, the assessee may raise cross objections before the Tribunal.
Hope the same clairfies