Direct Tax (Article) Power of ITAT to stay the penalty proceedings where quantum proceeding is pending before it

Similar documents
Direct Tax (Article) Evidentiary value of statement recorded in assessment, search and survey proceedings under the Income Tax Act, 1961

* IN THE HIGH COURT OF DELHI AT NEW DELHI. versus MR. JUSTICE S. RAVINDRA BHAT. 1. The question of law which arises for decision in this appeal is:

Penalty u/s. 271(1)(c): Initiation, Satisfaction & Levy The Unwritten Mandates

JUDGMENT. (Hon ble Arijit Pasayat, J.) Leave granted.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION. WRIT PETITION (Lodg) NO.3437 OF 2015

income tax procedure starts with the Assessee filing Return of income. The first stage after the filing of Return of income is the Assessement of the

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L)NO OF 2014

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.102 OF 2016

2 the return was not fatal and therefore, did not attract the consequences laid down in Section 185 of the Income Tax Act. Aggrieved by the order of t

By Dhaval Shah, B.Com(FM), ACA.

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD Special Civil Application No of 2015 AUTOMARK INDUSTRIES (I) LTD Vs STATE OF GUJARAT AND 3 Harsha Deva

* IN THE HIGH COURT OF DELHI AT NEW DELHI. + Writ Petition (Civil) No. 2252/2011

CA Final Paper 7 Direct Tax Laws Chapter 24 CA.Aseem Chawla / CA. Anuj Mathur

APPEAL BEFORE CIT (Appeals)

M.A. No. 70/Chd/2018 in Stay Application No. l8/chd/2017 (in ITA No. 1560/Chd/2017) Assessment Year:

$~21 to 34 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision: W.P.(C) 4304/2018 & CM APPL.16759/2018

IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : EXCISE ACT, 1944 CENTRAL EXCISE ACT CASE NOS. 48/2012 & 49/2012 Date of decision: 2nd August, 2013

IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : INCOME TAX MATTER. Judgment delivered on: WP (C) 4642/2008

24 Appeals and Revision

'IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH : BANGALORE

CM No.22555/2015 (Exemption) 3. Allowed, subject to all just exceptions. 4. The application stands disposed of.

BEFORE SHRI R.S. SYAL, AM AND SHRI C.M. GARG, JM

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

IN THE LAHORE HIGH COURT LAHORE JUDICIAL DEPARTMENT

IN THE HIGH COURT OF DELHI AT NEW DELHI. SUBJECT : Delhi Sales Tax Act, Judgment reserved on : Judgment delivered on :

KSJ Metal Impex (P.) Ltd. v. Under Secretary (Cus.), M.F. (D.R.) [2013] 40 taxmann.com 199 (Mad.) (para

IN THE HIGH COURT OF BOMBAY AT GOA

THE COMPETITION (AMENDMENT) BILL, 2007

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH

M.K. Venkatachalam v. Bombay Dyeing & Manufacturing Co. Ltd.

THE COMPETITION (AMENDMENT) BILL, 2007

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

THE BLACK MONEY (UNDISCLOSED FOREIGN INCOME AND ASSETS) AND IMPOSITION OF TAX BILL, 2015

ITEM NO.12 COURT NO.2 SECTION IIIA S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

[Abstract prepared by the PCT Legal Division (PCT )] Case Name: TRYTON MEDICAL INC. V. UNION OF INDIA & ORS.

J.B. Nagar CPE Study Circle. AIPMA House, Andheri, Mumbai On 05 th April, 2015

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER

IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : INCOME TAX ACT. ITA No.572 of 2011 RESERVED ON: MAY 19, 2011 PRONOUNCED ON: JULY 11, 2011

* IN THE HIGH COURT OF DELHI AT NEW DELHI. + Writ Petition (Civil) No. 2174/2011

Bar & Bench ( IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH BEFORE THE HON'BLE MR. JUSTICE B.MANOHAR. W.P. No & W.P.Nos /2012(T-RES)

% L.A. APPEAL NO. 738 OF Date of Decision: 13 th October, # UNION OF INDIA...Appellant! Through: Mr. Sanjay Poddar, Advocate

Present: Mr. Arun Kathpalia, Senior Advocate assisted by Mr. Rudreshwar Singh, Mr. Swapnil Gupta, Mr. Ujjal Banerjee and Ms. Ankita Sinha, Advocates

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI A BENCH, MUMBAI. Before Shri R.K. Gupta (Judicial Member) and Shri Pramod Kumar (Accountant Member)

IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P. (T) No of 2013 with W.P. (T) No of 2013

NEWS LETTER. Indore Branch of Central India Regional Council of The Institute of Chartered Accountants of India. June Vol.-22 No.

IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : INCOME TAX ACT W.P.(C) 7933/2010. Date of Decision : 16th February, 2012.

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI + CRL.M.C. 2467/2015

IN THE INCOME TAX APPELLATE TRIBUNAL SPECIAL BENCH, AHMEDABAD

* IN THE HIGH COURT OF DELHI AT NEW DELHI. + ARB.A. 5/2015 & IA 2340/2015 (for stay) versus

Through : Mr. A.K.Singla, Sr.Advocate with Mr.Pankaj Gupta and Ms.Promila K.Dhar Advocates. Versus

UNDUE HARDSHIP. (S. Jaikumar & G. Natarajan, Advocates)

IN THE HIGH COURT OF KARNATAKA AT BANGALORE BEFORE THE HON BLE MR. JUSTICE ARAVIND KUMAR WRIT PETITION NO /2013 (T-TAR)

$~11 * IN THE HIGH COURT OF DELHI AT NEW DELHI. + WRIT PETITION (CIVIL) No. 3964/2017 INDO ARYA CENTRAL TRANSPORT COMMISSIONER OF INCOME TAX (TDS),

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MS.JUSTICE H.N.DEVANI. KANUBHAI M PATEL HUF - Petitioner(s) Versus

IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : CODE OF CIVIL PROCEDURE. Reserved on: 5th August, Date of decision: 19th September, 2011

THE BUILDING AND OTHER CONSTRUCTION WORKERS WELFARE CESS ACT, 1996 ARRANGEMENT OF SECTIONS

O/TAXAP/588/2013 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD. TAX APPEAL NO. 588 of 2013

CONTEMPT APPLICATION No. 09 OF Ram Gopal Sharma. Applicant. Versus. Sh Sanjay Mitra IAS (WB:82), Defence Secretary, 101-A, South

IN THE HIGH COURT OF DELHI AT NEW DELHI. 1. Writ Petition (Civil) No of Judgment reserved on: August 30, 2007

Appeal, Review and Settlement of Cases

+* THE HIGH COURT OF DELHI AT NEW DELHI. % Judgment Reserved on : Judgment Delivered on: versus. WP(C) No of 2008.

A FORTNIGHTLY VAT/GST LAW REPORTER 2003 NTN 22) [ALLAHABAD HIGH COURT]

IN THE HIGH COURT AT CALCUTTA CIVIL APPELLATE JURISDICTION APPELLATE SIDE

IN THE GAUHATI HIGH COURT

GST/ IDT Case Law Update 4

Dos and Donts during the Assessment Proceedings

THE HIGH COURT OF DELHI AT NEW DELHI

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS OF 2017 M/S LION ENGINEERING CONSULTANTS VERSUS O R D E R

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L) NO OF 2015

640 KNOWLEDGE RESOURCE [Vol. 49 First of all let us go through this amended Section 35F of Central Excise Act, It reads as under: Section 35F. T

IN THE HIGH COURT OF DELHI AT NEW DELHI. SUBJECT : Arbitration and Conciliation Act, OMP No.356/2004. Date of decision : 30th November, 2007

FACTUAL NOTE IN RESPECT OF BHATHA LAND (BLOCK NO. 610) FOR WHICH NOTICE HAS BEEN PUBLISHED BY THE BANK FOR ITS SALE

-COPY OF- INCOME TAX INSTRUCTION NO. 4/2011 DATED IT-

THE PUBLIC PREMISES (EVICTION OF UNAUTHORISED OCCUPANTS) ACT, 1971 ACT NO. 40 OF 1971

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION. CIVIL APPEAL No.11249/2018 [Arising out of SLP (CIVIL) No.

SINGAPORE INTERNATIONAL ARBITRATION CENTRE (SIAC)

Appeals and Revision. Chapter XVIII

IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : LAND ACQUISITION ACT DECIDED ON: W.P. (C) 4439/2013

CENTRAL EXCISE CIRCULAR

IN THE INCOME TAX APPELLATE TRIBUNAL SPECIAL BENCH : JODHPUR

THE WAQF PROPERTIES (EVICTION OF UNAUTHORISED OCCUPANTS), BILL, 2014

Hindalco.Industries.Limited. C.C.E..&.S.Tax,.Vadodara.II. OIA.No.PJ/39/.VDR.II/ dated C.C.E.Cus.&.S.Tax,.(Appeals).Vadodara. 5.. E/1

.. IN HIGH COURT OF DELHI:AT NEW DELHI SUBJECT : CODE OF CIVIL PROCEDURE. I.A. No /2006 in C.S.(OS) No.795/2004

IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : ADMISSION MATTER W.P.(C) 5941/2015 DATE OF DECISION : JUNE 12, 2015

Detailed case : S. P. Bharucha, N. Santosh Hegde and Y. K. Sabharwal JJ.

IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL/APPELLATE JURISDICTION TRANSFERRED CASE (C) NO. 150 OF versus WITH CIVIL APPEAL NO.

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION. CIVIL APPEAL Nos OF Surat Singh (Dead).Appellant(s) VERSUS

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI

DOCTRINE OF RES JUDICATA, BINDING PRECEDENT AND MERGER

BE it enacted by Parliament in the Thirty-second Year of the Republic of India as follows:-- CHAPTER I PRELIMINARY

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER

CHAPTER 13 DEMAND NOTICE/SHOW CAUSE NOTICE, ADJUDICATION, INTEREST, PENALTY, CONFISCATION, SEIZURE, DUTY PAYMENT UNDER PROTEST PART I

21 ASSESSMENT PROCEDURE

CUSTOM EXCIE & SERVICE TAX APPELLATE TRIBUNAL. CA. PIYUSH.S. CHHAJED.FCA., DISA Chartered Accountant

#1 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI. versus. MR RAJBIR ORS... Defendant Through: Ex Parte

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM

1) LPA 561/2010. versus 2) LPA 562/2010. versus 3) LPA 563/2010

Settlement of Tax Cases

Transcription:

Direct Tax (Article) Power of ITAT to stay the penalty proceedings where quantum proceeding is pending before it The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Introduction Normally, when the AO makes addition to the income returned, while completing the assessment, he initiates penalty proceedings u/s 271(1)(c) of the IT Act, 1961 for concealment of income or furnishing inaccurate particulars of income. These additions are generally challenged by the assessee before the CIT(A) and thereafter to the ITAT. To prevent multiplicity of proceedings, section 275 puts a bar of limitation for imposing the penalties. As per this section, the AO has been allowed time to conclude the penalty proceedings within six months from the end of the month in which the order of CIT(A) or the ITAT is received by the CIT. This time limit is an outer limit. The AO has been given the freedom to impose the penalty before such outer limit. Therefore, a question arises that whether when the quantum proceeding is pending before the ITAT, it has a power to stay the penalty proceedings or not. This issue is decided by the Gujarat High Court in case of ACIT vs. GE India Industrial (P) Ltd. (2014) 266 CTR 207. In this Article, an attempt is made to analyse the law laid down in the said decision. Legal Provisions Section 275 of the IT Act, 1961 provides that where the relevant assessment order is the subject matter of an appeal to the CIT(A) or the ITAT, no order imposing penalty shall be passed after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the CIT(A) or the ITAT is received by the Chief CIT or the CIT, whichever period expires later. The proviso to this section further provides that where the assessment order is subject matter of appeal to the CIT(A), an order imposing the penalty shall be passed before the expiry of financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or within one year from the end of the financial year in which the order of the CIT(A) is received by the Chief CIT or the CIT, whichever period expires later. As per section 254(1) of IT Act, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. Facts of the case of GE India Industrial (P) Ltd. 1. The assessee filed the ROI before the AO for A.Y. 2004-05. The AO completed the assessment u/s 143(3) on 29.12.2006. Feeling aggrieved and dissatisfied with the assessment order, the assessee filed an appeal before the CIT(A). 2. The CIT(A) vide order dated 17.07.2012 partly allowed the appeal of the assessee and directed the AO to make a transfer pricing adjustment on account of ALP at Rs. 7,62,29,166 as a result of which there is an enhancement of TP adjustment of Rs. 5,50,73,555. He also directed to initiate penalty proceedings on the aforesaid enhanced income u/s 271(1)(c) for filing of inaccurate particulars of income.

3. The assessee preferred a quantum appeal before the Tribunal to challenge the CIT(A) s order. The assessee also submitted application to the CIT requesting to keep the penalty proceeding in abeyance till their quantum appeal is decided by the ITAT. However, as no order was passed by the CIT and the assessee apprehended that he would proceed further with the penalty proceedings, the assessee submitted a stay application to the Tribunal requesting to grant stay of penalty proceedings till their quantum appeal is finally decided. 4. The ITAT observed that as per the provisions of sec. 275(1)(a) of the IT Act, the CIT will get further six month time to dispose of the penalty proceedings from the end of the month in which the order of the Tribunal is received by the CIT/CCIT and by observing that during the quantum appeal, if the CIT is allowed to proceed with the penalty proceedings, prejudiced will be caused to the assessee as it will have to face multiplicity of the proceedings and relying upon the decision of Hon ble Supreme Court in the case of ITO vs. M.K. Mohammed Kunhi (1969) 71 ITR 815, the Tribunal allowed the stay application and directed the CIT to keep the penalty proceedings in abeyance till the disposal of quantum appeal before it. 5. Feeling aggrieved with the impugned order dated 04.01.2013 of the Tribunal in stay application in the quantum appeal preferred by the assessee and directing to keep the penalty proceeding in abeyance till the disposal of quantum appeal, the Revenue preferred a special civil application raising the question of law as described below. Question of Law Whether in a quantum appeal preferred by the assessee before the Tribunal u/s 254 of the IT Act, the Tribunal would have any power to issue such direction and/or has any express or even implied powers to stay the penalty proceedings pending tax appeal filed by the assessee? Arguments of the Revenue 1. In a quantum appeal u/s 254 of the IT Act, the Tribunal has no express / implied power to stay the penalty proceedings, when the penalty proceedings are not the subject matter of appeal before it. The penalty proceedings are independent proceedings and the same has nothing to do with the quantum appeal. It has no jurisdiction to exercise the powers beyond what is provided u/s 254 of the Act as neither there is express or implied power to stay the penalty proceedings u/s 254 of the Act more particularly when the penalty proceedings are not in challenge before it. 2. The Tribunal, while passing the impugned order of stay of penalty proceedings, has misinterpreted sec. 275(1)(a) of the IT Act, where the time limit is given for imposition of penalty under Chapter XXI and the penalty can be levied within such time-limit. Thus, after the expiry of such period no order imposing the penalty shall be passed. However, there is no bar for imposing the penalty before the expiry of such period. By granting such a stay order, the Revenue shall be prejudiced. Therefore, the stay order passed by the Tribunal is wholly without jurisdiction and beyond the powers u/s 254 of the IT Act.

3. The Tribunal has relied upon the decision of Hon ble Supreme Court in the case of ITO vs. M.K. Mohammed Kunhi (1969) 71 ITR 815. However, this decision is not applicable on the facts and Tribunal has misapplied the said decision. Arguments of the Respondent-Assessee 1. The Tribunal u/s 254 of IT Act, can pass such orders as it thinks fit, inclusive of the stay of penalty proceedings. The decision in the quantum appeal has a direct bearing on the penalty proceedings and therefore, during the pendency of quantum appeal, when an application is submitted for stay of penalty proceedings and stay has been granted by the Tribunal, it cannot be said that the Tribunal has committed any error/illegality. 2. Hon ble Supreme Court in the case of M.K. Mohammed Kunhi has observed that the Tribunal has all the incidental and ancillary powers by implication. Therefore, the controversy raised is squarely covered by the decision of the Supreme Court. 3. In the present case, CIT(A) has made the enhancement and directed to initiate the penalty proceedings on the said enhancement. Therefore, the quantum appeal preferred before the Tribunal is the first appeal. If assessee succeeds in the quantum appeal, there shall not be any further penalty proceedings. The result in quantum appeal has a direct bearing on the imposition of the penalty and therefore it is in the fitness of the thing to stay the penalty proceeding till the quantum appeal is decided by the Tribunal. 4. The assessee could have prayed for the stay of the entire order passed by the CIT(A) and the Tribunal could have considered the same and grant stay of the entire order. But the assessee prayed for limited stay of the penalty proceedings and considering the decision of the Hon ble Supreme Court in the case of M.K. Mohammed Kunhi, the Tribunal has rightly allowed the said application. By issuing such an interim direction, further multiplicity of proceedings can be avoided. 5. The legislature has visualised such a situation and therefore a further period of six month from the date of receipt of the order passed by the appellate authority is provided u/s 275(1)(a) for the imposition of penalty. If during the pendency of the quantum appeal, the penalty proceedings are not stayed the object and purpose of sec. 275(1)(a) of the Act would be frustrated. 6. In exercise of the power u/s 254 of the Act, the Tribunal have jurisdiction and/or powers to grant any ancillary and/or incidental relief so as to avoid any further multiplicity of proceedings. For this, the following decisions were relied upon. I. ITO Vs. M.K. Mohammed Kunhi(supra) 71 ITR 815(SC); II. CIT Vs. Kalpetta Estates Ltd(1987) 66 CTR (Ker) 182 : (1987) 167 ITR 666 (Ker); III. Paulsons Litho Works Vs. ITO & Anr.(1994) 121 CTR (Mad) 183 (1994) 208 ITR 676 (Mad); IV. S.B.I. Home Finance Ltd. Vs. CIT (2000) 163 CTR (Cal) 382 : (2001) 249 ITR 438 (Cal); V. Commercial Engineers & Body Builders Co. (P) Ltd. Vs. UOI(2007) 163 Taxman 218 (All); VI. CIT vs. Wander (P) Ltd. (Bombay HC). On the basis of above submissions and relying upon the above decisions the Ld. Counsel requested to dismiss the special civil application.

Findings of the court 1. The outcome of the decision in appeal by the Tribunal has a direct bearing on the penalty proceedings. Under the circumstances and with a view to see that the appeal before the Tribunal does not become infructuous and / or to avoid any further multiplicity of proceedings, the Tribunal has passed an order to stay the penalty proceedings during the appeal before it, as such it cannot be said that the Tribunal has committed any error or illegality. 2. The powers of Tribunal to pass such an interim order in an appeal u/s 254 of the Act has been considered by the Hon ble Supreme Court in the case of M.K. Mohammed Kunhi. In the said decision, the Hon ble Supreme Court has observed and held that there can be no matter of doubt that by the provisions of the Act or the ITAT Rules 1963, powers have not been expressly conferred upon the Tribunal to stay proceedings relating to the recovery of the penalty or tax due from an assessee. However, the statute confers statutory power to the ITO who can give the necessary relief to an assessee. The right of appeal is a substantive right and the question of fact and law are at large and are open to review by the Tribunal. Indeed the Tribunal has been given very wide powers under sec. 254(1) for it may pass such orders as it thinks fit after giving full hearing to both the parties to the appeal. It is further held that the powers which have been conferred by sec. 254 on the Tribunal with widest possible amplitude must carry with them by necessary implication all the powers and duties identical and necessary to make exercise of those powers fully effective. Finally it is held that the Tribunal has power to grant stay as incidental or ancillary to its appellate jurisdiction. It is further held that when sec. 254 confers appellate jurisdiction, it impliedly grants the power of all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceedings as will prevent the appeal, if successful from being rendered nugatory. It also held that the power to stay by the Tribunal should not be exercised in a routine way but only when a strong prima facie is made out and then Tribunal will consider whether to stay the recovery proceedings and on what conditions it will be granted. 3. As per section 275(1)(a) of IT Act, even after the order passed by the Tribunal, there will be a further period of six months available for imposing the penalty from the end of the month in which the order of the Tribunal is received. Meaning thereby, it can be said that even the legislature has also visualised such a situation of preferring an appeal and the direct effect of the appellate proceeding vis-a-vis the penalty proceeding. 4. In view of the above, the Tribunal in exercise of the powers u/s 254 of the IT Act would have jurisdiction and/or power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying the proceedings (inclusive of penalty proceedings) as will prevent the appeal if successful from being rendered nugatory and the Tribunal has the power to grant stay as incidental or ancillary to its appellate jurisdiction. However, the Tribunal has to be satisfied that there is a strong prima facie case made out and the Tribunal is satisfied that the entire purpose of appeal would be frustrated by allowing the penalty proceedings to continue. Further, where the Tribunal grants the stay, the Tribunal shall see to it that the appeal before it is decided and disposed of earliest and preferably within a period of three months so that the assessee may not take undue advantage by delaying the appeal proceedings.

Conclusion The tax officer, after the receipt of the order of the CIT(A) invariably impose the penalty within one year from the end of the financial year in which the order of CIT(A) is received under proviso to sec. 275(1)(a) though the quantum appeal is pending before the ITAT. The Delhi High Court in case of CIT vs. Mohair Investment & Trading Co. (P) Ltd. 63 DTR 226 / 345 ITR 51 has held that the proviso to section 275(1)(a) has only the effect of extending the period of imposing the penalty from six month to one year within the receipt of the order of the Commissioner. The proviso is an exception from the main section in such cases where no appeal is filed before the ITAT. Where an appeal is pending before the Tribunal, the limitation period for levy of penalty is provided for u/s 275(1)(a) i.e. six months from the end of the month in which the order of the Tribunal is received by the Commissioner. Thus, the proviso to sec. 275(1)(a) does not nullify the availability to the AO of the period of limitation of six months from the end of the month when the order of the ITAT is received by the AO. Therefore, in all such cases, the assessee can be well advised to file stay application before the ITAT for staying the penalty proceeding on the basis of the above decision so as to avoid the multiplicity of proceedings.

Udyog has been successful in integrating itax with following ERP SAP E.C.C. 6.0 SAGE Accpac ERP 100 v 5.6 MFG-QAD eb 2.1 ABAS BPCS Adage BAAN FP 7 Oracle Updated and written by, CA P.C. Parwal pparwal@kalanico.com CA Ankita Jain ankitajainaj91@gmail.com Consultant to Udyog Software (India) Ltd. Visit www.udyogsoftware.com Call us on - 022-67993535 sales@udyogsoftware.com www.udyogsoftware.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.