Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2018 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (7) TMI 1819 - HC - Income TaxPenalty u/s 271(1)(c) - Held that - The impugned penalty notices having issued well beyond the period of limitation fixed in the first limb of Section 275(1) (a) of the Act, are held to be barred by limitation. However, the respondent is at liberty to initiate penalty proceedings after the order is passed by the CIT (A) before whom the matters are pending. In the result, these Writ Petitions are allowed, the impugned notices are directed to be kept in abeyance with liberty to the respondent to initiate fresh proceedings after the disposal of the Appeals by the Commissioner of Income Tax (Appeals), which have been preferred against the orders of assessment passed by the respondent.
Issues:
Challenge to notice under Section 271(1)(c) of the Income Tax Act, 1961 for penalty imposition. Analysis: The petitioner filed writ petitions to quash a notice issued by the respondent under Section 271(1)(c) of the Income Tax Act, 1961. The respondent demanded the petitioner to show cause for not levying the penalty, despite the petitioner's request to keep penalty proceedings in abeyance due to filed appeals before the Commissioner of Income Tax (Appeals). The petitioner cited a previous court decision where penalties were stayed pending appeals and obtained an interim stay order. The respondent argued that the penalty notice was not time-barred based on Section 275 of the Act, mentioning the outer time limit for penalty imposition. The Court examined whether the notices were time-barred under Section 275(1)(a) of the Act. The Court analyzed Section 275 of the Income Tax Act, which sets limitations for imposing penalties. It highlighted the two limbs of Clause (a) of Section 275(1), noting that no penalty order shall be passed after the expiry of the financial year in which assessment proceedings were completed, or six months from the end of the month in which the order of the Commissioner (Appeals) was received. The Court determined the time limit for penalty initiation based on the assessment year and the date of assessment order, concluding that the penalty notices issued after the specified periods were time-barred. Referring to a previous case, the Court emphasized that the impugned penalty notices were beyond the limitation period set in Section 275(1)(a) of the Act. It allowed the writ petitions, directing the notices to be kept in abeyance until the disposal of appeals by the Commissioner of Income Tax (Appeals). The Court granted liberty to the respondent to initiate fresh proceedings post-appeal disposal. The decision was based on the clear time-barred status of the penalty notices and the need for finality in the assessment and penalty imposition process. In conclusion, the Court allowed the writ petitions, keeping the penalty notices in abeyance due to being time-barred under Section 275(1)(a) of the Income Tax Act. The judgment emphasized the importance of adhering to statutory limitations for penalty imposition and ensuring a fair and timely resolution of tax-related disputes.
|