2016 (3) TMI 1084 - AT - Income Tax

Penalty u/s 271D / 271E - Issue of limitation by invoking Rule 27 of ITAT Rules - period of limitation prescribed u/s 275(1)( c) - Held that - all the impugned orders levying penalty are barred by Limitation. The penalty order should have been passed not later than 30th June, 2012. As the impugned order is passed beyond this date, all the appeals are barred by Limitation. Hence all the Revenue appeals are dismissed. - Decided in favour of assessee

Summary

Issues:
Appeals by Revenue against orders of Ld.Commissioner of Income Tax (Appeals) for A.Y. 2006-07, 2007-08, and 2009-10.

Analysis:

1. Issue of Limitation:
The assessee raised the issue of limitation under Rule 27 of ITAT Rules. The Ld.CIT(A) decided against the assessee, but the ITAT held that the assessee is entitled to raise the ground on limitation. The ITAT considered the common issues in all appeals together for convenience.

2. Interpretation of Section 275:
The ITAT referred to the order of the Ld.CIT(A) which discussed Section 275 regarding the limitation on passing penalty orders. The Ld.CIT(A) dismissed the appellant's appeal, stating that the penalty order was within the prescribed limitation under Section 275(1)(c). However, the ITAT cited a judgment of the Delhi High Court in a similar case, emphasizing the two distinct periods of limitation for passing a penalty order and concluded that all impugned penalty orders were barred by limitation.

3. Application of Legal Precedent:
The ITAT applied the legal principles established by the Delhi High Court judgment to the present case. It highlighted that the penalty order should have been passed by a certain date to comply with the limitation provisions. The ITAT found that the penalty orders in question were passed beyond the prescribed date, rendering them all barred by limitation. Consequently, the ITAT dismissed all Revenue appeals based on the limitation issue.

In conclusion, the ITAT ruled that the penalty orders in question were barred by limitation as per the provisions of Section 275. By applying the legal interpretation from the Delhi High Court judgment, the ITAT found that the penalty orders should have been passed by a specific date, which was not adhered to in this case. Therefore, all Revenue appeals were dismissed due to the limitation issue.