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2016 (7) TMI 1520 - AT - Income TaxPenalty u/s 158BFA(2) - order barred by limitation - HELD THAT - the date of the order of the Tribunal is 12.10.2006 and the date of the High Court order is 29.11.2010 and penalty order is passed on 19.05.2011 therefore provisions of section 158BFA(3)(c) extends the period of limitation in the matter of appeal before the Tribunal only and not on appeal before the Hon ble High Court. Therefore the penalty order is passed beyond the period of limitation as provided u/s 158BFA(3)(c) of the Income Tax Act. as the date of the Tribunal order is 12.10.2006, the penalty should have been levied within 6 months from the end of the month in which the order of the Tribunal is received which in any case is violated as the penalty order is passed on 19.05.2011. As the date of the Tribunal order is 12.10.2006, the penalty should have been levied within 6 months from the end of the month in which the order of the Tribunal is received which in any case is violated as the penalty order is passed on 19.05.2011. In this case the order of the tribunal is dated 12.10.2006 and penalty order is passed on 19.05.2011, therefore, apparently the order is barred by limitation. The decision relied upon by the ld AR of coordinate bench of Arvind Kr. Jain Vs. ACIT 2012 (9) TMI 1159 - ITAT AGRA has decided the issue on identical facts and circumstances, wherein such order of penalty was barred by limitation - Decided in favour of assessee.
Issues:
Appeal against cancellation of penalty under section 158BFA(2) of the Income Tax Act, 1961. Analysis: 1. The case involved a search under section 132 of the Act in Shyam Telecom Group Cases, leading to the discovery of undisclosed long-term capital gains by the assessee. The Assessing Officer initiated penalty proceedings under section 158BFA(2) due to non-disclosure of income, which was confirmed by the CIT (A) and subsequently by the High Court. 2. The key contention was whether the penalty order passed on 19.05.2011 was within the limitation period as per section 158BFA(3)(c) of the Income Tax Act. The appellant argued that the penalty was time-barred based on the dates of the Tribunal order and the High Court decision, citing a precedent where a penalty order was held to be beyond the limitation period. 3. The Tribunal analyzed the timeline of events, noting that the Tribunal's order was dated 24.10.2006, and the High Court's decision was on 29.11.2010. The provision of section 158BFA(3)(c) specifies the period within which a penalty order can be imposed, considering the completion of proceedings or receipt of Tribunal's order. Relying on the precedent cited by the appellant, the Tribunal concluded that the penalty order in this case was indeed beyond the limitation period. 4. The Tribunal highlighted that the law did not provide for extending the limitation period based on the pendency of a Miscellaneous Application (M.A.) before the Tribunal. The authorities were criticized for miscalculating the limitation period and wrongly considering the impact of the M.A. on the penalty order's timeline. The Tribunal emphasized that the penalty order dated 28.08.2007 in the precedent case was time-barred, leading to the dismissal of the penalty against the assessee. 5. The Tribunal dismissed the revenue's appeal, upholding that the penalty order dated 19.05.2011 was barred by limitation under section 158BFA(3)(c) of the Income Tax Act. The decision was based on the clear interpretation of the law and the absence of any contradictory judicial precedents. In conclusion, the Tribunal's judgment focused on the strict adherence to the statutory provisions regarding the imposition of penalties under the Income Tax Act, emphasizing the importance of timelines and limitations in penalty proceedings.
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